SFT DAO: Empowering Decentralized Governance and Shaping the Future of DePIN

4 min readNov 19, 2024

I. About SFT DAO

SFT DAO is the decentralized autonomous organization within the SFT Chain ecosystem, designed to promote project development and ecosystem growth through community participation. Community members can use governance tokens to vote on key project decisions, such as protocol upgrades, fund allocation, and LFG.

Members can propose suggestions or support and oppose others’ proposals. This mechanism ensures that SFT DAO maintains decentralization while driving continuous optimization for SFT Chain, supporting the “Chain of Chains” vision. This vision aims to bridge physical infrastructure with the Web3 world, establishing DePIN goals in areas such as aggregated storage, computing, and edge CDN.

Currently, SFT Protocol has not issued governance tokens but will do so soon to capture ecosystem value. In the meantime, rSPD credits will temporarily serve as a substitute for governance token functions.

What is rSPD?
rSPD credits are early credits within the SFT Protocol network, allowing holders to access DePIN services. Rather than purchasing credits from a specific company, rSPD holders gain services from the DePIN network. By participating in rSPD, users engage with SFT Protocol’s open-source ecosystem rather than a particular company or organization. Please note that rSPD credits do not represent an investment opportunity.

II. DAO Governance Process

The SFT DAO governance process consists of the following steps:

1. Proposal Submission: Community members can submit proposals covering protocol upgrades, fund allocations, LFG, etc. Proposals must meet certain requirements (e.g., rSPD credit threshold) to be formally submitted.

2. Community Discussion: Once submitted, proposals enter a community discussion phase. Members can discuss the proposal on designated platforms or community forums to build consensus.

3. Voting: After thorough discussion, proposals enter the voting phase. Members holding governance tokens or rSPD credits can vote to support or oppose the proposal. Votes are weighted based on the amount of tokens or credits held, ensuring voting rights align with each member’s holdings.

4. Proposal Execution: If the proposal passes, SFT DAO initiates the execution process to implement the proposed changes. For proposals involving technical modifications, the tech team assists with deployment or upgrades.

5. Review and Feedback: After execution, the community reviews the proposal’s impact and outcomes to gather insights and continually improve the governance process.

Through this process, SFT DAO achieves decentralized, transparent, and efficient governance, giving members opportunities to make autonomous decisions and contribute to project development.

III. rSPD Staking, Voting, and Redemption

3.1 Staking for Voting Shares
On the Solana network, members log in with their rSPD-holding wallets and stake their rSPD. For every 1 rSPD staked, members receive 1 voting share to participate in any active DAO proposals.

3.2 rSPD Redemption
After voting on a proposal, community members can unlock their staked rSPD at any time, with the option to cancel the unlock if desired. Please note that once unlocked, rSPD can only be redeemed to the wallet address after a 7-day waiting period.

IV. DAO Staking and Voting Incentives

DAO Staking Incentive Plan
By setting up a rewards pool, SFT DAO will encourage members to participate actively in staking and voting, increasing governance engagement and activity. Below is the planned staking and voting incentive plan (details to be announced):

1. Establishing the Reward Pool:

SFT DAO will pre-allocate a reward pool, containing governance tokens or rSPD credits. The reward pool can draw from community funds, DePIN revenues, or donations.

2. Staking Requirements

Members participating in voting need to stake a certain amount of tokens or credits to qualify for voting. Staking not only increases voting weight but also prevents misuse of the voting system.

3. Voting Reward Distribution

After voting concludes, rewards from the pool are proportionally distributed to voting participants. Rewards can be allocated based on:

Voting Weight: Rewards distributed based on the amount of staked tokens or credits; the more staked, the greater the reward.
Voting Activity: Members receive additional rewards for consistent and frequent voting, encouraging ongoing governance participation.
Proposal Outcome Alignment: A mechanism could allocate additional rewards to those supporting successfully passed proposals, promoting rational judgment and active contribution.

4. Long-term Staking Rewards

To encourage long-term governance engagement, SFT DAO will establish additional rewards, such as extra token rewards or weighted voting rights for members who stake over extended periods.

5. Periodic Reward Distribution

Rewards can be distributed monthly or quarterly, ensuring the sustainability of the reward pool. Periodic distribution also allows more members to participate, continuously attracting new participants to staking and voting.

6. Transparent Reward Distribution Mechanism

To build community trust, all rewards distribution will be publicly recorded on the blockchain and executed through smart contracts to ensure fairness and transparency.

Through these incentive mechanisms, SFT DAO can effectively increase community engagement, bringing more members into the project’s development and achieving robust decentralized governance.

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