If you’ve been hanging around in the Solana community, chances are you have seen someone post a link to Squads. Squads is an infrastructure application that enables multiple entities to interact together as a team. An example is the Katana team that won the Solana Ignition hackathon.
What is Multisig?
Multi-Signature Wallets are cryptocurrency wallets that require additional signatures from more than one private key to approve or deny a transaction. This type of wallet makes it possible for companies or groups of people to sign a document as a body. It is like the type of bank accounts created for a company which requires at least two signees from the company before the bank can process their transaction.
Instead of trusting a person to keep the funds of a project personally with different risks associated with it, they can use Squads for a multisig setup. Some of the risks of keeping a web3 project’s fund with a person is that they can be robbed of the private key, decide to rug, or use the funds for something not helpful for the project – and in the worst case, they may die. This means that the funds will be lost forever. But with Multisig, those with the responsibility of signing will be able to assess any transaction that wants to take place on their wallet.
The second way to use Squads is as a Team of developers that can make proposals, grant members their voting abilities and the weight of their votes. All team members might not have the same voting (this is subjective to the project and the type of work they are building).
Once a proposal is made, the link is shared around and the members that have the permission to vote on the proposal and they cast their own votes too.
Decentralized Autonomous Organization is an organization that runs on the collective decisions made by its members. They are native to blockchain-based startups and projects. This system of leadership is not controlled by a central authority but based on members that are eligible by using some certain metrics e.g., Holders of a Degenerate Trash Panda NFT can vote to either open-source their codebase or not.
A startup or a project built on a blockchain can leverage the blockchain for decentralized decision-making schemes. The larger a project becomes, the more difficult it becomes to make decisions. Some proposals require specialized voters to make decisions if not there will misinformation and poor decisions made by the DAO.
An example, if a web3 project thinks they should buy a basketball team with their treasury because it will help create more brand awareness for their project in the physical world, the decision-making should not fall into the hands of people who knows nothing about branding and marketing. Just because they are token holders does not mean they should participate in that particular type of proposal. This leads us to what is called subDAOs. A subDAO is a subset of the main DAO that is created to make decisions that are very specialized with respect to what is being proposed.
Using Squads for to approve a proposal
I used squad to set up a proposal for my team to show a short sample on how squads work practically. My team made up of two people – Myself and Flo. I created the squad below some days ago while testing the platform.
I made a proposal for us to go to Hdfvd…. It basically means “Moon”, I think…
The voting page shows you the information needed on what the proposal is all about.
As you can see below, there is a sliding bar that shows the level of the decisions that has been made. The Support bar shows your own position in the
If Quorum is not reached, it means enough people didn’t vote at all or enough people rejected the proposal.
In the vault where the funds of the Squad is stored, you can deposit into it or withdraw funds from it. It is multisig so that in case of a private key or seed phrase hack, a compromise or any other unfortunate instance that can lead to loss of funds, the approval of such transactions requires the total number of those needed to approve the transactions.
After navigating to the app, you will see the “Create Squad” button. Select it to start the squad creation process.
After clicking on “Create Squad”, you will be able to pick the name for the squad, the token name or ticker and its description.
You can create a token that signifies voting power for the holders.
The tokens created can be distributed as you deem fit as the creator or you can make it equally distributed among the members.
There are rules that can be followed that are fair to all the members of the Squad.
The member #1 is going to be you (the creator of the Squad). Then you can click on the “+ add initial member” to input a new member into the team.
After selecting the “add initial member”, you will be able to input the public key of that next member. Click on “Next” for the final step.
After verifying all the details included the Squad to be created, click on “Deploy” and your Squad is set!
It is important that Development Teams, Web3 startups or any form of organization with cryptocurrency-enabled activities implement multiple signatory and democratized systems for improved security, transparency and ordered decision-making systems. It gives individuals the power to participate actively in the directions a protocol should make.