ECIP 1113: Olympia DAO Governance Framework

Author	Cody Burns, Chris Mercer
Discussions-To	https://github.com/orgs/ethereumclassic/discussions/530
Status	Draft
Type	Meta
Created	2025-07-04
Requires	1111, 1112

Simple Summary

This ECIP defines the on-chain governance framework for the Olympia DAO, the decentralized organization responsible for managing Ethereum Classic’s protocol-level treasury (as established in ECIP-1112). Olympia DAO enables permissionless proposal submission, token-weighted voting, and accountable execution of development funding through the Olympia Treasury, aligning governance with the network’s long-term sustainability and decentralization principles.

Abstract

This ECIP specifies the structure, roles, and functions of the Olympia DAO — a decentralized autonomous organization that governs the Olympia Treasury contract (ECIP-1112) and oversees the allocation of on-chain development funds on Ethereum Classic. The DAO framework supports permissionless proposal submission, transparent community voting, and time-locked execution of approved proposals.

The Olympia DAO is implemented as a smart contract system composed of governance logic, voting mechanisms, and disbursement interfaces. It operates independently from any central authority and is governed by ETC stakeholders via open participation in decision-making through on-chain processes. The DAO ensures that Ethereum Classic’s protocol-level funding — sourced from redirected BASEFEE revenue per ECIP-1112 — is allocated fairly, transparently, and in alignment with the network’s values of decentralization, immutability, and sovereignty.

Motivation

Ethereum Classic’s development has historically relied on a small number of centralized entities or foundation-style organizations to manage funding, often with opaque processes and limited community oversight. This has led to gatekeeping, inconsistent support, and misalignment between contributors and the long-term interests of the network.

With the activation of ECIP-1111 (EIP-1559) and ECIP-1112 (Olympia Treasury), Ethereum Classic now has a native, protocol-level funding stream derived from transaction fees. To ensure this funding is allocated in a decentralized, permissionless, and transparent manner, the network requires a governance system capable of managing these resources without reliance on trusted third parties.

The Olympia DAO is designed to:

Democratize access to funding for developers, infrastructure providers, and public goods contributors.
Eliminate centralized control over grant disbursements.
Create an open, auditable process for proposing and approving funding initiatives.
Encourage broader participation in Ethereum Classic governance.

By transitioning from a model of discretionary funding to one based on on-chain rules and stakeholder consensus, Ethereum Classic reinforces its commitment to sovereignty, neutrality, and long-term sustainability.

Other EVM networks such as Ronin, Celo, and Mantle have adopted similar governance architectures where protocol fee revenue is directed to DAO-controlled treasuries. Olympia DAO builds on these proven designs, enabling Ethereum Classic to govern its basefee-derived treasury with transparency, decentralization, and permissionless participation — all without altering ETC’s monetary policy or Proof-of-Work consensus.

Specification

Governance Model

The Olympia DAO SHALL operate as a smart contract system deployed on Ethereum Classic and SHALL govern the disbursement of funds from the Olympia Treasury (see ECIP-1112).

The DAO MUST include the following core components:

Proposal Submission: Any address SHALL be allowed to submit a funding proposal via the DAO contract interface. Proposals MUST specify:
- Requested funding amount
- Target recipient address
- Purpose and scope of work
- Proposed disbursement schedule (e.g., milestones, vesting, single payout)
Voting Mechanism: Proposals SHALL be subject to an on-chain voting process governed by a transparent stake-based or reputation-based system. Initial implementation MAY use token-weighted voting (e.g., staked ETC, a soulbound participation token such as veOLY, or quadratic models), subject to future upgrade. The initial veOLY or governance token supply mechanism SHALL be established via a DAO-approved proposal, with no pre-allocation.
Quorum and Thresholds:
- A minimum quorum MUST be required for any vote to pass.
- Funding proposals MUST meet a configurable approval threshold (e.g., 60% yes votes) to proceed.
Execution Engine: Upon successful vote, the DAO SHALL schedule the approved transaction for execution. Execution MAY be time-locked to allow for review and emergency veto mechanisms.
Treasury Interaction: The DAO contract MUST be authorized to call functions on the Olympia Treasury contract (ECIP-1112), including release() and execute() for fund disbursement.
Transparency Logs: All proposals, votes, and fund transfers MUST be logged on-chain and indexed for public inspection.

Contract Properties

DAO logic MUST be implemented as modular, upgradeable smart contracts with clear interfaces.
The DAO SHALL have no centralized admin control over treasury funds.
Emergency governance MAY be enabled via community-elected multi-signature fallback to pause or freeze malicious proposals, subject to public audit and strict usage limitations.

