Members

Working with Proposals

Proposals are an important part of DAO governance, and can be used to fund DAO projects or ratify DAO-level decisions like updating the stake target. Staking tokens in the pool gives you governance rights to create and vote on proposals. Use the Governance page to create proposals, browse active proposals, view the treasury, and delegate your votes.

Proposal creation

To create a proposal, there are two requirements:

1. You haven't created a proposal in the last 7 days.
2. You need at least 0.1% of the staking pool to create a proposal.

To view the percentage of staked tokens in the pool for an address, visit the DAO Tracker wallets page.

In order for your proposal to succeed, a few steps are highly recommended.

1. Promote your idea and gather feedback on the API3 forum using a sentiment check post. Generally, ideas receiving community engagement on the forum are more likely to pass once crafted as official proposals.
2. Create an official proposal post on the API3 forum. This should contain a link to the proposal description on IPFS.
3. After receiving feedback from the above steps, create a formal proposal using the DAO dashboard as described below.

Proposals may be either primary or secondary. Primary proposals require an absolute majority vote to pass, while secondary proposals require 15% and a relative majority support.

Creating a formal proposal

1. Click New Proposal on the Governance page.

2. Proposal Type
   Proposals can be either Primary or Secondary voting types. These two types have access to separate treasuries, different voting settings, and different permissions to change contract settings. For a technical breakdown of the different permissions granted to the DAO's proposal types (and corresponding Agents) see this README.

3. Title
   Enter a descriptive proposal title.The title will appear on the Governance page and is used to identify the proposal.

4. Description

   While a description can be typed text, it’s highly recommended to instead use a PDF hosted on IPFS and adding a link back to the forum where you posted your proposal for discussion.

   Why use IPFS? Consider this use case: You posted on the API3 forum about a potential proposal. You received positive feedback and decided to formally create a proposal using the DAO dashboard. In the proposal's description field you provide a link back to the forum so people can again see the proposal details. How does the voter know that it's the exact same proposal they had read earlier in the forum? IPFS addressing content by its hash is convenient here, because any change you'll make to your proposal will change its hash.

   To create an IPFS link, upload a PDF version of your proposal to an IPFS provider like Pinata or Fleek. After the file is uploaded, the respective provider will create a URL with the IPFS hash for the PDF. Add the URL to your forum posting and the description field of your DAO dashboard proposal.

   Remember that the URL the voter sees in the DAO dashboard proposal description field is final and should match the URL on the forum.

5. Target Contract Address This is the address of the contract to call. For example, the commonly used target contract for USDC is 0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48.

6. Target Contract Signature This defines the signature of the function to call within the target contract. For the target contract USDC address mentioned above use the exact signature below, without spaces (leading or otherwise):

transfer(address,uint256);

Please note

Do not alter the signature in any way or else your proposal will be invalid.

7. ETH Value
   You can use zero if the target function is not payable.

8. Parameters

   These are the arguments that will be used to satisfy the signature of the target contract function in step 6.

   For example, if you use the USDC contract address 0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48, you will be calling its transfer function, as indicated in step 6, should the proposal pass.

   If you wanted to transfer 499,999 USDC to a specific wallet (in this example 0xF…EE9), the respective Agent (primary or secondary) would be calling the USDC contract to transfer the USDC to the desired wallet. The arguments would look like this:

["0xF4EB52Cf9D31a...d1663d78ddDEE9","499999000000"]

• The arguments must be provided in JSON array format where the values are stringified.

• USDC uses 6 decimal places of precision as opposed to 18 that many other ERC20 tokens use. Consequently, multiply the desired $USD by 10^6 to get the USDC amount to enter.

  Note that since transfer(address,uint256) function transfers funds from the sender to the specified address, the USDC is asked to be supplied from the Agent's balance.

  ENS Names: You are also encouraged to use the ENS app to register a name and associate it with an Ethereum account. Then, while entering your proposal parameters, you can use this ENS name instead of the account address. Before making the transaction that will create the proposal, the DAO dashboard will look up the address that the ENS name is pointing to and use the raw address in the proposal. Therefore, changing the address that the ENS name is pointing to after this look up operation WILL NOT have an effect on the proposal.

  For voters to see your ENS name instead of the raw address on the proposal details page, you will have to use the ENS app to set a reverse record pointing to your ENS name (i.e., you need to have your raw address point to the ENS name). If your proposal will make a transfer(address,uint256) call to an ERC20 token contract where the address is the address of a multisig wallet, you can set a reverse record with the multisig to your ENS name. See Parameters in this proposal for an example.

9. Click Create
   The proposal is then added to the proposal list and can be voted on.
10. Return to the API3 forum
    Add a comment to your post with a link to your newly created proposal. This will help encourage community members to vote.

Proposal execution

A proposal is ready for execution if all of the following requirements have been met:

1. The proposal hasn't already been executed
2. The proposal's voting period has ended
3. The total "For" votes exceeds the "Against" votes
4. Depending on the proposal type you selected, the respective amount of voting power voted “For” the proposal.

Both primary and secondary type proposals execute immediately once 50% of all voting power has voted "For" them.