Synthetix DeFi Protocol Announces a New Governance System
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Synthetix DeFi Protocol Announces a New Governance System

Decentralized finance (DeFi) protocol, Synthetix, has announced that the project is now officially being governed by 3 decentralized autonomous organizations (DAOs). In a July 28 blog post, the team detailed the processes involved in the winding down of the Synthetix Foundation.

According to the team, over the past 6 months, it has progressively reduced the role of the Foundation, and the final remaining aspects of the transition have been resolved in the last few weeks. The team claims the reliance on a non-profit foundation to steward a project was likely a net negative and hence, replaced by a DAO model.

The announcement reads:

“As of the date of publishing this article, July 2020, the protocol is now under the control of 3 distinct DAO’s: The protocolDAO, which controls protocol upgrades and variable configuration… The grantsDAO which funds public goods in the Synthetix ecosystem…The synthetixDAO which manages and deploys funds to contributors and other project needs.” 

The protocolDAO serves as the owner of all Synthetix contracts and uses a 4/8 multisig to modify and upgrade the protocol. It is responsible for the implementation of SIPS and SCCPs approved by the community through the protocol’s rough consensus process. It is also responsible for all of the monitoring and oversight of the Mainnet contracts plus Oracles.

The grantsDAO is also responsible for public goods funding, including incentivising community participation in the SIP process through rewarding SIP champions as well as funding initiatives like snx.tools and SNX Link. It is governed by community members in order to ensure an independent force within the ecosystem. The synthetixDAO has committed to funding the grantsDAO for the next 3 years with 1 million SNX per year, to ensure continuous funding for public goods and initiatives. 

The synthetixDAO was created initially as a simple multisig contract during the tokensale to ensure the funds raised were secure and would be distributed in a manner that best aligned with the interest of the network via community consensus. With the new governance system, synthetixDAO will continue to provide funding for network growth, but where the foundation was previously a major recipient of funding. Now, a large number of smaller entities will apply directly to the synthetixDAO for contributor funding.

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Dacosta Osei-Tutu, a first degree holder in Nursing, who couples his Nursing career with blockchain blogging, has a great passion for the blockchain technology and aims to play a vital role in applying this revolutionary technology to disrupt the healthcare system in Africa.