Proposal

A proposal is a formal suggestion submitted to a DAO or decentralized governance system for community review and voting. It outlines a specific action — such as updating protocol parameters, allocating funds, onboarding contributors, or launching new features — and serves as the foundation of decentralized decision-making in Web3.

Proposals are core components of platforms like Snapshot, Tally, Aave, and MakerDAO, where token holders use their voting power to collectively determine outcomes.

How Proposals Work

• Drafting – A community member or contributor creates a detailed proposal describing the suggested change and its rationale.
• Discussion Phase – The proposal is shared on governance forums or Discord for feedback and refinement.
• Formal Submission – Once finalized, the proposal is submitted to the governance platform (on- or off-chain).
• Voting Period – Token holders vote using their governance tokens or delegated voting power.
• Execution – If passed, the proposal is implemented manually or automatically via smart contracts.

Key Features

• Transparent Governance Tool – All proposals are visible, auditable, and archived publicly.
• Token-Gated Participation – Only users holding or delegated voting tokens can vote.
• Structured Format – Proposals typically follow templates (e.g. motivation, specification, risks, implementation plan).
• Thresholds & Quorums – Proposals must meet minimum participation and support requirements to pass.
• Multi-Phase Governance – Some DAOs require proposals to go through stages (e.g. temperature check → formal vote).

Benefits of Proposals

• Community Engagement – Encourages open participation and transparency in protocol decisions.
• Collective Intelligence – Leverages ideas and insights from diverse stakeholders.
• Decentralization – Empowers users to shape the future of a project without central authority.
• Protocol Evolution – Enables upgrades, improvements, and experimentation through collective input.
• Accountability – Proposers must clearly explain and justify their suggestions.

Use Cases of Proposals

1. Protocol Upgrades – DAOs like Uniswap use proposals to implement smart contract upgrades.
2. Treasury Allocations – Communities vote on proposals to fund grants, contributors, or new initiatives.
3. Parameter Adjustments – MakerDAO proposes changes to collateral types, stability fees, and debt ceilings.
4. Community Initiatives – NFT and social DAOs propose events, marketing strategies, or tooling improvements.
5. Delegation Changes – Governance participants propose changes to how voting power is delegated or distributed.
6. Partnership Approvals – Proposals seek community approval for integrations or ecosystem collaborations.