How ENS Enhances DAO Governance & Transparency
DAOs (Decentralized Autonomous Organizations) are community-based organizations that operate fully or in part on the blockchain. Instead of relying on central leadership to make decisions for the community, DAO members make decisions through token-based voting.
To reduce the number of proposals a DAO must vote on, some DAOs, such as the ENS DAO, delegate decision making and action to smaller governing groups. This allows DAOs to be more nimble.
A DAO's elected group leaders fund ecosystem projects through multisig wallets. The amount of funds, the signers, the destination of funds, and the wallet itself are all visible to the community. However, it's not always clear who is who based on hex address alone.
ENS domain names instantly solve this. With ENS names, DAOs can provide more transparency into not only a multisig signer's activity, but their role within the community as well.
ENS Simplifies Governance
DAO governance controls large amounts of funding. For curious observers of DAO-funded multisig wallets, it can be difficult to decipher its activity from hex addresses alone. Adding ENS names instantly clarifies which wallet belongs to whom. One example is ENS DAO itself, whose working group members name their wallets to provide much needed transparency. ENSwallets.xyz is a great resource for viewing any ENS DAO working group's multisig wallets.
Other DAOs are catching on to this trend. Arbitrum DAO has funded many initiatives to fuel ecosystem growth; their multisig wallet signers show a growing mixture of ENS names in favor of hex addresses. ARBwallets.xyz provides a clear look into their signers.
ENS Subdomains Clarify Roles
ENS names can communicate more information than just a name. Some signers use subdomains to provide extra layers of clarification to their onchain activity. For instance, a subname like secretary.limes.eth gives clear insight into who an individual is and their responsibilities as secretary.
Incorporating ENS into DAO governance structures is a simple way to maintain high levels of identity transparency. By adopting ENS, DAOs can ensure that multisig signers are easily identifiable, roles are clearly defined, and trust is built within the community.