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SafeDAO, the organization governing the smart wallet platform Safe, may soon vote on the possibility of making its SAFE token transferable.
SAFE tokens, introduced in 2022, are a form of digital assets designed for governance within the SafeDAO ecosystem. Over the past two years, recipients of these tokens have been able to use their allocations to vote on proposals that affect the development and operational decisions of the SafeDAO platform.
Initially, these tokens were non-transferable; they couldn’t be bought, sold or traded on any platform. This design choice was likely aimed at ensuring that only stakeholders with a long-term interest in the platform’s success could influence its direction, rather than speculative traders.
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If enacted, the decision to make SAFE tokens transferable will mark a notable shift in SafeDAO’s strategy. Allowing transfers will increase liquidity, making it possible for people to buy and sell SAFE tokens, and will widen participation in governance by attracting a larger and more diverse group of token holders.
André Geest, the head of governance at Safe, told Blockworks that this newfound flexibility could allow the project’s DAO treasury to fund interesting projects within the ecosystem. It could also enable the organization to set up a rewards program and incentivize the usage of safe smart accounts.
“The token also plays a role in this future design space,” Geest said. “When you think about security abstraction, the token could play a role in curating registries. When it comes to payment abstraction, it could help facilitate fee transfers, for instance.”
Making sure tokens are safe
An initial vote to make SAFE tokens transferable in 2022 failed after some community members said, amid hundreds of forum replies, that SafeDAO should first more clearly define its mission and operations.
Geest explained that the 2022 vote hadn’t passed due to a combination of both internal and external factors.
“It was seen that the DAO was not mature enough, in the sense that it didn’t yet have a North Star. Also, one could say that the DAO didn’t have a market fit or a product fit,” Geest said.
Additionally, following the collapse of FTX, many participants believed token transfers should be suspended until market conditions improved.
In response, a second proposal passed, outlining five milestones the DAO should meet before SAFE tokens would become transferable — ending the SAFE claim period, ratifying a constitution and then a governance framework, voting on how funds should be spent and deciding on the token’s utility.
Read more: Safe social recovery eases private key management
Fifteen months later, SafeDAO has finally ticked off all five of the milestones, and a Snapshot vote is slated to go live that would make SAFE transferable.
Luuk Weber, a SafeDAO delegate with experience in multiple DAOs dating back to 2019, called SafeDAO’s milestone system the “most structured approach I’ve seen in any DAO when it comes to aligning on operating logic prior to token transferability.”
“A lot of work has gone into these milestones from a lot of people, there was really heavy lifting from all parts, I think there’s genuinely a very positive sentiment to the progress that has been made, and the progress Safe has made with the product,” Geest said.
Outside of the DAO, Safe has continued its development of smart accounts that make use of tools like account abstraction to let users create wallets with only an email. Worldcoin uses Safe to create wallets for its users inside of the World App.
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