OracleMesh DAO

To decentralize the governance of both dAPIs and the project as a whole, OracleMesh will be governed by a DAO. The governance will be entirely decentralized and open, meaning that all stakeholders will be able to participate in the governance of the project directly. This will be achieved through the OM3 token, which will grant voting power in the OracleMesh DAO .

The DAO will vote on high-level parameters regarding mechanics such as staking incentives and collateralization. Additionally, the DAO will give out grants from the DAO bank and by consequence decide on the general direction of the project. More granular tasks will be conducted through hierarchical team structures for scalable governance.

The expected workflow is for people to form off-chain teams and apply for grants to execute one-time projects or continuous operations that will benefit OracleMesh. The team makes the grant application with a multisig that has the team members assigned as users, and the DAO grants the funds to the multisig if the grant proposal is accepted. Furthermore, the DAO may authorize the team multisig to make specific transactions depending on the assigned task, e.g., setting dAPI subscription fees for individual users. Note that team members may have to disclose their real identities for projects with critical responsibilities and large budgets to verify their credentials and avoid potential Sybil attacks.

Examples of technical grant subjects can be listed as follows:

• Technical development of Airnode, dAPI contracts, OracleMesh DAO contracts

• Frontend development for OracleMesh (staking, insurance, etc.)

• Development of OracleMesh ecosystem projects

• Integration of new APIs, dAPI users, smart contract platforms

• Statistical and qualitative risk assessment for specific APIs and dAPIs

• Managing dAPIs

• Developer outreach through articles, tutorials, videos

• Technical and security audits

• Setting up bug bounty programs, hackathons, etc.

There is also an abundance of non-technical tasks that will be carried out through grants:

• Business development to find new API providers, dAPI users

• Subscription and insurance pricing for specific dAPI users

• Operational and financial audits

• Payment processing

• UI/UX design

• Marketing

• Legal counsel

This team-based governance scheme is scalable in terms of gas costs, as it requires fewer proposals to be voted on at the DAO level. It is also more scalable in practical terms, as it does not require the constant attention of all governing parties to a wide variety of minute details. Furthermore, it allows critical operations such as dAPI management to be executed swiftly and based on expert opinion. As OracleMesh operations scale up, this governance hierarchy may demand additional layers, which implies subDAOs.

The DAO must follow two principles for this scheme to be effective. Firstly, to limit the amount of damage a malicious or incompetent team may cause, the authority that the team has must be constrained to a bare minimum, which is also known as the “principle of least privilege”. For example, a dAPI management team should never be able to completely recompose a dAPI that is under use, but should only be able to switch individual oracles in and out with a long enough cool-down period to ensure that their authority cannot be abused to a significant degree. Similarly, milestones and deliverables should be utilized to grant teams only the funds they need to carry out the specific responsibilities they have at the time. The second principle is transparency. For the DAO to be able to assess its performance, the team must report to the DAO in great detail. These reports will have the additional benefit of providing accountability and allow the dAPI users and the general public to be able to audit the operations of OracleMesh at all times.