Deciphr Academy
Track 6 · Module 25 · Lesson 2 of 7 · 8 min read

How does token voting work in a DAO?

Short answer

In most token-based DAOs, voting power follows token balances, so more tokens means more votes.1,2 A proposal usually needs enough voting power to take part (the quorum) and enough votes in favour (the threshold), and votes are counted either on-chain by a contract or off-chain on a tool such as Snapshot.3,4

Test 1: the quorumTest 2: the thresholdAbstainForquorumFor + Abstain must reach the lineForAgainstFor must be more than Against
Fig. 2. Two separate tests. The quorum asks whether enough voting power took part. The threshold asks whether enough of it said yes.

One token, one vote

In a token-based DAO, holding the token gives you a vote.1 Compound's documentation says a holder's voting weight equals their balance of COMP, its governance token.2 Snapshot, an off-chain voting tool, counts each wallet's balance of a chosen ERC-20 token by default.5

So voting power is weighted by tokens, not by people. A wallet with 2% of the voting tokens has 2% of the votes.2

What a proposal is

OpenZeppelin defines an on-chain proposal as "a sequence of actions that the Governor contract will perform if it passes". Each action names a target contract, the function call to make and any ETH to send. The proposal also has a description that people can read.6

Its example is a grant: one action that transfers tokens from the DAO's treasury to a team.6

Test 1: the quorum

A quorum is the least amount of voting power that must take part for a vote to count.7,8 OpenZeppelin's quorum module sets it as a percentage of the token's total supply. Its guide, read in October 2026, says "most Governors nowadays use 4%".3,7

DAOs count the quorum in different ways.3,9,2,10,11

Rules What counts toward the quorum
OpenZeppelin's simple counting module For and Abstain votes, not Against votes3
Snapshot's basic voting Abstain votes are counted when checking the quorum9
Compound's older Governor Bravo (v2 documentation; replaced in 2025) At least 400,000 votes cast for the proposal2,12
Uniswap (process updated April 2026) At least 40 million UNI voting in favour10
Arbitrum's constitution Votes "in favor" or "abstain", measured against delegated tokens11

An Abstain vote lets a holder help a proposal reach the quorum without supporting or opposing it.3,9

Test 2: the threshold

The threshold is the share of votes in favour that a proposal needs to pass.7,11

  • Simple majority. In OpenZeppelin's simple counting module, For votes must be "strictly over" Against votes. A tie fails.7 Arbitrum's constitution also needs more votes "in favor" than "against".11
  • Supermajority. Some rules ask for more. Beanstalk's emergency route, covered in lesson 5, needed at least two-thirds of the voting power.13

To block a proposal, opponents work backwards from the threshold. Under a simple majority, a tie fails, so Against votes need to reach at least half of the For and Against votes. If For must be at least two-thirds of the For and Against votes, Against needs more than one-third. Beanstalk's emergency rule, by Immunefi's account, needed two-thirds of all voting power, not of the votes cast.7,13

A proposal must pass both tests. Plenty of For votes don't help if the quorum isn't reached, and a big turnout doesn't help if the threshold isn't met.3

Worked example

Suppose a made-up DAO uses OpenZeppelin's simple counting and a quorum of 40,000,000 tokens. Votes: 30,000,000 For, 20,000,000 Against, 5,000,000 Abstain. For plus Abstain is 35,000,000, below 40,000,000, so the quorum fails, even though 55,000,000 tokens voted and For beat Against. Against votes don't count toward this quorum.3,7

On-chain or off-chain?

On-chain voting happens inside smart contracts. Each vote is a blockchain transaction, and a proposal that passes can be carried out by the contract itself.6 Voting this way costs gas: Uniswap's guide warns that you need ETH to pay for the transactions.14

Off-chain voting happens outside the chain. Snapshot describes itself as a platform where DAOs "vote easily and without gas fees".4 Voters sign messages with their wallets instead of sending transactions, and Snapshot stores the vote receipts on IPFS, a file-sharing network.15

An off-chain vote does not move money by itself. Ethereum.org says that where a DAO's funds sit in a multisig wallet, the signers carry out the vote's result.1 Snapshot also offers a plug-in, SafeSnap, that lets anyone carry out a passed vote's transactions on a Safe treasury after a 24-hour cooldown, checked through an outside oracle.16

Many DAOs use both. Uniswap's process, last updated in April 2026, runs a 5-day "Temperature Check" on Snapshot first. A proposal needs at least 10 million UNI voting for it to move on to a binding on-chain vote.10

Our viewAlways ask two questions about a vote: did enough voting power take part, and did enough of it say yes? Then check which votes count toward each test, because DAOs don't all count the same way.
Sources
  1. Decentralized autonomous organizations (DAOs). ethereum.org (page last updated 26 June 2026; read 24 October 2026).
  2. Compound v2 Docs: Governance. Compound documentation (v2, read 24 October 2026).
  3. How to set up on-chain governance. OpenZeppelin Contracts 5.x documentation (read 24 October 2026).
  4. Getting started: what is Snapshot?. Snapshot documentation (read 24 October 2026).
  5. Voting strategies. Snapshot documentation (read 24 October 2026).
  6. How to set up on-chain governance: proposals, voting power and execution. OpenZeppelin Contracts 5.x documentation (read 24 October 2026).
  7. Governance API reference. OpenZeppelin Contracts 5.x documentation (read 24 October 2026).
  8. [Constitutional] AIP: Constitutional Quorum Threshold Reduction. Arbitrum DAO governance forum, post by the forum account "Arbitrum", 2 May 2025.
  9. Voting types. Snapshot documentation (read 24 October 2026).
  10. Governance Process. Uniswap developer documentation (page says it was last updated in April 2026; read 24 October 2026).
  11. The Amended Constitution of the ArbitrumDAO. Arbitrum DAO governance documentation (read 24 October 2026).
  12. Compound Governor Contracts Upgrade (Compound proposal 393). Tally (now Cactus), Compound governance proposal page (read 24 October 2026).
  13. Hack Analysis: Beanstalk Governance Attack, April 2022. Immunefi, a security firm (article by one of its smart contract triagers), 9 January 2023.
  14. Guide to Voting. Uniswap developer documentation (read 24 October 2026).
  15. FAQ. Snapshot documentation (read 24 October 2026).
  16. SafeSnap. Snapshot documentation (read 24 October 2026).
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General education built from the publicly available sources listed above. Not financial, legal, tax or investment advice. Naming a company, project or regulator is not an endorsement either way. Last checked 2026-10-24. Terms and disclaimer.