Rationale

Ethereum Classic has long lacked a credible, open, and transparent governance process for allocating protocol-level funds. Historically, development efforts were funded off-chain by private actors, centralized foundations, or non-transparent grant programs — often leading to mistrust, misalignment, and fragmentation.

The Olympia DAO introduces a permissionless, on-chain governance system that reflects Ethereum Classic’s values of decentralization, immutability, and sovereignty. By integrating directly with the Olympia Treasury, the DAO enables protocol revenue to be allocated toward public goods through a community-driven process.

Key motivations include:

Neutrality: Governance is not controlled by any single entity or foundation. Any network participant may submit proposals and vote.
Transparency: All actions — from proposal to disbursement — are logged on-chain, providing full visibility into the funding lifecycle.
Sustainability: Funding is tied to protocol activity, allowing Ethereum Classic to bootstrap ecosystem growth without relying on inflation or donations.
Security and Modularity: Separating treasury and governance logic enables upgrades to the DAO contract without compromising treasury integrity.
Resilience: Open governance enables a diverse and global group of participants to shape Ethereum Classic’s roadmap, making the network more resilient to capture or stagnation.

The Olympia DAO does not seek to control the Ethereum Classic protocol itself but instead manages the allocation of funds in support of its development and infrastructure. Protocol upgrades will continue to follow the ECIP process (ECIP-1000), while funding decisions for implementation and ecosystem grants are governed by this DAO.

DAOs on networks like Celo and Ronin serve as governance layers for treasury flows derived from gas fees. By modeling Olympia DAO similarly—where BASEFEE revenue is transparently governed through tokenholder proposals and on-chain execution—Ethereum Classic can adopt a mature and decentralized mechanism aligned with EVM ecosystem practices. Olympia DAO mirrors the modular design adopted by other successful EVM DAO frameworks. Celo routes gas fees through a community-governed handler. Ronin Treasury proposals are governed by tokenholder votes. MantleDAO manages sequencer revenue allocation through DAO smart contracts. Olympia DAO follows this emerging pattern by cleanly separating treasury execution (ECIP-1112) from governance intent (this ECIP), ensuring long-term resilience and governance upgradability.

Olympia DAO draws inspiration from governance frameworks and DAO-treasury integrations used across the EVM ecosystem:

Celo: Implements community-governed treasury flows through its Gas Fee Handler and Carbon Offset Reserve, funded by gas fee redirection.
Ronin Network: Utilizes tokenholder governance to manage a basefee-funded treasury for ecosystem grants and validator rewards.
Mantle: Employs a modular DAO system (MantleDAO) to manage sequencer-generated protocol fees in a transparent, on-chain process.
Polygon CDK: Enables rollup deployers to integrate modular DAOs and EIP-1559-compatible treasury flows into sovereign chains.
OP Stack (Base, Optimism): While not redirecting basefee to treasuries, these systems implement custom fee splits via sequencer rewards governed by L2 tokenholder proposals.

These models validate Olympia DAO’s architecture as consistent with best practices for decentralized funding and EVM-aligned governance.

Olympia DAO also draws technical inspiration from mature, battle-tested governance frameworks that have governed significant on-chain treasuries and evolved with ecosystem best practices:

Aragon OSx (used by Lido DAO): A modular and upgradeable DAO stack that enables fine-grained permission management and secure on-chain governance. Audited by Halborn and Code4rena, Aragon has secured billions in value for DAOs like Lido and API3. Its governance system supports proposal submission, on-chain voting, and treasury execution through customizable plugins.
Compound Governor Bravo: The second-generation governance system for Compound Finance. It introduced configurable voting delays, thresholds, and quorum requirements. Widely used and audited, Bravo enables token-weighted proposal flows with timelock-enforced execution.
OpenZeppelin Governor: A modular governance contract suite that mirrors Compound’s model but allows flexible integration of voting modules (e.g., ERC-20, ERC-721, veTokens). OpenZeppelin Governor contracts are audited and form the backbone of many DAO deployments due to their composability and clarity.
Aave DAO Governance Framework: Aave Improvement Proposals (AIPs) follow a token-weighted voting process with configurable thresholds, followed by execution via audited TimelockExecutors. Aave’s DAO system has governed multibillion-dollar treasuries and introduced cross-chain governance extensions with timelock safety.

These frameworks validate Olympia DAO’s architecture by demonstrating secure, upgradable systems that support open participation, transparent execution, and scalable governance logic. Olympia DAO adapts these principles to Ethereum Classic’s unique Proof-of-Work and immutability guarantees.

