Mode became the first L2 to introduce vote escrow (ve) and gauge-based governance to its ecosystem—modernizing a long-standing governance model implemented by successful DeFi protocols. In Season 3, the Governance Games incentivized community members to stake tokens for increased voting power, directing rewards to protocols via gauges. The results are exciting:

• 43% of circulating supply staked
• 7.6K+ unique voters participated
• 31K+ votes cast via gauges

Here's how Mode addressed persistent challenges in L2 governance to achieve high participation rates: The Challenge Token-based delegate voting—a common onchain governance model for L2s—faces significant challenges:

• Misaligned incentives: Delegates often lead governance decisions but may not have sufficient “skin in the game,” creating potential conflicts with builders and token holders.
• Coordination overhead: Meeting quorum and approval thresholds demands frequent, time-consuming votes across numerous proposals.
• Low participation: Voter fatigue leads most token holders and many delegates to disengage, leading to low participation rates, failed proposals, and lack of accountability.

These issues reduce the effectiveness of governance decisions and discourage broad community participation, undermining alignment between stakeholders. The Solution To address the challenges of traditional onchain governance, Mode introduced a modernized ve and gauge-based governance model—drawing inspiration from DeFi governance, lessons from past Seasons, and working alongside experts from Aragon, Balancer, and Aura.At the core of this model: community members stake tokens to gain voting power (represented as veTokens), which they can allocate to gauges. Gauges determine how rewards are distributed across protocols in the network. This design removes the need for continuous voting while offering voters flexibility to reallocate their power each epoch.Mode’s implementation incorporated unique features to adapt the governance model to the needs of their community:

• Flexible Voting with Linear Curve: Voting power increases linearly the longer tokens are staked. However, there are no mandatory lockups—token holders can stake or unstake anytime, subject to warm-up and cool-down periods.
• Dual Token Staking: Both MODE and BPT (Balancer’s 80/20 MODE-ETH pool tokens) can be staked. This unlocks dual governance incentives, enabling dynamic voting power for multiple stakeholder groups.
• Protocol-Centric Rewards: Instead of directing rewards to liquidity pools, stakers allocate voting power to protocols via gauges, incentivizing ecosystem growth.
• Governance Hub: A streamlined hub where community members can stake, vote, and claim rewards simplifies the governance process for all participants.

The incentives for both veMODE and protocols adapt from season to season, keeping governance responsive and adaptable to ecosystem and market dynamics. Under the Hood Mode built its governance on Aragon OSx, a modular DAO framework enabling secure and customizable governance solutions.ve Contract LibraryTo simplify otherwise complex implementations of ve governance, the Aragon team built a modularized ve contract library, allowing Mode to customize key parameters efficiently and safely, without needing to draw on resources from their development team. The architecture includes a core contract that acts as the controller, managing the main staking and unstaking logic while connecting to sub-contracts that handle specific components: 

• NFT Logic: Each stake is represented as an NFT.
• Curve Logic: Manages linear or dynamic escrow logic in Solidity.
• Clock Logic: Defines epochs, checkpoints, and timing mechanisms.
• Queue Logic: Oversees exit queues and conditions.
• Voting Logic: Connects ve tokens to governance mechanisms.

Gauges Governance PluginMode used Aragon OSx’s plugin architecture to deploy its gauge-based governance system. The plugin enables veToken holders to allocate their voting power to a predetermined list of gauges, setting a percentage of their voting power to direct rewards to protocols. Once voting power is allocated, there’s no need for repetitive votes—holders simply reallocate as needed at the start of each epoch.The modularity of Aragon OSx allows Mode to adapt with learnings. Plugins can be installed, updated, or removed as the community and ecosystem evolve. This flexibility is critical for Mode’s seasonal governance, where learnings from one season shape the next.  Your DAO, Your Rules Aragon OSx empowers governance innovation with a secure, modular framework. By modularizing ve contracts, Aragon makes it simple for projects to customize governance models to fit their ecosystems and communities.Want to implement a custom ve model for your project? Reach out here.

We’re excited to announce the decentralization and security-focused onchain governance design of the Taiko DAO. This milestone marks a significant step forward in Taiko’s governance roadmap to fully decentralized protocol governance.TLDR: 

• Optimistic governance model, where token holders have onchain veto rights;
• Security Council that can efficiently and securely propose protocol upgrades;
• Multi-threshold protocol upgrades, with standard and emergency proposal paths; 
• Encrypted emergency proposals;
• Token holders can delegate their veto power; 
• Consolidated governance process in the Taiko Governance Hub. 

