Data from Snapshot show that Sushi and Gitcoin have relatively better governance for encrypted projects

Author: Richard Lee

The average number of voting addresses for most project proposals is less than 500, and only Sushi has more than 1,000.

Decentralized governance is becoming more and more popular under the wave of DeFi, NFT and new public chains, but what is the actual governance quality of each project? According to Snapshot data, the most commonly used governance voting platform for encrypted projects, ChainCatcher processed the governance data of more than 35 well-known projects from three dimensions. Among them, the governance performance of projects such as Sushiswap and Gitcoin is relatively better.

We mainly used three types of data in the Snapshot database. One is the number of members. Snapshot provides the option of “joining” a specific project for all Ethereum addresses. The number of members can reflect the attention and preference of Snapshot users to a project. The second is the number of valid proposals (in the past three months), which can reflect the importance and application of decentralized governance by the project. The third is the average number of voting addresses (the average number of addresses participating in the valid proposal voting in the past three months), which can reflect the active participation in the governance of the project community. All data were collected and processed before 21:00 on October 25th (UTC+8).

It should be noted that MakerDAO, Compound, Synthetix and other projects do not use the Snapshot platform for governance voting, but have an independent voting platform and support a delegated voting mechanism. This article only processed the number of proposals for these projects, and the number of members and the average number of voting addresses is not included.

1. The Number of members

Figure 1: The Number of Members; Source: Snapshot

From figure 1, we can see that Sushiswap (3240), Gitcoin (2840), and Uniswap (2680) occupied the top three positions. Bankless DAO has 710 fewer members than Uniswap. Except for the top three projects, the differences in the number of members of the remaining projects are roughly the same. It is worth noting that Proof Of Humanity and Aavegotchi are on the list as relatively unknown projects, ranking seventh and eighth respectively, becoming dark horses of the project.

Proof Of Humanity is a social identity verification system for humans on Ethereum. It combines webs of trust, reverses Turing tests, and dispute resolution, to establish a public participation and truly democratic voting governance system.

Aavegotchi is a gamified DeFi project that integrates functions such as pledge, collection, and bidding, and is built on the Aave ecosystem.

In terms of the number range, there are 3 projects with more than 2000 members, 11 projects with between 1000 — 2000 members, and 12 projects with between 500 — 1000 members. (See Appendix 1)

2. The Number of Valid Proposals

Figure 2: The Number of Valid Proposals; Source: Snapshot

From figure 2, we can see that in terms of the number of valid proposals, Bancor (73), Index (72), Fei (31), Aave (33), and Rari Capital (29) ranked the top 5. All their numbers of their proposals are more than 29. With the exception of Aave, the average number of voting addresses for the other four projects are below 60, which indicates that too many proposals may cause the community’s voting enthusiasm to decrease.

From the perspective of the number range, the number of proposals for most projects in the past three months is between 5–15. The number of proposals for projects with an average number of voting addresses higher than 500 is between 5–10. Among the well-known DeFi projects, the number of proposals for projects such as The Graph, dYdX, year, and 1inch is relatively small, no more than two.

For comparison, we also counted the number of proposals from Compound, MakerDAO, and Synthetix’s own governance platforms in the past three months, which were 55, 13 and 30 respectively.

For comparison, we also counted the number of proposals from Compound, MakerDAO and Synthetix’s own governance platform for the last 3 months, which are 55, 13 and 30 respectively.

3. The Average Number of Voting Addresses

Figure 3: The Average Number of Voting Addresses; Source: Snapshot

From figure 3, we can see that in terms of the average number of voting addresses, ENS (3289), Sushiswap (1014), Gitcoin (787), dYdX (670) and Aavegotchi (607) ranked the top 5, but considering that ENS has only one proposal (“please vote for your favourite project “), and it clearly stated that POAP badges are issued to voters for incentives, so its data is not representative. Then Sushiswap can be regarded as the most active project in the community.

From the perspective of the volume range, there are 7 projects with an average number of voting addresses higher than 500, and 15 projects with a number between 100–500. Among relatively well-known projects, BitDAO, PancakeSwap, Fei Protocol, Curve Finance and other projects have a relatively small number of voting addresses, all of which are below 100 addresses.

4. Conclusion

In general, projects with better governance performance, such as Sushiswap, Gitcoin, Bankless DAO, Aavegotchi, and Unsiwap, etc., all of which rank in the top 10 in at least two lists.

Sushiswap is in the top 2 in terms of the number of members and average voting addresses, reflecting to some extent the successful decentralized governance of the project’s community. Sushiswap, an early community-driven project and one that forced the developer team to abandon its plans to raise funds at a discount through extensive community discussion and pressure in July this year, is not surprisingly ahead in terms of community governance.

Bankless DAO is a DAO organization that originated from the encrypted media Bankless. It encourages community members to collaborate online and make contributions in research, translation, marketing, and operations. It is currently one of the most influential DAO organizations.

Gitcoin, as a community of crypto developers, plays an important role in the distribution of public funds and therefore has a degree of governance that is ahead of most DeFi projects. Bankless DAO, a DAO that originated in the Bankless crypto media, encourages community members to collaborate online and contribute to research, translation, marketing, operations and more. It is currently one of the most influential DAO organizations.

However, judging from the data, the average number of voting addresses of most crypto projects is currently below 500, which is far lower than the number of users holding coins and product users, and the number of proposals for some well-known projects is also significantly lower. It means that decentralized governance is still at very early stages in the crypto industry and needs to be further promoted by all walks of life.

Earlier, Vitalik Buterin, founder of Ethereum, also stated that decentralized governance based on token voting has exposed many problems. For example, some holders lack the motivation to participate in governance, and only token holders can participate in governance, but other roles are ignored, which can easily lead to bribery and malicious use.

At the same time, he argues that token voting should not be the only legitimate form of governance decentralization, and propose four solutions, as detailed in Moving beyond coin voting governance.

Appendix:

Appendix 1: Some Well-known projects governance data (in the last three months)

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