Lex Multi-Sig: Minimalist Orgs for All

[ross]

Multi-signature wallets are the standard for on-chain coordination. They are simple to understand and are often the ‘pre DAO’ solution for many founders and communities experimenting with crypto.

Currently, Gnosis SAFE is the dominant solution. There is no competitive product being incubated, yet compelling, minimalist alternatives have been proposed by smart contract engineers, exA. It seems timely to expedite development of a ruthlessly minimal multi-sig pattern as an alternative to Gnosis SAFE, in the spirit of coopetition, and to provide this as a public good that can be incorporated by Gnosis and other crypto protocols interested in multi-sig patterns. The next wave of adoption, driven by migration of traditional corporate structures to mirroring their operations with smart contract and trust reduction tech will likely see multi-sigs as a bridge software, and LeXpunK can support and brand this solution to evangelize adoption by corporate boards and founders.

Some opinionated changes that can provide immediate value and contrast:

• Issuing NFTs to key-signers: This makes their roles composable with other smart contracts, and can also store discrete metadata related to each signer, such as disclosures and agreements.
• Ragequit: This capital exit pattern has been popularized by the Moloch DAO framework and at this point seems a necessary core feature of treasuries to protect minority interests, and as a failsafe security measure. Unlike Moloch, it makes sense for this feature to be toggled on/off through governance.

A contract design incorporating these features, built on the aforementioned multi-sig patterns, with the addition of the Solmate library to provide gas efficient NFT and asset transfers, can be reviewed here.

This proposal pitches LeXpunK to fund a core developer group to take this solution to market, starting with EVM, but also deploying in rust to support teams on Solana and Terra. As a simple contract pattern, adaptation to different languages should be far easier than porting over the existing SAFE design.

MVP looks like: (i) Audited Multi-Sig Contract, (ii) User Interface. The addition of code deference agreements curated for multi-sigs between LeXpunK and LexDAO would be a plus, and would further a lot of the great open source legal work done by these communities.

The ask: $100k to fund (i) smart contract audits (budget ~$40k), (ii) developer time (~$30k), (iii) lawyer time (~$30k). Audits will be the foremost priority, as this is the biggest impediment currently to launching an alternative multi-sig solution. The proposed developers are Kali, a team of legal engineers building DAO tools under LexDAO. Legal work is suggested for LeXpunK input.

Let me know your thoughts,
Ross

[sirvine]

As this proposal correctly points out, setting up a multi-sig is as fundamental to an on-chain project as forming a corporate entity and bank account are to setting up a tradcorp.

100% in support of this.

[mccallios]

Having ability of key signers to have NFT with representation of their disclosures, holdings etc would seem nice way of building trust for key signers.

Also would think pattern of being able to freeze rage quit might come in handy if DAO is entering zone of insolvency, or some other high risk area.

[jordans]

For it and for Ross and the Kali team building it.

[sydlaurenx]

I want to bring attention to some of the discussion that has gone on in the LeXpunK Army chat re: @ross and LexDAOs proposal. Please continue to share your thoughts, questions, and feedback for Ross and the team

[ross]

thanks @sydlaurenx! In brainstorming, I also arrived on another feature set that I think could be interesting to distinguish from Gnosis, as well as cater to more legalistic use cases …

for background, and for less technical folks, a multi-sig is basically a shared wallet between accounts with a quorum setting to execute on-chain actions. this ‘quorum’ might be 3/5 signatures, or 6/9 for higher-stakes treasury multi-sigs.

it makes a lot of sense to allow multi-sigs to specify different quorum thresholds for different kinds of actions. for example, a multi-sig might want to be nimble and only require 2 signatures to execute an AMM swap or spend assets, but require 4 signatures to add a new key-signer. I am not aware of this design being implemented in the wild, and it seems like a great thing to introduce to the design space. In terms of implementation, my idea is to add a mapping to my POC that associates ‘function selectors’ (that is… different actions) to a quorum threshold that is checked on multi-sig execution.

[Rawl]

as said already in the chat, I’m fully supporting this. Great idea Ross!

[sydlaurenx]

This is a very interesting proposal and as Ross points out, considering the oncoming wave of interest and potential adoption from traditional entities to adopt permissionless tech - a simplistic multi-sig design is ripe for building.

LeXpunk would fund the core developer group take the solution to market (EVM, but also on Solana and Terra). Taking the solution to market would probably us mean publishing on our GitHub to encourage use - I’m thinking to potentially form a WG to build a testnet and see how it works in practice. Would love other feedback how we can support this project.

Beyond the budget to fund development / developer time - Ross and LexDAO are also asking for lawyer time.

What kind of legal advice is needed in this kind of project? If anyone has input here - including @ross would love to hear prior to bringing a vote

[Sull]

Thanks Ross for the proposal. I’m very much behind the idea of a minimal, public alternative to gnosis safe, particularly if it can be brought in a way that can position LexPunk as a catalyst to this wave of adoption of trustless systems.

In terms of the legal advice needed for this kind of project, I imagine a chunk of the work would need to be an analysis of the solution (and of any ongoing upgrades/developments) from a corporate compliance and governance POV in order to provide comfort to the Boards who we will be trying to evangelise. In other words, we will need to demonstrate regulatory alignment. To do so on an individual basis would be prohibitively costly for these companies, so we should aim to produce a comprehensive and robust analysis which considers a broad range of functions and contexts to which the tool could be applied.

Can we discuss further what is meant here by a public good? It is proposed that LeXpunK can evangelise and brand the solution, while Kali will develop. Who will be responsible for governance, decision-making, and ongoing development beyond MVP? There may be more ongoing investment required than for many other public goods, e.g. the need for ongoing legal assurance/support for in-house legal teams reaching out on behalf of their companies.

Sull | Jack

[ross]

I appreciate the vote of confidence @sydlaurenx and I am excited to bring a gnosis alternative to market. My latest code is outlined here, https://gist.github.com/z0r0z/92e3ed35deac26863ee1d988dd26c813, which I will document and write unit tests for this week. As currently devised, the code is a factory to generate very cheap minimal proxy multi-sigs that have NFTs (which can be transferable or non-transferable) for key-signers, and a “loot” concept to ragequit and claim treasury funds. I am proud of how this has turned out, and I also built in a concept of extensions through “governor” contracts that can call functions on multi-sig if authorized by the key signers. If we can get funding, I will immediately request an audit and Kali devs will build a frontend. As part of deliverable, happy to put the code into LexPunk repository to reflect the sponsorship.

Regarding legal support, yes, I echo the suggestions of @Sull ~~ that we would essentially want a set of templates to form companies with a multi-sig at its core, as well as risk factor and similar language to help make traditional companies more comfortable using this kind of smart contract tool to manage aspects of their corporate governace.