Announcing Snapshot Voting with Anchorage Digital

At its most fundamental level, protocol governance can be defined as “determining some action through community input.” The more input from the community, the more faithfully the outcome reflects true consensus. Snapshot is a tool designed to reduce friction in providing that input. That is why we are excited to continue advancing crypto’s ethos of decentralization by announcing that Anchorage Digital users can now participate in Snapshot votes. We currently support over 60 ERC-20 tokens, and plan to enable support for all applicable future ERC-20 tokens.

Understanding Snapshot’s uses

Snapshot is an important piece of infrastructure for facilitating the governance process for protocols in the Ethereum ecosystem along with Ethereum Virtual Machine (EVM) chains, largely due to its accessibility. The interface makes it simple for teams to set up token-gated participation venues (“Spaces”), while enabling token-holding community members to vote on proposals for free. As a result, it serves as the hub for a huge amount of governance activity. According to our research, through the month of April 2023, there were:

• More than 1,600 “Spaces” that had at least one proposal made
• Over 5,500 unique proposals written
• More than 600 with more than 100 distinct votes, signaling a very active community

The tradeoff for such convenience comes in the form of on-chain guarantees; Snapshot voting is free because votes are counted off-chain and thus do not require gas payments. The responsibility to enforce the decision is typically entrusted to a multisig that the protocol team operates. For many protocols, especially ones who have fully on-chain governance on their roadmap, this is a sufficient middle ground. However, Snapshot’s off-chain nature can also be a strength—it means it is flexible enough to use as a signaling tool or to coordinate real-world activity.

How protocols are using Snapshot today:

• Aave uses Snapshot to host community discussion and measure initial sentiment around initiatives that will eventually be put through their on-chain governance mechanism.
• Lido had a vote for how to handle a referral program, which encompasses both on-chain work and administrative operations.
• BitDAO shows that Snapshot can still be suitable for making decisions about significant amounts of capital when there is sufficient trust between the voters and the team, using the platform to allocate DAO treasury funds.

Protocol governance and participation

For institutional clients, being able to participate in Snapshot voting through Anchorage Digital affords the ability to help shape the future of token projects by participating in guiding them to the best governance decisions. And protocol clients can be confident that token holders custodying with Anchorage Digital will have participation capabilities from day one.

All voting occurs from within Anchorage Digital Bank’s qualified custody with no movement of funds. Moreover, our bank charter explicitly allows us to facilitate governance participation.

If you have invested in a protocol that uses Snapshot for governance, please reach out. Likewise, if you are a protocol that uses or plans to use Snapshot, get in touch to see how our custody solution can help keep your tokens safe or check out our Snapshot governance page for more details.