P-36: Implementing oSnap for Optimistic Governance

Authors: Bobbay, Manny & Alex @ UMA

Summary

The adoption of oSnap for Developer DAO would eliminate the need for multisig execution by automatically executing successful Snapshot votes onchain, thus consolidating the governance process to one gasless vote on Snapshot that results in onchain execution.

Motivation

We believe decentralized governance is critical to the entire web3 ecosystem. The traction of oSnap has shown us that DAOs are increasingly committing to this as well; as such, UMA continues developing oSnap with no fees for the betterment of the industry at large.

Adding oSnap streamlines the execution of governance decisions, brings a new layer of efficiency and reliability to Developer DAO. This requires minimal effort and no disruption to existing DAO governance processes. UMA even covers the onchain execution costs for every oSnap proposal.

oSnap secures over $300M for treasuries including CoW Protocol, Across, Connext and Shapeshift. A dashboard of all oSnap users can be viewed here. oSnap was built by UMA, an experienced leader in optimistic verification. UMA’s optimistic oracle currently secures $700M of TVS across bridges, prediction markets and governance tools.

Scope of Work

oSnap Safe app lets you add oSnap to your Snapshot space and Safe in a few minutes with no developer time required. A video demonstration of the oSnap Safe App can be viewed here.

Once enabled, Snapshot proposals can optionally enable oSnap and include transaction payloads within the proposal to be automatically executed after a successful snapshot vote. Learn how to upload a proposal with oSnap here.

The updated Snapshot flow for proposals that include transaction payloads would be:

• An oSnap-enabled Snapshot proposal incorporates transaction data, to be verified and executed upon passing, with a user-friendly builder for creating and verifying token transfers.
• CODE holders vote on the proposal like any other Safe Snapshot proposal
• If CODE holders approve the proposal by vote, any address can post a bond (2 WETH) for a challenge period (1 to 3 days) and propose to execute the transactions onchain. UMA has imple
• mented a bot that validates proposals (vote passed, meets min voting period/quorum) and posts the bond for DAOs along with covering gas costs for execution (there are no fees to use oSnap).
• If no dispute arises about the proposal’s accuracy during the challenge period, the transactions can then be executed. This is also executed by UMA’s bots
• In case of a dispute, the proposal is not executed.

Here are examples of where oSnap would have streamlined the process:

• P-32: Academy Sub-DAO Budget - 2023 Q3-Q4
• P-31: Agency Q3 + Q4 Budgets
• Labs Budget - 2023-Q3

Dispute process

• Anyone can dispute by navigating to https://oracle.uma.xyz/ and finding the relevant proposal to initiate a dispute by posting a bond.
• UMA token holders vote to resolve the dispute, with the correct party rewarded from the opposing party’s bond. This bonding and dispute mechanism punishes incorrect proposers and disputers and incentivizes honest disputes.
• Any proposal that was incorrectly disputed can be re-proposed to the oracle for execution without requiring revoting. It is important to note, the dispute resolution decided by UMA token holder votes are not deciding if the transactions can be executed or not, only the bond allocation between the proposer and disputer..

Monitoring

UMA has also focused significant resources on monitoring efforts:

• The same bot that proposes and executes transactions also automatically disputes inaccurate proposals if the following criteria are not met:
  • The proposed onchain transactions match the transactions that were approved in the Snapshot proposal
  • The Snapshot proposal passed with the minimum parameters specified (majority in favor, meets minimum voting period and quorum)
  • The proposal follows the strategy specified in the Snapshot space.
• Proposals are included in the UMA Oracle UI (https://oracle.uma.xyz/) which is the same interface used by disputers verifying and disputing for other third-party integrations (Polymarket, Sherlock, Cozy, and other oSnap integrations).
• UMA sponsors a verification program, that pays UMA community members to verify all optimistic oracle assertions so when any transactions are proposed through oSnap, a Discord ticket is automatically created and an experienced verifier from the UMA community completes a multi-step verification process that focuses on areas such as the transaction payload matching the intent of the proposal, verifies transactions do not include interactions with malicious contracts, etc.

SafeGuards

DAOs can take it a step further by adding the Roles modifier via the Zodiac module to specify which addresses can call the relevant functions in the Delay modifier to veto transactions. This way, a trusted individual can be given permission to veto transactions without having full admin control over the Safe.

DAOs can take it a step further by adding the Roles modifier via the Zodiac module to specify which addresses can call the relevant functions in the Delay modifier to veto transactions. In this oSnap deployment, the Developer DAO Multisig will have permission to veto transactions.

There is still an important trust consideration: If the holder of the veto power is malicious or makes a mistake, they can disrupt the execution of a proposal without having to post a disputer bond.

Drawbacks

While oSnap has been audited by Open Zeppelin, as with any system, there may be unforeseen vulnerabilities.

Here are the audit reports by Open Zeppelin:

• OptimisticGovernor Audit
• OptimisticGovernor Audit for Contract Updates There is still an important trust consideration: If the holder of the veto power is malicious or makes a mistake, they can disrupt the execution of a proposal without having to post a disputer bond.

Vote

DAO Voting strategy is currently 1 CODE token 1 vote.

For Abstain Against