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Decentralized Autonomous Organization

Introduction​

What is DAO​

A decentralized autonomous organization, or DAO for short, is a novel approach to managing organizations or institutions that enables individuals to collaborate for a specific cause in transparent, fair, and honest ways. DAOs can be likened to online communities of like-minded individuals, collectively owned and managed by their members in equitable ways.

Decisions are made through proposals and votes, ensuring that every member within a decentralized autonomous organization has a voice. This is significant because it prevents any central entity from manipulating matters for personal gain or based on personal beliefs.

DAOs provide secure alternatives for pooling funds for a particular cause. It's not limited to ordinary financial management by members. For example, a group could establish a DAO to oversee a charity, accepting donations and distributing aid in an accountable manner. However, the most prominent use cases for DAOs at the moment involve decentralized investment funds. In such scenarios, a group of investors establishes a venture fund that combines capital and transparently votes on its allocation.

DAO application example​

Anyone can easily create their own DAO application and run it on the Vara Network. To facilitate this, use an example of the DAO program (smart contract), which is available on GitHub.

This article explains the programming interface, data structure, basic functions, and their purposes. You can use it as-is or modify it to suit your own scenarios.

Logic​

The program has the following structs:

dao-light/src/lib.rs
struct Dao {
    approved_token_program_id: ActorId,
    period_duration: u64,
    voting_period_length: u64,
    grace_period_length: u64,
    total_shares: u128,
    members: HashMap<ActorId, Member>,
    proposal_id: u128,
    locked_funds: u128,
    proposals: HashMap<u128, Proposal>,
}

where:

approved_token_program_id - the reference to the token contract (VFT) that users use as pledge to get the share in the DAO.

period_duration - the smallest unit time interval for the DAO, in ms.

voting_period_length - voting time interval. Number of intervals for voting time = period duration * voting_period_length.

grace_period_length - after the voting period the DAO members are given a period of time in which they can leave the DAO(ragequit) without being diluted and ultimately affected by the proposal’s acceptance into the DAO.

total_shares - total shares across all members. Initially it is zero.

members - members of the DAO.

proposal_id - the index of the last proposal.

locked_funds - tokens that are locked when a funding proposal is submitted.

proposals - all proposals (the proposal queue).

Parameters approved_token_program_id, voting_period_length, period_duration, grace_period_length are set when initializing a program. The program is initialized with the following struct:

dao-light/io/src/lib.rs
pub struct InitDao {
    pub approved_token_program_id: ActorId,
    pub voting_period_length: u64,
    pub period_duration: u64,
    pub grace_period_length: u64,
}

The proposal struct:

dao-light/io/src/lib.rs
 pub struct Proposal {
    pub proposer: ActorId,
    pub applicant: ActorId,
    pub yes_votes: u128,
    pub no_votes: u128,
    pub quorum: u128,
    pub amount: u128,
    pub processed: bool,
    pub did_pass: bool,
    pub details: String,
    pub starting_period: u64,
    pub ended_at: u64,
    pub votes_by_member: Vec<(ActorId, Vote)>,
}
  • proposer - the member who submitted the proposal
  • applicant - the applicant who wishes to become a member
  • yes_votes - the total number of YES votes for that proposal
  • no_votes - the total number of NO votes for that proposal
  • quorum - a certain threshold of YES votes in order for the proposal to pass
  • amount - number of fungible tokens for donation
  • processed - true if the proposal has already been processed
  • did_pass - true if the proposal has passed
  • details - proposal details
  • starting_period - the start of the voting period
  • ended_at - the end of the voting period
  • votes_by_member - the votes on that proposal by each member

The member struct:

dao-light/io/src/lib.rs
pub struct Member {
    pub shares: u128,
    pub highest_index_yes_vote: Option<u128>,
}
  • shares - the shares of that member
  • highest_index_yes_vote - - the index of the highest proposal on which the members voted YES (that value is checked when user is going to leave the DAO)

The actions that the program receives outside are defined in enum DaoActions. The program's replies are defined in the enum DaoEvents.

