SEP CONSTITUTION

Title: SafeDAO Constitution Authors: Lukas Schor (with early support from Longhash Team) Created: 2023-01-10 Abstract This proposal introduces a constitution for SafeDAO, defining its stakeholders as well as its mission, goals and principles. It is proposed that changes to this constitution require a stricter governance process than regular SEPs, that is double the quorum and a ⅔ majority vote. Proposal details Purpose and Background Decentralized autonomous organizations contain a particular promise: the ability to solve old coordination problems through ‘smart contracts’ that encode constitutional rights. Although smart contracts are promising new tools for governance, they alone cannot govern communities; traditional constitutions and declarations of rights are still crucial for good governance. (Metagov 29) DAOs set out to improve coordination through technical means, but soon realized that a governance smart contract is not sufficient. Without a north-star to rally the community behind, a DAO can suffer from fundamental disagreements on its general direction and lack of guidance on how to evaluate proposals. Introducing a constitution helps resolving these issues. By agreeing to a mission, goals and principles, the DAO has more certainty on its nature and ambitions. By defining a higher threshold for changes to the constitution compared to regular proposals, the DAO avoids fundamental changes through proposals that have not received sufficient support by the community. Through the mission, goals and principles defined in this proposal, SafeDAO will be more aligned and operate more efficiently when introducing future proposals. Specifically, I suggest the following text as SafeDAO’s initial constitution: SAFEDAO CONSTITUTION I. SAFEDAO SafeDAO is a decentralized collective, stewarding a thriving ecosystem around the smart contract wallet standard for Ethereum and other blockchains (“Safe Ecosystem”). SafeDAO is governed using the Safe Token (“SAFE”). II. MISSION SafeDAO’s mission is to establish smart contract wallets as the default means for interacting with web3, also known as account abstraction. Current self-custodial wallets lack the security and convenience to be a viable alternative to custodial solutions for most people. In contrast to regular wallets (EOAs), smart contract wallets provide characteristics such as recovery mechanisms, granular access control, upgradability, batching transactions as well as hybrid-custody setups. By building web3 around smart contract wallets, we reduce the reliance of users on custodial solutions, reducing counterparty risks, walled gardens and potential for censorship. As SafeDAO, we aspire to work towards this mission by establishing standards for composable smart contract wallets (the “Safe Protocol”). Through open source components and ecosystem initiatives we are nurturing the Safe Ecosystem, consisting of wallets, infrastructure, tooling and services. The Safe Ecosystem is building on a shared implementation of the Safe Protocol and is catering to the needs of various user-groups and use-cases in web3. SafeDAO promotes the common welfare, sustainable development, robustness and diversity of the Safe Ecosystem. III. GOALS SafeDAO shall use the following goals to work towards its mission: Foster a vibrant ecosystem SafeDAO benefits from a vibrant ecosystem built on shared components and standards. SafeDAO supports and empowers new and existing projects integrating with the Safe Protocol or initiatives supporting the usage of Safe Protocol. Resilience through decentralization The Safe Ecosystem shall be independent from any single entity. The Safe Ecosystem components, including governance, should be decentralized and permissionless. Tokenize value SAFE should represent the value of the Safe Ecosystem. Mechanisms should be created to link the growth of the Safe Ecosystem to the growth in utility of SAFE. IV. PRINCIPLES All proposals passing the SafeDAO governance process shall adhere to the following principles: Safe Protocol is a public good The Safe Protocol is core infrastructure for web3. Any changes that may be introduced do not compromise its public good nature and carefully balance the interests of different stakeholders in the Safe Ecosystem. This incentivises the unity of the Safe Ecosystem and, as a result, maintains the property of Safe as a portable account. Token utility is aligned with ecosystem interests Any utility of SAFE directly or indirectly adds value to the Safe Ecosystem. Changes to token mechanisms need to consider the effects on different stakeholder including user, builder and token holder. Use of treasury is limited to achieving SafeDAO goals The usage of any assets associated with the SafeDAO treasury is credibly linked to one or more of the SafeDAO goals outlined in the SafeDAO Constitution. V. CHANGES AND AMENDMENTS Changes or amendments to the constitution require a two-thirds majority and double the usual Safe Ecosystem Proposal (“SEP”) quorum at any given time. Effects and Impact Analysis The intended main effect of this proposal