VSP#1: VirtuSwapDAO Governence and Operational Scheme

VIP#1: DAO Proposal - VirtuSwapDAO Governence and Operational Scheme - June 15th, 2023

Proposal Summary:

A proposal to establish and approve VirtuSwapDAO operational flow and structure, including:

  • VirtuSwapDAO structure and decision types.
  • Proposal flow.
  • Proposal thresholds.
  • VirtuSwapDAO treasuries.

Establishment of the VirtuSwapDAO operation.

Proposal specification:

I. Establishment of VirtuSwapDAO structure and decision types:

This proposal aims to establish and approve VirtuSwapDAO design. The proposed design was inspired by prominent DEX DAOs that operate in the field, such as CurveDAO and BalancerDAO, as this structure has proved to serve the required needs adequately.

VirtuSwapDAO can make three main types of decisions:

  1. Ownership decisions - will have unlimited authority over the protocol and hold constituent authority to decide on governance schemes, funding proposals, classifying decisions or types of decisions as Parameter decisions and allocating specific responsibilities to other organs (e.g. emergencyDAO) or revoking them. As a constituent entity, ownership decisions hold supremacy over all types of DAO decisions, and can overrule Parameter decisions.
  2. Parameter decisions - a type of decision can become a “Parameter Decision” only by a successful Ownership proposal nominating a decision to be a Parameter Decision. Similarly, an Ownership decision can declassify a Parameter Decision as such. Typically, Parameter decisions will include specific authority to change parameters of the protocol, such as changing specific fees or blacklisting a token from allowed reserve list.
  3. EmergencyDAO - will include a mix of VirtuSwap team and prominent figures from the DeFi ecosystem, with specific, predetermined authority to intervene in the protocol activity in extreme cases, by which user funds could be at risk (e.g. due to smart contract exploits). The EmergencyDAO composition and responsibilities will be established in a separate proposal.

II. Establishment of proposals flow:

It is proposed to implement the following proposal flow for both Ownership and Parameter decisions:

Step1: Open Discussion - As a first step, especially if the proposal includes a significant or unprecedented change; or if the initiator does not hold enough voting power to file a binding proposal - the initiator should start an open discussion to get feedback from the community and converge on the required proposal. The discussion will take place on VirtuSwap Governance Forum, which is available here: https://discourse.virtuswap.io/

Step2: Formalize VirtuSwap Proposal Temperature Check (“VSP-TC”) - After receiving initial feedback from the community, the initiator should use the “VSP-TC#” template which is available in the Governance forum. The Proposal should be posted on a new forum thread with a relevant title, stating “VSP-TC#”. The community can comment and add new feedback to the formalized proposal.

Step3: Submit a Binding Proposal and Vote (“VSP#”) - A holder of at least 1,000,000 veVRSW tokens is entitled to propose an official, binding DAO proposal on Snapshot. The initiator should use the “VSP#: DAO Proposal” template available in the Governance forum.

Step4: Execution - After the proposal is approved, it will be executed within a reasonable time.

III. Establishment of proposals thresholds:

  1. Steps 1-2 above are non-binding, and thus any member of VirtuSwap community is free to submit such proposals with no minimum thresholds.

  2. Steps 3-4 above are binding, and thus subject to the following thresholds:

  3. Filing a binding proposal - requires 1,000,000 veVRSW tokens.

  4. Approving Ownership proposal - requires a quorum of at least 40% of the total veVRSW and support of the majority of voters (i.e. >50%).

  5. Approving Parameter proposal - requires a quorum of at least 20% of the total veVRSW and support of the majority of voters (i.e. >50%).

  6. Proposals will be open to voting for 3 days, after which votes will be counted.

IV. Establishment of VirtuSwapDAO Treasuries:

As described in VirtuSwap Tokenomics WP, 600M VRSW tokens are dedicated to Community and Growth and are subject to VirtuSwapDAO discretion. From which:

  1. 100M tokens will be immediately allocated to VirtuSwapDAO Treasury, which is managed by a multi-signature wallet. The DAO, via Ownership proposal, can decide to use these funds to support VirtuSwap growth and community, including for example funding partnerships and deployment on additional chains.

Ethereum address:


Polygon address:


  1. 200M tokens will be subject to 10 years declining algorithmic release to VirtuSwap DAO treasury stated above to support growth and community.
  2. 300M tokens will be used for LP incentivization, governed by a declining algorithmic release over a period of 10 years.
  3. 60M tokens are dedicated to VirtuSwap Development Fund. The development fund will be managed and used by VirtuSwap Foundation to fund its activities in supporting VirtuSwapDAO and its ecosystem, including development of future versions of the protocol and additional features.