Understanding Proposals

Learn what proposals are and how to make one of your own.

Proposals are the key to how DAOs function.

Whether it’s sending money or using funds, proposals are the conduit to every transaction.

Why proposals?

A DAO is a community led entity — there is no central authority or hierarchy of power to determine who makes decisions. In traditional corporations, the hierarchy of authority prevents lower level employees from using their voice, pitching ideas, and articulating their concerns. But in the spirit of true democracy, every member of a DAO is involved in decision making.

How do they work?

Any community members can create proposals about future operations, actions, and events within the DAO. The remaining members come together to vote on each proposals.

The DAOs smart contract will include a predefined level of consensus necessary for a proposal to pass. For example, a common percentage of necessary approval votes is 50% or more. This way, the decision is made by the majority.

Once a proposal has passed, all outcomes as executed as specified.

Proposal process

1. Submit Proposal

Anyone can submit a proposal to the DAO (even non-members)

2. Sponsor Proposal

After submitting a proposal, it must be sponsored by a current member in order to move to voting. If a member champions the proposal, it will move to the Queue.

3. Queue

The queue ensures that proposals are funneled into voting in an efficient fashion. A proposal will move from the Queue to the voting period within a predetermined time period specified by members.

4. Voting Period

Members will now vote on the proposal. Each proposal has a specified time period where it must receive enough “yes” votes to pass. While non-members can make a proposal, they cannot vote on it. In order to gain voting rights, members must purchase the DAOs native token.

5. Grace Period

The proposal passes or failed depending on the “yes” vs. “no” votes it collects.

6. Completion

If a proposal passes, the changes are executed. As a member, you can review proposals that impact you by visiting your member profile.

If a proposal does not pass, it dies and no changes are made. Members can discuss why they voted “no” and determine how a new proposal might be made with this constructive criticism in mind.