As part of the continued effort towards building out the SPS token infrastructure, it is important that the DAO treasury be updated to operate in a more secure and decentralized manner. The DAO treasury currently consists of various cryptocurrency wallets on Hive, Ethereum, and BNB Chain. This post will detail the process by which these wallets will be changed to use a multi-sig configuration controlled by a number of stakeholder-elected "treasurers".
Multi-Sig Wallets
Typical cryptocurrency wallets require a single signature from a single private key in order to create and publish a transaction to the blockchain to do something like transfer tokens. A multi-sig wallet is a wallet that requires multiple signatures from multiple different private keys (typically held by different people) in order to transfer tokens or take any other kind of action.
Nearly every major blockchain, including Hive and all EVM chains on which the SPS DAO holds funds, support multi-sig wallets and they are an industry standard method for securing funds held by a group or organization that does not want to trust everything to a single person, or a single private key.
Moving the DAO funds to multi-sig wallets controlled by elected community members will increase the security significantly by spreading the private keys necessary to move the funds around to multiple different people, many potentially anonymous, around the world. This is also expected to help make the token appear more secure and legitimate to third-parties such as exchanges that will inspect the wallets holding large amounts of the tokens.
DAO Treasurer Candidacy Process & Responsibilities
There will initially be 11 Treasurer positions available, with 6 of the 11 required to sign any transaction to move DAO funds. These numbers (and, in fact, anything about this entire system) can be changed at any time by the community via a successful SPS DAO governance proposal.
In order to be considered for one of the 11 DAO treasurer positions, an SPS stakeholder must submit a post to the Hive blockchain detailing why they would make a good DAO treasurer (although the content can be anything that the candidate wishes), with the following required specifications:
- The post must be published from the candidate's own Hive wallet
- The candidate must hold a minimum of 100k staked SPS in their wallet
- The first tag of the post must be #spstreasurer
- The post must include the candidate's EVM public wallet address from which they can sign transactions on all EVM blockchains
Please note that anyone is eligible to be a DAO treasurer including Splinterlands or DAO employees.
The team at Peakmonsters will be putting up a page on their website in the near future that will allow SPS stakeholders to submit their candidacy for the position of DAO treasurer and allow SPS stakeholders to vote on the available candidates. This process is planned to begin as soon as that page is ready, at which point stakeholders who wish to run for this position will have 7 days to submit their candidacy posts before the voting will begin.
The 11 elected DAO treasurers will be expected to perform the following functions on behalf of all SPS stakeholders:
- Actively monitor and participate in a private (but publicly readable) Discord channel to coordinate with the other DAO treasurers, the DAO manager (@clayboyn), and the Splinterlands team
- Actively monitor the DAO governance system for any passed proposals that require the movement of DAO funds
- Be reasonably available and have the technical know-how to use hardware wallets and sign transactions on Hive and EVM blockchains (typically through an interface like Hive Keychain and Metamask)
- Be able to properly secure their cryptocurrency wallets on Hive and EVM blockchains
Please note that transactions from the DAO wallets are relatively rare (typically as little as a few per month), so after the initial setup and tests it is not expected that the DAO treasurers will need to spend much time performing these functions.
DAO Treasurer Voting Process
After the 7 day window for candidacy submission has been completed, the SPS stakeholder community will have 7 days to vote for any of the available candidates.
Voting will be done by upvoting the desired candidate's post on the Hive blockchain, and as mentioned above, the Peakmonsters team will be creating a page on their site that will easily allow everyone to see all candidates in one place and view/upvote their posts. It is important to note that, like with the SPS governance proposals, this will all be done via the Hive blockchain and does not require the use of the Peakmonsters website or any other specific front-end.
Each wallet may vote on up to 10 treasurer candidates and their vote weight will be equal to the amount of staked SPS tokens held in their account (similar to Hive witness voting). At the end of the 7 day voting period, the 11 candidates with the most stake-weighted votes will be the first set of elected DAO treasurers and will be added as signatories on the various DAO cryptocurrency wallets.
A number of test-runs will be conducted with the elected candidates to ensure that the process for signing transactions on all relevant blockchains is clear and that all of the treasurers are able to complete their required responsibilities before moving the full DAO funds into these multi-sig wallets.
In the event that any of the elected treasurers are unable to fullfil these responsibilities then the account with the next highest amount of stake-weighted votes will take their place.
Electing New Treasurers
This system is meant to be temporary until the SPS validator software system is released. At that point, the SPS validator system will have its own similar system built-in for voting on validators who will then also be responsible for managing the DAO wallets. For more information, please see the SPS token whitepaper.
In the meantime, it will be up to the SPS stakeholder community to decide if or when to hold additional DAO treasurer elections or to remove/replace a specific treasurer via the SPS governance proposal system.
Treasurer Considerations
While it is ultimately up to the SPS stakeholders to decide which candidates to vote for (and stakeholders may vote for any candidates for any reason) some guidelines that stakeholders may want to take in consideration when voting on candidates are included below:
- Trustworthiness - This is probably the most important consideration of all. The elected treasurers need to be trusted to act in accordance with the wishes of the SPS stakeholder community at all times, including to potentially remove themselves as a signatory on the wallets if the community votes to replace them.
- Communication - Treasurers will need to be reasonably available, responsive, and able to clearly and respectfully communicate with the other treasurers and other SPS stakeholders.
- Stake - Treasurers should ideally have a very significant stake not only in the SPS token, but also in the Splinterlands ecosystem as a whole to ensure that they are incentivized to act in the best interest of the SPS ecosystem at all times.
- Technical Capability - While signing transactions in a multi-sig wallet is not too complicated, and is typically done through a simple website UI, treasurers will still need to at least be able to use and secure both Hive and EVM cryptocurrency wallets, ideally using a hardware wallet device, and will need to be reasonably proficient in creating transactions and signing messages using those wallets.
- Identity Verification - While anonymity and privacy are important human rights that blockchain technology helps to protect, in some cases, such as this, it can be better to ensure that the identities of the responsible parties are known. It is ultimately up to the SPS stakeholders to decide whether or not they want to vote for anonymous candidates to be DAO treasurers, but the Splinterlands company is willing to indicate whether or not they have identity verification information for a candidate on file, without revealing any specific details, given express written permission by that candidate to do so in their candidacy post.