Proposal: Implement On-chain Aada DAO Governance (Implemented)

Proposal: Implement On-chain Aada DAO Governance


DAO Governance is a core part of every DeFi platform. It allows investors to participate in the decision-making process. Relying on an off-chain DAO governance may pose some fundamental security risks for Aada Finance. Therefore, the following proposal opens up the possibility of embracing the on-chain DAO governance. The community will have complete and transparent control over the proposal submission. Meanwhile, the platform will ensure a fair voting system based on users’ commitment to the governance process.

Overview of the On-chain Governance

On-chain governance is the decentralized upgrading of a blockchain or a protocol by implementing changes decided by stakeholder voting. Typically, everyone can make a proposal, which token holders can choose to approve or reject. It’s important to note that there are different strategies for conducting on-chain governance. Still, the benefits are generally the same. Ultimately, on-chain decision-making ensures transparency, quicker consensus, and higher protocol security against malicious hard forks.

How would an exemplar On-chain Aada DAO Governance work?

  • Voting will require Aada Bonds and take place on the Aada Governance Forum.
  • The Governance Forum will list proposals in the form of polls, which stakeholders will be able to vote on.
  • The process will be conducted through linked-wallet voting, which will require a Voting Contract.
  • To vote, stakeholders will have to “lock up” their Aada Bonds by transferring them into the Voting Contract.
  • All votes will be based on the equivalent of AADA that the bonds represent.
  • Each poll will last for three or seven days. The bonds will be returned to the participants after the voting period.

What would be an example of the Aada DAO Governance voting requirements?

  • Only Aada Bond owners will be able to make proposals and vote.
  • The voting will be weighted by the Aada Bonds’ equivalent in AADA. The process will focus on the number of AADA represented by the bonds.


Undoubtedly, the advantages of on-chain governance are prevalent compared to its off-chain counterpart. Here are some of the most essential rationale in support of the proposal:

Decentralized decision-making process

At its core, a true DAO should allow any entity that holds the blockchain’s underlying token to make and vote on proposals. Unlike informal systems, on-chain governance will enable users to directly influence changes.

Active engagement

Active engagement in the protocol’s development is vital for building a robust community. As the threshold for staking on the Aada dApp is already set at 25 AADA, governance participation is easily accessible. Thanks to their fair say, the on-chain concept will make stakeholders feel more enfranchised. Besides, the staking requirement will further incentivize token holders to become involved with the AADA use cases.

Transparent rules and parameters

Transparency is another crucial part of every DAO. On-chain governance finds an easy solution to the dilemma by providing transparent and consistent consensus rules. Thanks to the pre-defined and agreed-upon parameters, stakeholders will have the motivation to support the system.

Quicker consensus

One of the significant flaws of off-chain governance is the inefficient governance consensus mechanism. The biggest issue is that informal systems can propose code updates that the community can theoretically debate indefinitely. In contrast, the on-chain vehicle can implement code changes much quicker. The main advantage is the fixed interval of time where the stakeholders can cast their votes.

Binding code changes

Typically, informal systems rely on the general belief that the agreed-upon updates will be implemented. However, that’s not always the case. In this regard, on-chain governance will make all positive decisions irrefutable and bound to be deployed. That way, Aada Finance will align entirely with the ethos of decentralization.


On-chain governance has many perks over its informal counterpart. While transforming the Aada DAO into a genuinely decentralized entity, it will also promote active participation. As a result, token holders will be incentivized to become stakeholders. Ultimately, we’ll create an efficient DAO Governance system that will also promote the organic growth of the community. Also, the strategy will help Aada Finance earn more long-term supporters.

  • Agree
  • Disagree

0 voters


I’m just thinking alone here but I could see the utility of a governance bond primarily for access and for voting. How I could see it is minting a NFT which would detail how much AADA I hold bothy freely or bonded and give me a number of votes, I could then use this NFT for access to vote for or against proposals proportionally to my voting power. Or consume this NFT when submitting my votes all in 1 transaction, with the NFT being the identifier that it’s “my” vote.

We should do it to keep the AADA tokens and bonds liquid and also because you have to actively do something to participate.

