Inside Aragon’s Bold Bet on the Future of Decentralized Power

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Victoria d’Este

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Few leaders have seen the event of DAOs from as many angles as Anthony Leutenegger, from early experimentation to steering one of many ecosystem’s most influential governance initiatives. On this interview, the Aragon CEO displays on how decentralized governance is maturing in 2025, why the following wave of DAOs will look nothing like their predecessors, and what it actually takes to construct resilient, clear decision-making techniques at scale.

Anthony, might you share your journey into Web3?

I’ve been working at Aragon for 4 and a half years. I joined crypto as a result of I discovered this nice challenge that was once a subsidiary of Aragon known as Vocdoni, they usually have been constructing a blockchain-based voting protocol. Its aim was finally to have nation-states operating incorruptible elections. 

I assumed, what an unbelievable and excellent use case for blockchain know-how. We’re in a world and business the place there’s a variety of hypothesis and cash flowing round, and people are legit use instances, however with the ability to have incorruptible elections might remedy a plethora of world issues.

That’s why I utilized for a job at Vocdoni. I finally moved into the Aragon challenge, which owned Vocdoni on the time and targeted extra on governance, capital distribution, and token economics at a a lot increased degree than simply voting. I later took over the corporate, and now issues are going nice.

Might you give us an summary of Aragon’s present mission and the way it has developed over the previous couple of years?

Yeah, our present mission has undoubtedly developed over the previous couple of years. It was once about permitting organizations to experiment with governance on the velocity of software program. The purpose was that you can have choices executed with out trusted intermediaries. It’s the identical as making a fee on a blockchain; you take away the middleman. With blockchain know-how, we are able to take away intermediaries from executing an motion. Within the conventional world, folks vote or take part, however actions often require others to execute them.

Now, choices, whether or not it’s shifting funds, upgrading code, or granting entry, will be made by a bigger group of individuals with out anybody within the center. It turns into very censorship-resistant. It’s the primary time in historical past we are able to do that as a result of we abide by the code as regulation.

That was Aragon’s previous mission, and we nonetheless work closely in governance. We nonetheless enable organizations to construct their access-control mechanisms for a way they govern their code base. For instance, when Lido needs to improve its code, they do it on Aragon’s sensible contracts. We safe their code base. If Katana needs to maneuver cash on the brand new Polygon challenge, that’s the identical factor.

Now we’ve expanded into tokenomics. We help initiatives in constructing their very own governance techniques, tokenomic techniques, and development flywheels. Our mission is way broader at present.

In your view, what are the important thing differentiators of Aragon’s governance framework in comparison with different DAO tooling or platforms?

Yeah, we undoubtedly have the latest modular mannequin. We separate the vault and core permissions from the governance methodologies, and anybody can set up these methodologies or plugins to realize what they need. For instance, if you’d like a governance sort that isn’t token-based voting, you possibly can set up the multisig plugin or the digital identification plugin.

You possibly can even set up a number of plugins on the identical time, permitting totally different teams, possibly a multisig and token holders, to manipulate collectively. It’s extremely customizable, upgradable, and at all times entails tokenomics. Tokens drive nearly all the things in our business, so with the Aragon stack, you possibly can create lockers, stakers, and mechanisms for locking, staking, and capital distribution. It’s modular, customizable, and future-proof.

What’s the strategic significance of modular governance contracts, for instance, plugins for scaling organizations over time?

Yeah, it’s tremendous essential. Main initiatives wish to alter governance and capital flows extra simply, however many can’t do it safely as a result of they’re caught with previous, heavy, library-based contracts. Making issues modular permits simpler changes. Upgrading turns into so simple as uninstalling and putting in a brand new plugin, which is only a small a part of the code base.

You possibly can improve from multisig to token-holder voting as you decentralize over time. You possibly can add staking mechanisms for token holders to manage capital flows. It makes governance safer, extra customizable, and extra future-proof. It’s unquestionably a greater system.

What are crucial coverage or regulatory traits you see that can have an effect on on-chain organizations within the subsequent 12 to 24 months?

Yeah, that’s an amazing query. What we’re seeing, particularly from the US and from what companies like a16z are discussing, is that on-chain possession or on-chain management will change into crucial parameter defining decentralization. It gained’t essentially appear to be the previous DAO mannequin the place everybody votes on all the things. 

