Governance proposals: what they are and how they work
A governance proposal is a formal plan token holders vote on to change a protocol. It must pass quorum, survive a timelock, and execute to take effect.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- Proposals often start as forum discussions, then become drafts.
- Voting power usually follows token holdings or delegated tokens.
- Quorum is the minimum participation a vote needs to count.
You usually see the term inside a DAO or a decentralized protocol. A proposal is the unit of decision-making: someone writes it, others review it, and holders vote.
What Can a Proposal Change?
A proposal can change almost any rule the protocol controls. Common targets are protocol rules, code upgrades, token supply, and treasury grants.
- Rules: fees, limits, or network operation.
- Token supply: minting, burning, or issuing new tokens.
- Code upgrades: adding features or fixing bugs.
- Treasury grants: sending funds to contributors or projects.
How Does the Voting Process Work?
The process often starts with discussion, then a draft proposal. Next comes a vote, either off-chain on a snapshot or on-chain. Voting power is usually token-weighted, or holders delegate to someone who votes for them.
What Are the Main Risks?
Turnout is often low, so a small group can decide. Large holders, called whales, can control many votes, and vote buying can distort results. Some proposals pass but never execute.
How Is It Different From a Poll?
A poll measures opinion, but a governance proposal is a formal decision. A poll does not change the protocol. Only a proposal that passes and executes can change rules, code, supply, or treasury funds.
Frequently asked questions
Quorum is the minimum voting power that must take part for a vote to count; below it, the proposal fails.
Rules vary; many DAOs let any holder submit one with a minimum token balance, while others require a delegate or team member.
On-chain votes are public, and off-chain snapshot votes are usually public too, though some tools offer private voting.
A canceled proposal does not execute, and the protocol stays as it was; the same idea can be submitted again.
