What is a Governance Proposal?
A governance proposal is a formal submission requesting changes to a protocol, treasury allocation, or organizational policy. Proposals go through defined processes including discussion, voting, and execution, allowing token holders to collectively shape protocol direction.
Proposal Lifecycle
1. Discussion Phase: Ideas are shared on forums (Discord, Discourse) for community feedback and refinement. 2. Temperature Check: Informal polling gauges community sentiment before formal submission. 3. Formal Submission: Proposal is submitted on-chain or to Snapshot with specific parameters and implementation details. 4. Voting Period: Token holders vote for or against. Duration varies (typically 3-7 days). 5. Timelock: Approved proposals wait in a timelock (24-48 hours) before execution. 6. Execution: Smart contracts automatically implement approved changes.Proposal Types
Parameter Changes: Adjusting protocol variables like fees, collateral factors, or emission rates. Upgrades: Smart contract updates or new feature implementations. Treasury Allocation: Grants, bounties, or operational expenses. Governance Changes: Modifying voting rules, quorum, or proposal processes.Proposal Requirements
Submitting proposals typically requires:
- Minimum token threshold (e.g., 10M UNI for Uniswap)
- Forum discussion period completion
- Proper formatting and technical specification
- Security considerations and audit plans
Proposal Analysis
Before voting, consider:
- Technical implementation quality
- Security implications
- Economic impact on stakeholders
- Team credibility and track record
- Community sentiment and discussion quality
On-chain vs Off-chain Proposals
On-chain: Voting and execution happen on blockchain. Gas costs apply but enforcement is trustless. Off-chain (Snapshot): Gasless voting via signed messages. Requires multisig or guardian to execute results.Notable Proposal Examples
- Uniswap fee switch discussions
- Compound market additions
- Aave risk parameter adjustments
- Treasury diversification initiatives