It is going to deal with a smaller floor space of management, however that management should be decentralized, which means token holders should even have management with out an middleman basis or multisig. Or the system will have to be immutable, the place no particular person or group can change the code for private profit.

So decentralization can be outlined by management and possession. I believe we’ll see much less generalized governance and extra deal with governing particular issues that should be decentralized, protocol upgrades, payment switches that distribute worth to token holders, and related parts.

How do you put together for adapting to those regulatory adjustments?

Fortunately, we’ve been making ready for years. Three years in the past, we already noticed this downside and began shifting towards addressing it. On our present stack, you possibly can management your protocol in a extremely decentralized means with out having to vote on all the things. Totally different folks can management various things, and initiatives can outline how entry management is structured.

On high of that, we create automated and programmatic capital-distribution flows. Tasks that wish to accrue worth to their token can accomplish that in a programmatic, automated means that isn’t centrally managed, making it extra more likely to meet future regulatory expectations, one thing our rivals can not do.

What are the primary dangers you foresee for organizations adopting on-chain governance, and the way does Aragon search to mitigate them?

I believe the technological facet is usually solved. We’ve created a really secure surroundings for organizations, and we’ve secured 45 billion {dollars} in property since 2017–18. For me, the larger threat is what’s being managed and by whom.

Proper now, many initiatives counting on token holders for safety face an issue: safety degrades over time if the token has no worth. If a token secures a protocol however the challenge isn’t producing income, there’s no incentive to carry it. Individuals promote, decentralization decreases, and the system breaks down.

We want tokens to carry worth and safe one thing significant. When that occurs, the system naturally turns into safer.

For a corporation contemplating launching a DAO by means of the Aragon app, what key strategic governance choices should be made upfront?

They should perceive who will management what. Additionally they want to grasp the worth of the token that controls protocol parameters, which is crucial. Different issues embrace whether or not they need a VE mannequin, a locker mannequin, for token holders to lock or stake, or whether or not they need an ERC20 vote-standard token. These are nuanced choices, and they need to attain out to us earlier than launching.

However most significantly, they need to perceive the place their product is heading, how it will likely be managed, and why folks will take part in guaranteeing it stays decentralized.

Might you share any success tales or case research the place Aragon’s governance structure considerably improved organizational outcomes?

Yeah, for certain. Let’s take a look at Curve. Many initiatives at the moment are adopting the VE gauge mechanism, which is changing into well-liked once more. The primary model of ve & gauges was inbuilt Aragon in 2020 by Curve. VE stands for vote escrow, which means a token holder locks tokens for a interval and good points particular voting energy primarily based on parameters set by the challenge.

The concept is that as a result of they’re locked into the system, they need the token to be value extra when it unlocks. They’re typically given energy over distributing capital, liquidity, or different essential assets. They vote within the long-term curiosity of the protocol. The extra they take part, the extra rewards they obtain.

This creates a development flywheel, incentives to carry, take part, and make good choices. Tasks with respectable product-market match utilizing ve & gauges, Curve, Aerodrome, Katana, and others, have seen constructive outcomes, together with a better share of tokens locked and elevated valuation.

How do you view the way forward for governance requirements, greatest practices, auditability, and transparency for on-chain organizations?

I don’t assume we’re at a technological level the place we should always outline strict requirements but. It’s nonetheless too early. We want extra natural adoption and extra tooling earlier than issues ossify into requirements.

Nonetheless, governance requirements can be formed by regulation, significantly round how capital and incentives will be distributed. Tasks in the end wish to generate income and improve token worth, in order that they’ll study and adapt as clearer laws emerge. As adoption grows and extra use instances seem, we’ll be capable to outline higher greatest practices.

We already see early examples. Lido is a profitable DAO working in a strategic means. The ve & gauge mechanism works properly for DEXs like Curve. And DUNA is rising for initiatives like Uniswap, with decentralized governance over particular parameters.

We’re beginning to see the primary hints of requirements and greatest practices.

About The Creator

Victoria is a author on a wide range of know-how subjects together with Web3.0, AI and cryptocurrencies. Her intensive expertise permits her to write down insightful articles for the broader viewers.

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Victoria d’Este