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How to DAO: Building Confidential Web3 Communities with Oasis

Decentralized Autonomous Organizations (DAOs) play a pivotal role in reshaping online interaction between peers. Paired with many fun and entertaining elements, these crypto-native communities also shoulder a critical responsibility to manage decentralized decision-making, safeguard sensitive information, and safeguard the confidentiality of participants. In short, any effort to foster secure and inclusive digital communities starts with better privacy.

The Oasis Network can provide the privacy measures that are imperative for the sustained growth and success of any DAO. This article explores the specific mechanics of DAOs that require privacy, what Oasis offers to DAOs and how DAO operators can get started with Oasis.

DAOs Need Better Privacy

Transparency is often touted as a virtue in the blockchain ecosystem. But every mainstream financial and social network and application offers some form of privacy assurances and user-facing secrecy filters to limit what information is made public. For transparency-by-default blockchains, this challenge is central to their ability to scale, attract mainstream users, and become dominant Internet ecosystems. Especially for DAOs, managing the social, financial, and political activities of any given Web3 community is essential.

All forms of voting and governance have historically demanded a degree of privacy. Confidentiality for these processes are important to ensure fairness and unbiased participation. But the default transparency of onchain activity (e.g., voting) on Ethereum, Solana, and other blockchains exposes sensitive voting information. Not only could this exposed data threaten voter identities, addresses, and other onchain information, but it could sway voter bias during an ongoing voting process.

Fostering honest and authentic governance practices starts with shielding participants from transparency-by-default networks and avoiding distorted elections from the influence of personal onchain data.

Getting Started with Oasis Smart Privacy

The Oasis Network’s Sapphire runtime offers complete EVM-compatible confidentiality for any DAO that wants end-to-end encryption for financial transactions, community voting, or other group activities.

  • Sapphire’s Confidential Calls feature supports traditional and encrypted EVM calls.
  • Sapphire’s immutable contracts offer the choice of opting out of varying privacy levels for each smart contract.
  • Oasis provides a comprehensive toolkit for transaction encryption or decryption and onchain message signing and verification
  • Sapphire’s smart privacy approach gives developers customizability for their preferred privacy levels.

The Sapphire runtime on Oasis, moreover, is the only confidential EVM fully in production today, which has been battle tested by tens of millions of public and confidential transactions. Here’s an overview of the Oasis integration process.

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Starting the process of integrating Oasis privacy into a DAO can be achieved in a few steps using production-ready tools that are available now in the Oasis Network ecosystem.

The project takes its first real step with Hard Hat, a tool that’s compatible with versions up to 2.12.7. The foundation of the project requires three dependencies:

  • “Sapphire smart contracts” for the core functionalities
  • “Open Zeppelin contracts” for additional features
  • “Sapphire hard hat plugin” to make sure everything meshes

Deployment starts with initializing the Hard Hat node and then deploying the contracts locally with special attention being given to the addresses of the Ballot Box and the DAO, as these are key for inter-contract communication. The Ballot Box is deployed first for verification purposes, followed by the DAO Contract on the BSC. Watch for any adjustments, such as tweaking the gas settings, to ensure a smooth deployment.

Next, a developer’s attention shifts to compiling and deploying these contracts using Hard Hat. This process involves fine-tuning the configurations and setting up the necessary deployment tasks. Before going live, testing and debugging in a local setup is encouraged and even necessary to observe and rectify any errors during the voting process and the subsequent closing of proposals.

Integrating Oasis Privacy on Other Blockchains

Most functional DAOs are not currently running on the Oasis Network, and migrating an established community to a new network presents massive logistical challenges and inconveniences. The good news is the Oasis Network has a robust cross-chain framework for seamlessly integrating Oasis confidentiality without switching networks.

The Oasis Privacy Layer (OPL) was launched in Summer 2023 to bring access to the privacy features of the Sapphire runtime to DAOs or any other Web3 dApp built on any EVM network. On the surface, OPL is a framework of a few hundred lines of code that acts as a gateway to better privacy. In short, a DAO that integrates OPL can stay on their home blockchain while leveraging the advanced confidentiality features of Sapphire, such as encrypted contract states and secret transactions.

The Future of DAO Privacy

Adding Oasis privacy to any DAO is a massive step toward democratizing, modernizing, and protecting DAO governance and other community activities. In fact, the future of DAOs is directly linked to the widespread adoption of onchain privacy. Good governance in DAOs is not just about transparency and community involvement — it requires protecting sensitive information and ensuring that decision-making processes are free from external influences. Oasis will drive the future of DAOs toward a future of strong confidentiality through Smart Privacy.