Governance thresholds for minimum participation, approval threshold, and vote duration are levers that need to be adjusted for your DAO’s specific needs. There is no “one size fits all” approach. This guide outlines the concepts and main considerations as a starting point for you to experiment and iterate from.
In this guide, we'll explain some considerations when setting DAO governance thresholds and explain set them in the Aragon App!
Minimum participation, sometimes called quorum, is the minimum level of participation required for a vote to be valid. For example, in the case of wallet-based voting, imagine the quorum required 5% of the total voting power to participate. Say there’s a vote where 100% of people who participated voted “yes,” but only 2% of all wallets in the DAO voted. In this case, the vote would not be valid. The higher the quorum, the harder it is for votes to pass. In the case of token-weighted voting, quorum percentage refers to the percentage of the total supply of tokens that need to participate.
Note that this threshold has different implications if you have token-based (1 token = 1 vote) or wallet-based (1 wallet = 1 vote) voting. In token-based voting, you could have 10% of tokens voting, but this might be less than 10% of of the people (or wallets) in the community.
When setting quorum, you may want to consider:
Support threshold, sometimes called pass rate, is the percentage of votes cast that need to be in favor for the proposal to be accepted.
The most typical support threshold is 50%, meaning a simple majority is needed when there is a yes/no vote. Or, if you want more community buy-in for votes to pass, a 2/3rd pass rate is a good level.
The voting period is how long the vote is active.
While there is no magic number for how long your vote should last, the most common period is 7 days. Anything between 3-14 days is typical.
The primary considerations for setting your voting period are:
Here are a few examples of active DAOs’ thresholds:
One of the best ways to start is to experiment with what works for your context. You can do this with low stakes decisions, starting with low thresholds, and moving them up if necessary. For example, Lido was founded in early 2021, and didn’t implement their 12-24 hour time lock voting period until over 16 months after their formation. Safe experimentation, even later in the DAO’s life, is essential.
While experimentation and iteration can be your best guide, you can also apply lessons from general cases:
When you create your DAO in the Aragon App, one of the important settings you'll choose are the governance thresholds.
The Aragon App automatically sets governance thresholds at a standard level. Or, you can set ones that fit your organization best. Support threshold and minimum participation have sliding scales that help you visualize the amount of tokens that will need to vote in favor of the proposal and participate in the vote.
You will also choose minimum duration, which is the minimum amount of time a vote can be live. When you create a proposal, you will set the vote period, which must be higher than the minimum duration you set in this step.
Early execution and vote change are two additional settings in the Aragon App. Early execution means that if the requirements of the proposal are met before the vote duration time, the proposal completes early. If you do not enable early execution, you can enable vote change, which allows voters to change their vote during the vote period.
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