- 1inch has launched its Network DAO Treasury, a key step for decentralization via its DAO.
- This represents the beginning of Stage 2 of 1inch’s governance implementation.
- The Treasury was approved with 90% support from the community.
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1inch has announced the creation of the 1inch Network DAO Treasury as well as the beginning of Stage 2 of its governance implementation. The DAO (decentralized autonomous organization) will govern the 1inch network via 1INCH token holders staking their tokens in order to vote on protocol parameters and governance.
Creating a DAO
1inch’s DAO is being implemented in two stages. Stage 2 began today.
Stage 1 began in December 2020 when 1INCH tokens were distributed to protocol users, which community members could then use on the Instant Governance UI to directly control certain protocol settings in a voting period that was not overly lengthy. In other words, Stage 1 involved building a core governance community for 1inch Network.
Stage 2, which began today, introduces “full-fledged DAO functionality by providing the community direct control over extended governance mechanisms.” Stage 2 should be in full swing by early 2022.
The 1inch Foundation decided to launch the DAO in stages in order to ensure decentralization by allowing more people to get involved in the community and become owners (and stakers) of 1INCH. Otherwise, says 1inch Network co-founder Sergej Kunz, “the DAO would be controlled by a narrow group of individuals”—i.e. primarily only those who were involved with the protocol early on.
Since 1inch’s DAO needs to be able to allocate funding to its various proposals, the 1inch Network DAO Treasury is critical for Stage 2 governance. The 1inch Network Treasury proposal has been approved with 90% in favor, and it had been partially informed by the community discussion that began on the matter back in September.
The 1inch Network DAO Treasury is slated to be “under the direct domain and ownership of the community.” One potential drawback noted is that, due to the fact that a proposal will need to be approved in order for funds to be accessed, governance participation dropping below the quorum requirement could make it difficult for the DAO to actually use the treasury funds.
It is checks and balances like these that promote decentralization but also cause friction.
1inch is a network that contains three protocols (aggregation, liquidity, and limit order) for DeFi, with over 820,000 users and over $85 billion in volume. It has several ecosystem partners, including Chainlink, The Graph, Polygon, and Near, as well as backers like Pantera, Galaxy Digital, and Binance Labs.
Disclosure: At the time of writing, the author of this feature held Link, BTC, and several other cryptocurrencies.
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