DAO functions​

  • Joining a DAO
    • To join the DAO and become a DAO member, a user needs to send the following message to the DAO program:
dao-light/io/src/lib.rs
/// Deposits tokens to DAO
/// The account gets a share in DAO that is calculated as: (amount * self.total_shares / self.balance)
///
/// On success replies with [`DaoEvent::Deposit`]
Deposit {
    /// the number of fungible tokens that user wants to deposit to DAO
    amount: u128,
},
  • The funding proposal.
    • The 'applicant' is an actor that will be funded:
dao-light/io/src/lib.rs
/// The proposal of funding.
///
/// Requirements:
///
/// * The proposal can be submitted only by the existing members;
/// * The receiver ID can't be the zero;
/// * The DAO must have enough funds to finance the proposal
///
/// On success replies with [`DaoEvent::SubmitFundingProposal`]
SubmitFundingProposal {
    /// an actor that will be funded
    applicant: ActorId,
    /// the number of fungible tokens that will be sent to the receiver
    amount: u128,
    /// a certain threshold of YES votes in order for the proposal to pass
    quorum: u128,
    /// the proposal description
    details: String,
},
  • The member or the delegate address of the member submits their vote (YES or NO) on the proposal.
dao-light/io/src/lib.rs
/// The member submits a vote (YES or NO) on the proposal.
///
/// Requirements:
/// * The proposal can be submitted only by the existing members;
/// * The member can vote on the proposal only once;
/// * Proposal must exist, the voting period must have started and not expired;
///
///  On success replies with [`DaoEvent::SubmitVote`]
SubmitVote {
    /// the proposal ID
    proposal_id: u128,
    /// the member  a member vote (YES or NO)
    vote: Vote,
},
  • Members have the option to withdraw their capital during a grace period. This feature is useful when members disagree with the outcome of a proposal, especially if the acceptance of that proposal could impact their shares. A member can initiate a 'ragequit' only if they have voted 'NO' on the proposal.
dao-light/io/src/lib.rs
/// Withdraws the capital of the member
///
/// Requirements:
/// * `msg::source()` must be DAO member;
/// * The member must have sufficient amount of shares;
/// * The latest proposal the member voted YES must be processed;
///
///  On success replies with [`DaoEvent::RageQuit`]
RageQuit {
    /// The amount of shares the member would like to withdraw
    amount: u128,
},
  • The proposal processing occurs after the proposal completes its grace period. If the proposal is accepted, the tribute tokens are deposited into the program, and new shares are minted and issued to the applicant. In the event of rejection, the tribute tokens are returned to the applicant.
dao-light/io/src/lib.rs
/// The proposal processing after the proposal completes during the grace period.
/// If the proposal is accepted, the indicated amount of tokens are sent to the receiver.
///
/// Requirements:
/// * The previous proposal must be processed;
/// * The proposal must exist and be ready for processing;
/// * The proposal must not already be processed.
///
/// On success replies with [`DaoEvent::ProcessProposal`]
ProcessProposal {
    /// the actor who was funded
    applicant: ActorId,
    /// the proposal ID
    proposal_id: u128,
    /// true if funding proposal has passed
    did_pass: bool,
},

Program metadata and state​

Metadata interface description:

dao-light/io/src/lib.rs
pub struct DaoLightMetadata;

impl Metadata for DaoLightMetadata {
    type Init = In<InitDao>;
    type Handle = InOut<DaoAction, DaoEvent>;
    type Others = ();
    type Reply = ();
    type Signal = ();
    type State = Out<DaoState>;
}

To display the full program state information, the state() function is used:

dao-light/src/lib.rs
#[no_mangle]
extern fn state() {
    let dao = unsafe { DAO.take().expect("Unexpected error in taking state") };
    msg::reply::<DaoState>(dao.into(), 0)
        .expect("Failed to encode or reply with `DaoState` from `state()`");
}

To display only necessary certain values from the state, you need to write a separate crate. In this crate, specify functions that will return the desired values from the DaoState state. For example - gear-foundation/dapps/dao/state:

dao-light/state/src/lib.rs
#[gmeta::metawasm]
pub mod metafns {
    pub type State = DaoState;

    pub fn user_status(state: State, account: ActorId) -> Role {
    //..

    pub fn all_proposals(state: State) -> Vec<Proposal> {
    //..

    pub fn is_member(state: State, account: ActorId) -> bool {
    //..

    pub fn proposal_id(state: State) -> u128 {
    //..

    pub fn proposal_info(state: State, proposal_id: u128) -> Proposal {
    //..

    pub fn member_info(state: State, account: ActorId) -> Member {
    //..

    pub fn member_power(state: State, account: ActorId) -> u128 {
    //..
}

Source code​

The source code for this DAO program example and its testing implementation are available on GitHub.

The extended version of DAO that includes admin, membership proposals and delegated voting can be found at GitHub.

For more details about testing programs written on Vara, refer to the Program Testing article.