The SundaeSwap Protocol’s Road to Community Governance

As part of SundaeSwap’s mission to be a completely decentralized exchange on Cardano, it is critical that the community assume responsibility for managing the DEX and its development, including the treasury. Community guidance through smart contract-controlled voting and governance is a core step in creating an ownerless marketplace facilitating direct, trustless engagement between community members.

This post is provided to give the community an update of what the governance smart contracts will look like and the timeline for full implementation.

Implementation at launch of the DEX was unfortunately not possible due to Cardano’s current transaction size parameters. The governance capabilities in the SundaeSwap Protocol’s smart contracts require transactions larger than 16kb, partly because of the requirement that the script be included in every transaction. We expect the parameters to be increased over time, but likely full smart contract-controlled governance will not be possible until after the Babbage HFC upgrades are implemented by IOG later in 2022.

Until then, the SundaeSwap Labs development team has created a governance category (called “Sundae DAO”) in the SundaeSwap Discord to discuss governance proposals and temperature checks on potential future proposals. Any critical decisions to be addressed in the near term may be subject to an informal staked community vote, similar to how the community voted in December 2021 to select the initial Stake Pool Operators to act as Scoopers. Further, all (interim) admin keys to the DEX have been placed under multi-sig control with a qualified independent custodian.

In addition to the Discord category, we have created a SundaeSwap Governance Discourse forum board for proposal voting, governance temperature checks, and general DAO discussion. This approach to governance is an initial, interim solution to community proposal voting for light protocol proposals. Proposals involving significant protocol parameter changes must also go through the formal SundaeSwap Governance Interface once it becomes available. If a submission to the Discourse proposal forum (found in the Proposals category) includes a significant protocol upgrade, it will be considered a “temperature check” and not a binding, final vote, so please post your idea in that category so the conversation can begin. We encourage you to wait for the SundaeSwap Governance Interface to make proposals with significant protocol changes or enhancements, as the DAO must consider the weight of each vote through the amount of SUNDAE held — something that is currently not possible via Discourse.

There are currently two proposals open on the Governance forum, so go ahead and vote on those while you explore and acquaint yourself with Discourse!

In future iterations of SundaeSwap governance, a governance smart contract will provide for a robust initial governance structure, including stake-weighted voting, proposal submission rules, token thresholds, delegation features, vote quorum and passage thresholds, as well as a time lock for successful code proposals. When smart contract-based governance is implemented, a full FAQ guide will be provided along with an initial proposal to outline several committees to be appointed to provide leadership in areas such as DEX development, new features, marketing and partnerships.

Please check out the Discourse forum board and Discord #governance channel for further updates!