is to give SafeDAO stakeholders an explicit way to coordinate around a shared mission and high-level means to get there. On a more practical level, this constitution document should have the effect of informing every stakeholder’s thinking, writing and decision-making in a way that is more likely to be in line with the general direction of SafeDAO, i.e. arguing and voting for proposals that adhere to the constitution and against if not. Assuming that the constitution in its current and future form will always be optimized for the success of the Safe Ecosystem, adhering to the constitution should have a direct impact on the success of the Safe Ecosystem. An argument against this constitution and its higher governance threshold compared to a regular Safe Ecosystem Proposal (SEP) is the fact that SafeDAO will be more constrained in changes relating to its constitution. However, as mentioned before, this should be seen as a feature rather than a bug as it provides security and steadiness around a few fundamental elements of SafeDAO that are vital to its long-term success and should be protected by a governance threshold with higher difficulty than regular SEPs. In terms of risks, this constitution could define a direction or high-level means that turn out to be less ideal or even counter-productive. This risk is mitigated by allowing changes to this constitution, as described in article V. Another risk lies in this constitution being ignored, not taken seriously enough or maliciously stretching an interpretation of its contents to a point that is against the intent of the constitution. Parts of this risk can be mitigated through a dispute resolution mechanism to keep SafeDAO and its SEPs in check and provide a web3-native process to refuse SEPs that are against this constitution. Other parts can be mitigated through soft-enforcement such as requiring SEP authors to document who a proposal is related to the constitution and where there might be conflicts. Such enforcement mechanisms could be introduced through a future change in the governance mechanism of SafeDAO. Alternative Solutions No constitution: SafeDAO could choose not to introduce a constitution and proceed with regular SEPs only. In this case, the DAO would not have as much alignment on a general purpose and direction as it would have with a constitution, resulting in more information asymmetry and less coherently coordinated SEPs. Without a constitution, the DAO would also be at risk of being radically redirected through a regular proposal, whereas this constitution defines fundamental properties that can be changed, but not as easily as through a regular SEP. A constitution-like document under another title: While many DAOs introduce constitutions, some adopt similar but distinct forms, such as community covenants, code of conducts, manifests or lores. Some of these options were disregarded due to their specificity, such as a code of conduct, whereas a constitution provides SafeDAO with a generalistic foundation. The title ‘constitution’ was prefered because it is universally understood globally as a foundational document. A constitution with a different mission, goals and principles: While details in this constitution may well need to be changed at a later time, the overall approach to build an ecosystem around a use-case agnostic protocol remains key. SafeDAO as a product DAO: The SafeDAO Constitution could be focused on Safe being a vertically integrated product, consisting of smart contracts, infrastructure and user interfaces, all being provided and maintained by the SafeDAO. Doing so without fostering an ecosystem is a short-sighted effort, as existing Web3 projects have showcased that building a thriving ecosystem around a protocol can be much more impactful than just focusing on creating a product or suite of products. Safe as DAO tooling: One of the most visible use-cases for Safe is its use within the operations of other DAOs. Either as a Multisig solution for teams / working groups or as a DAO avatar via tools like Zodiac Reality. The SafeDAO Constitution could focus on this user-group and double-down on Safe as a DAO tool within the mission and goals. However, there are already a wide range of other user groups and use-cases currently driving value to the Safe Protocol. This includes institutional users, retail users, or progragramitc use-cases of Safe within a DevOps function, for example. The chosen framing of the SafeDAO Constitution recognises the use-case agnostic nature of the Safe Protocol and anticipates many more use-cases to emerge in the future, therefore not artificially limiting the scope of the mission. Technical Implementation This proposal requires a new Snapshot Subspace 32 to the main Snapshot space safe.eth for SEPs. The new Subspace settings reflect double the quorum and a ⅔ majority to pass a vote. Furthermore, the SafeDAO Constitution should be highlighted prominently across SafeDAO’s documentation, communications channels and onboarding processes to ensure that every current and future SafeDAO stakeholder is sufficiently aware.