Track 6 · Organisations, law and finance · Module 25

DAOs and governance

How token holders vote, delegate and sometimes get attacked.

Lessons: 7
Reading: 53 min
Quiz: 15 questions
Pass mark: 80%

1What a DAO isWhat is a DAO, and how decentralised is it really?7 min
2Token voting: quorum and thresholdsHow does token voting work in a DAO?8 min
3Delegation and turnoutWhat is vote delegation in a DAO, and why does turnout matter?7 min
4The proposal lifecycle on-chainWhat happens to a DAO proposal from creation to execution?8 min
5Governance attacks and defencesHow can a DAO's governance be attacked, and how do DAOs defend themselves?8 min
6DAOs and the lawHow does the law treat a DAO?8 min
7The Brindlecove caseHow do you check whether a DAO proposal passed, and when it can be carried out?7 min

The case used in this module

The Brindlecove Labs case (made up)

Brindlecove Labs is a made-up company. It built a made-up protocol called Quellmoor, and BRDL is the protocol's made-up governance token. There are 1,000,000,000 BRDL. Brindlecove's finance lead, Maya Quist, is made up too, and the company keeps its cash at Pellowmark Bank, a made-up bank.

The Quellmoor DAO votes on-chain through a Governor contract modelled on OpenZeppelin's, using timestamps for its clock. Its made-up settings:

Proposal threshold: 1,000,000 BRDL of voting power to submit a proposal.
Voting delay: 2 days. Voting power is fixed when voting starts.
Voting period: 7 days.
Quorum: 4% of all BRDL, so 40,000,000 BRDL. For and Abstain votes count toward it; Against votes do not.
To pass: more For votes than Against votes. A tie fails.
Timelock: 2 days after a proposal is queued.

Brindlecove Labs holds 20,000,000 BRDL: 15,000,000 in its treasury Safe and 5,000,000 in a second wallet. Maya follows one proposal, QIP-14, which asks the DAO treasury to pay 3,000,000 BRDL for a security audit. The lessons come back to it, and some quiz questions ask about it. Every name and number here is made up, and none of it is advice.

Each module tells its own made-up Brindlecove story, so details can differ from one module to the next.

Key words

DAO (decentralised autonomous organisation): A group that makes decisions through proposals and votes, with its rules and treasury held in smart contracts.¹
Governance token: A token that gives its holder voting power in a DAO, usually in proportion to how many tokens they hold.¹²
Proposal: A set of actions, such as a payment from the treasury, that a DAO's Governor contract carries out if the vote passes.³
Proposal threshold: The voting power an account needs before it can submit a proposal.³⁴
Quorum: The least voting power that must take part for a vote to count. DAOs differ on which votes count toward it.⁵⁶⁷
Voting threshold: The share of votes in favour that a proposal needs to pass, such as a simple majority or two-thirds.⁵⁸
Delegation: Assigning your tokens' voting power to another address, or to your own, without moving the tokens.⁹⁵
Delegate: An address that votes with the voting power that token holders have assigned to it.¹¹⁰
Voting delay: The time between a proposal being submitted and voting starting. Voting power is fixed when it ends.⁷⁵
Voting period: How long a proposal stays open for votes.⁷⁵
Timelock: A contract that makes a passed proposal wait a set time before it runs, so users can react or leave.⁷²
Snapshot of voting power: A record of balances at a set point, so that tokens bought, borrowed or moved later can't vote on that proposal.¹¹⁵
Off-chain voting: Voting by signed messages outside the blockchain, with no gas fees. It doesn't move funds by itself.¹¹¹
Temperature check: An early, non-binding poll, often on Snapshot, to see whether a proposal has support.⁴¹²
Flash loan: A loan of tokens that is borrowed and paid back within a single transaction.⁸
DAO LLC: A Wyoming limited liability company whose articles say it is a decentralized autonomous organization.¹³

Sources

Decentralized autonomous organizations (DAOs). ethereum.org (page last updated 26 June 2026; read 24 October 2026).
Compound v2 Docs: Governance. Compound documentation (v2, read 24 October 2026).
How to set up on-chain governance: proposals, voting power and execution. OpenZeppelin Contracts 5.x documentation (read 24 October 2026).
Governance Process. Uniswap developer documentation (page says it was last updated in April 2026; read 24 October 2026).
Governance API reference. OpenZeppelin Contracts 5.x documentation (read 24 October 2026).
[Constitutional] AIP: Constitutional Quorum Threshold Reduction. Arbitrum DAO governance forum, post by the forum account "Arbitrum", 2 May 2025.
How to set up on-chain governance. OpenZeppelin Contracts 5.x documentation (read 24 October 2026).
Hack Analysis: Beanstalk Governance Attack, April 2022. Immunefi, a security firm (article by one of its smart contract triagers), 9 January 2023.
Guide to Voting. Uniswap developer documentation (read 24 October 2026).
How to delegate your voting power: A guide for $ARB token holders. Arbitrum DAO governance documentation, public preview (read 24 October 2026).
FAQ. Snapshot documentation (read 24 October 2026).
The Amended Constitution of the ArbitrumDAO. Arbitrum DAO governance documentation (read 24 October 2026).
Senate File SF0038, Enrolled Act No. 73: Wyoming Decentralized Autonomous Organization Supplement (W.S. 17-31-101 to 17-31-116). Wyoming Legislature, 2021 General Session, effective 1 July 2021.