Implementation

The Olympia DAO governance system will be implemented as a modular set of smart contracts deployed on Ethereum Classic, designed to interact directly with the Olympia Treasury (ECIP-1112). The system includes the following components:

1. Governor Contract

Core logic for proposal submission, voting, and execution.
Inspired by battle-tested frameworks like:
- OpenZeppelin Governor
- Compound Governor Bravo
Customizable parameters such as:
- Proposal threshold
- Voting delay and period
- Quorum requirements
- Timelock delay for execution

2. Timelock Contract

Acts as a secure buffer between successful proposals and fund disbursement.
Enforces a delay before execution to allow for public review or veto mechanisms.
Prevents rushed or malicious proposal execution.

3. Voting Mechanism

Token-based voting using ERC-20-compatible vote tokens (e.g., gETC, veOLY).
Quadratic or delegated voting MAY be supported depending on governance evolution.
Voter snapshots are taken at the block in which the proposal is submitted.

4. Proposal Registry and Metadata

On-chain metadata pointers (e.g., IPFS, Arweave) for human-readable proposal details.
Off-chain discussion platforms (e.g., ECIP forums, Discord) used for proposal deliberation.

5. Integration with Olympia Treasury

Upon successful vote and timelock delay, the DAO contract will call the execute() or release() function of the Olympia Treasury contract to disburse funds.
All executed disbursements MUST emit a ProposalExecuted event from both the DAO and Treasury contracts.

All contracts will be published open-source and audited before mainnet deployment. A phased testnet rollout on Mordor will be used to validate system integrity, voting behavior, and treasury integration prior to production use.

Governance parameters may be initialized with conservative defaults and adjusted via governance vote once live.

While the Olympia DAO operates entirely on-chain for governance, voting, and proposal execution, an external legal interface is provided through the Ethereum Classic DAO LLC (see ECIP-1114). This Wyoming-registered entity facilitates real-world compliance tasks such as fiat conversion, tax reporting, and contractor onboarding. It does not hold treasury funds or possess decision-making authority. Instead, it acts solely as a compliance and execution layer for off-chain disbursements authorized by DAO governance.

Backwards Compatibility

The Olympia DAO governance system is a new protocol layer and does not alter the Ethereum Classic virtual machine, consensus rules, or transaction formats. As such, it is fully backward-compatible with all existing smart contracts, wallets, and tooling.

Participation in governance is opt-in. Only users who wish to vote, submit proposals, or interact with the treasury need to engage with the DAO contracts.

Key backward compatibility notes:

The Olympia DAO contracts do not impact non-participating dApps or users.
The Olympia Treasury (ECIP-1112) will only disburse funds through governance-approved proposals.
Legacy transactions and contracts will remain fully functional and are unaffected by DAO operations.
Nodes that do not upgrade to include the Olympia Treasury or ECIP-1111 logic will diverge from consensus, but nodes that do not interact with the DAO specifically will remain compatible.

Because the DAO system exists entirely at the smart contract level, its deployment poses no risk to prior state or core protocol functionality.

Security Considerations

The Olympia DAO introduces a governance layer that must be designed with strong safeguards to prevent abuse, mismanagement, or centralization. Key security considerations include:

Governance Capture: If a single actor or small group acquires majority voting power (e.g. via token delegation), they could push through malicious proposals. Mitigations include quorum thresholds, delayed execution, and dynamic participation incentives.
Smart Contract Vulnerabilities: All DAO contracts must undergo rigorous audits and formal verification. Governance logic should avoid complex branching logic or unsafe delegatecall patterns.
Proposal Spam & Denial of Service: To prevent spam, proposal submission may include minimal thresholds such as time-locks, token staking, or vetting periods. DAO design should protect against front-running or griefing of active proposals.
Funds Misallocation: The DAO must enforce strict execution paths that only allow funds to be released to externally validated proposals, minimizing the chance of accidental or fraudulent disbursements.
Treasury Safeguards: The Olympia Treasury contract MUST NOT allow direct EOA withdrawals. All transfers must be triggered through verified governance execution paths to ensure full auditability.
Upgradability Risks: If the governance system is designed to be upgradeable, those upgrade paths must themselves be subject to governance approval and time-locked delay to prevent hostile takeovers.
Client Divergence: Clients must verify that governance-triggered treasury withdrawals match the approved proposals. Inconsistencies between governance execution and treasury state could lead to consensus-breaking behavior.

Thorough testing on Mordor Testnet, peer review from ecosystem participants, and third-party audits of the DAO and treasury contracts are critical before mainnet deployment.

ECIP 1113: Olympia DAO Governance Framework Source