DFINITY thoughts on SNS/decentralization swap proposals


People have been asking about how the foundation will vote on SNS proposals.

Here is how I think about it personally – although please note that due to time restrictions I am not usually directly involved, and most foundation decisions involve lots of people and discussions. However, the opinions I express here can be seen as a good general reflection of the foundation’s thinking.

How DFINITY adopts/rejects vs abstains

Firstly, in voting, the foundation represents a large team and organization that works relentlessly on the Internet Computer. This is a primary part of our lives, and our interest, insights and experience are valuable. Not only do we have a right to vote, but the foregoing makes our votes important. We also have duty to vote in ways we think will best support the success of the ecosystem.

However, it is also true that generally speaking, we only vote on general matters if we feel strongly one way or the other, and otherwise abstain and leave the decision entirely to the community. Our abstention on votes regarding the SNS should be interpreted in that way. If we thought a project definitely shouldn’t be turned into an SNS DAO, for whatever reason, we would vote reject, and vice versa. If we did not feel strongly, we would abstain. Occasionally, we vote but only with a portion of our voting power. We are just another contributor to governance, albeit an important one.

Our abstention simply means that we are leaving the decision to the community.

Important note: people should always do their own research regarding their decision to participate in an SNS decentralization swap. Our voting does not indicate an endorsement or advice of any form.

Multiple attempts at becoming an SNS DAO

If a project does not succeed in becoming an SNS DAO at first, they should research the reasons why they did not get sufficient votes, address the issues, and try again. This is a completely normal process. When a startup company raises venture capital (a very different thing, but there are analogies) they often spend many months or even years refining their pitch to VCs, bolstering their teams, and improving their technology proposition. Persuading others can be a difficult process. There is no reason why the SNS process should be any different. A project wanting to become an SNS DAO, with a treasury of millions of dollars, is a serious thing. There’s no guaranteed ticket. Projects should expect to have to earn it. In my experience as an entrepreneur, who has raised venture capital several times, this process often makes projects much stronger.

There is no shame in making multiple attempts, any more than there is shame failing in an endeavor when you have given it your all. This is part of being an entrepreneur. I personally wish everyone luck and success.

Asking for “ICP Community Fund” contributions

We have heard some projects refer to the ICP Community Fund as being “our” money. This is a misconception that derives from the name of the fund, which we should change asap. The funds that the NNS can contribute to SNS decentralization swaps entirely derive from neurons owned by private individuals, whose maturity is being risked. Those private individuals are not giving away their maturity, they intend to contribute it to SNS DAOs that have a solid chance of success – it is not a grants program, or a charity in any way whatsoever (it would better be named the “Neurons Fund” to prevent these misconceptions).

Therefore, the more funds that an SNS/decentralization swap proposal demands from the ICP Community Fund, the higher the bar should be for acceptance. If a proposal asks for nothing from the fund, such that funding becomes entirely up to the free will of those participating in the swap, then the bar should be much lower imo.

Important note: currently the foundation does not have any Community Fund neurons, although this is something we are working on right now.

Private neuron owners can also prevent a swap taking place

The second SNS/decentralization swap proposal can be passed by the NNS, but made to fail by private neuron holders. The private individuals who own the neurons that support the fund, can simply untoggle the “Community Fund” tag on their neurons, such that the NNS cannot use reductions in neuron maturity to create the ICP required to contribute. So projects taking the SNS/decentralization swap path, need to bear in mind that they can still fail even if their second proposal gets adopted. Of course, many Community Fund neuron owners will just go with the flow, but it’s not a given.

Creating an ICP ecosystem with exponential growth

The SNS mechanism and “open internet service” paradigm generally is very important to the future of the Internet Computer vision. It can deliver enormous growth to our ecosystem if carefully chaperoned through the early stages. To succeed we need to go carefully, and make sure that the projects that become SNS DAOs truly deserve it and go on to become torch bearers for the ecosystem. The success of deserving early projects will draw in more capital from the decentralized ecosystem, ultimately making capital more freely available for all projects. Conversely, if early projects don’t go anywhere, or fail to apply raised funds effectively, we will see the opposite effect. We all need to keep this in mind – the success or failure of early SNS DAOs isn’t just important for the projects involved, it’s important for the wider ICP/Web3 ecosystem. Setting a high bar will create the track record we need to drive sustainable growth that will become exponential.

The NNS-SNS framework is not the only path

It’s important to remember that the SNS framework is not some kind of be-all-and-end-all. The Internet Computer is an open platform by design. For example, Taggr has chosen to create a completely custom DAO framework that has worked very well for them. They chose to create their own custom DAO framework that played well with their own unique vision and they didn’t need to get NNS proposals passed to do it. Projects taking alternative paths can also find ways of moving over to the SNS framework later.

The SNS and ledger code is all open source. Anybody can take that code, re-use it, customize it, etc. So it would be wrong to think there is some kind of dictatorship by NNS. The SNS framework controlled by the NNS is just one way, and there is plenty of space for alternative visions.


In addition, we are also thinking of proposing a change to the “Community Fund” such that it acts as a matching contributor instead of a primary contributor in all cases. For instance, if one were to raise 1M ICP they would ideally have to raise say 2/3rd from the community and the community fund could match up to 1/3rd (numbers are just for illustration).

That way the community fund isn’t burdened with majorly bankrolling a given project when it fails to garner the overall community support.


Given this point/moment of time, this is the BEST decision that not only makes sense but also helps the community and the roadmap as a whole. Thank you

1 Like

i think it makes sense

Thanks for sharing your thoughts on the SNS process and providing valuable context to both the teams preparing to launch an SNS proposal and also to those engaging actively in community due diligence on those projects.

Clarity of thought around the many considerations in play here should help inform the sometimes intense discussions going on in these forums!

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Brilliant. Puts SNS in the control of the community.

Great point, really appreciate for the sharing.