In terms of making proposals again you could generate a different governance NFT say a “proposal NFT” proving the holder has more than X aada either in tokens or bonds and has the right to publish proposal. I still think the proposal NFTs should have to have X amount of either AADA tokens or bonds deposited to mint the NFT to prevent manipulation. Funds returned post vote.


Also I support on chain voting but not via the method or using the criteria you mentioned so had to vote no for this proposal.

1 Like

Another solution that will eliminate the need for sending Stake Bonds to a Voting SC would be to implement a snapshot mechanism. The idea is to snapshot all Stake Bond holders before each proposal/executive vote. That way, stakeholders will be able to have a say without worrying about their bonds’ security. Meanwhile, the DAO will allow only whitelisted addresses to cast their vote and with a certain weight.

I also want to stress that a reputation voting mechanism might be much more efficient than coin voting. While the former will motivate community members to be more active in order to receive higher voting power, the latter pose different risks regarding voting weight. For example, there might be cases of buying and selling AADA before and after a proposal to influence decisions or even vote buying.


I like where these are going. As long as my AADA does not leave my wallet but is instead done via proxy like snapshot or having NFT bond representation or some other technique, I’m all for experimenting with all forms of voting. Having to lock AADA into any voting contract implies too much risk.


Justice must not be lacking. The more investors successfully participate, the more successful the entire protocol will be.
It must be prevented that voting persons who have a large number of tokens can push through an application according to their sense and then sell their tokens.
For example, if a person owns 10,000+ Aada, a time should pass before the applicant can sell their tokens. Otherwise, we can assume that Wales will quickly take advantage and bring their voting weight to bear. This puts all other shareholders at a disadvantage who, for example, could not buy in for $0.2 but probably put in the same amount or even more fiat money.


Just found this forum, I’m in others already. Glad I was able to stop by and start the important discussions we must have as a community to lead the way in the Cardano world. WAGMI

1 Like

Can we have multiple running polls at the same time?
If yes, and as mentioned, Each poll will last for three or seven days. The bonds will be returned to the participants after the voting period. If I have only 1 AADA Bond which I transferred to the Voting Contract, can I use the same transferred bond to vote on multiple polls?


I voted no for 1 reason. I am not going to risk sending my AADA to a SC simply to vote. On top of that we aren’t even compensated for the risk of sending our AADA to a SC.

The rest of the proposal is solid tho.


The proposal is about on-chain governance, not the way it will work. You will notice the word “exemplar” (for example). If the proposal passes, there will be another proposal that will discuss and agree on a certain consensus mechanism.

Agreed I like the idea as well. Full control and a Proxy will make me sleep easier. :smiley:

1 Like

Sorry, I know i’m late to the party. But i just found out about this forum. Anyhow after reading this and trying to reconcile what was going on. Something came to mind. Have any of you used milkyswap on milkomeda yet? Because they have this voting mechanism that i found really cool. Basically, if you decide you want to participate in their voting, you use their token in a process called churning, and basically you put your Milky into this churn contract in exchange for their governance token Creamy. You can choose 1 week to 4 years, and depending on how much and how long you choose to do so, is how long you have stake in the system with the associated ratio of voting power. And the more Creamy you have gives you a boost on your farming rewards up to 2.5x plus 0.05% of protocol fees. And you can always add more or increase the time for more Creamy. I don’t know if this helps our situation since it’s a different kind of dapp, but i thought it was a good starter DAO you know? Incentive to take part. Here’s the link that explains it better than i could. Plus one of the benefits of blockchain is open source, so if nothing else maybe it might inspire one of you coders to make it work better for our kind of DAO over here? Just trying to be helpful… Churning For CREAMY - MilkySwap

Also, if you guys don’t like that idea, ADAO is also making some really great Government Tools for Cardano to help all Cardano Projects.
Here’s their site:

And also i almost forgot, from Liquid Finance which ADAO has also adapted as one of their tools is agora, which is also a universal cardano governance tool that can be adapted to any project. That’s right here: GitHub - Liqwid-Labs/agora: Governance modules for Cardano protocols

1 Like

And also i almost forgot, from Liquid Finance which ADAO has also adapted as one of their tools is agora, which is also a universal cardano governance tool that can be adapted to any project. That’s right here

1 Like