Taiko is an Ethereum-equivalent zkEVM based rollup that is open, permissionless, and requires no additional trust assumptions, as security is derived from Ethereum validators. Vitalik proposed the first block on Taiko Mainnet and has endorsed it for its advancements in decentralization for L2s. What Makes Taiko’s Governance Unique  Taiko is deeply committed to Ethereum’s core values, such as decentralization, permissionlessness, and trust minimization. This not only applies to the unique technical architecture of their rollup, but also their commitment to giving the community onchain rights in the protocol upgrade process. Optimistic GovernanceTaiko is using optimistic governance which enables a streamlined decision-making process that balances efficiency with community checks and balances. This design allows the Security Council to pass proposals, while giving token holders onchain veto rights. This means token holders can veto a malicious proposal and/or have the opportunity to exit. If a proposal doesn’t accumulate enough votes by the end of the veto period, it is automatically executed after an additional 7-day timelock. Giving token holders onchain veto rights and an opportunity to exit serves as both checks and balances and an additional security layer. It also combats voter fatigue, as voters only need to participate when a veto is needed.Multi-Threshold MultisigIn addition, Taiko is incorporating the multi-threshold protocol upgrades inspired by Polygon. This gives the Security Council two tracks to implement protocol upgrades:Standard Proposal The standard proposal flow is the typical pathway for most upgrades and ensures that the Taiko community can directly engage in the governance process onchain. The process includes:

• An 8-member Security Council (to be announced) composed of internal and external members who create and approve proposals.
• 3 out of 8 approvals from the Security Council are required for a standard proposal to pass.
• A community review period where token holders and delegates have the ability to veto proposals.
• Any proposal that does not meet the veto threshold by the end of the review period is automatically executed after a 7-day timelock, giving token holders the opportunity to exit if needed. 

Emergency Supermajority with Encrypted ProposalsWhen a critical situation arises (e.g., a major protocol vulnerability), the Security Council has an emergency process for proposals to be expedited to protect the Taiko protocol and the community. Here’s how it works:

• Just like in the standard proposal flow, any Security Council member can submit an emergency proposal.
• The contents of an emergency proposal are encrypted to prevent exploitation prior to implementation.
• The approval threshold is higher for emergency proposals, requiring a supermajority from 6 of the 8 Council members to pass.
• There is no review and veto for token holders during the emergency proposal process, since the proposals are encrypted for security reasons.
• Finally, the proposal contents will be decrypted and made public to maintain accountability and transparency when executed.

Taiko Governance Hub  0:00 /0:27 1× The Taiko Security Council and community can participate in the governance process on the Taiko Governance Hub. For the Security Council, both standard and emergency proposals can be submitted via the Governance Hub. Token holders can either delegate their veto power or veto directly in the Hub as well. The Governance Hub is custom branded for the Taiko community and will evolve with Taiko’s governance.  Next Steps The Taiko DAO is live on the Hekla testnet for rigorous testing. With a genuine binding onchain governance system in place, voters will be able to directly influence the development of Taiko’s infrastructure. Feedback is welcomed prior to mainnet deployment. The best way to get involved in the discussion is to join Taiko’s Discord server.The Taiko DAO is built to meet L2Beat’s Stage 1 criteria when launching on mainnet. Aragon’s governance solutions are ideal for L2s looking to become more decentralized, while balancing security considerations, and meeting industry best practices. Whatever solution your DAO requires, building with Aragon OSx means that your governance systems can continue to evolve without compromising on security or reliability. To learn more about how we can help, reach out.

“May your DAO live forever” - King Leonidas
But did it really live at all?There is no use in making DAOs unstoppable if they stop organizations from being effective. Although some projects, like Lido and Aave, have navigated these challenges with strong leadership, the majority hit headwinds as soon as they launch a token and start truly decentralizing. Many projects avoid becoming DAOs altogether, while others become DAOs in name only, keeping centralized control over their protocols and assets.The core issues at a technological level lie in inflexible legacy tooling that forces tradeoffs in velocity for decentralization. DAOs have been tied to a rigid vanilla delegate token-based voting model, with few ways to adapt governance to their needs. But every organization is different, and their governance must evolve over time to reach their goals.To overcome these challenges, a new approach is underway, and 2025 will be the year of DAOs 2.0: a new paradigm unleashing the full potential of DAOs to be effective while actually increasing decentralization and autonomy.

The main three areas driving this new era for DAOs:

1. Context-based governance
2. Automation & AI
3. Tokenomic-driven

Context-Based GovernanceLike players moving chess pieces on a board, organizations need to constantly move their resources, stakeholders, and activities to reach their goals. Each decision has unique considerations.Monolithic frameworks have been limiting governance to a single governance model: token-based voting. But there’s a world of options beyond one-size-fits-all governance. Modular governance tooling allows organizations to tailor processes within a single onchain deployment. Instead of making every decision with a referendum, a wide range of governance methodologies can be implemented within a single organization. Decisions can pass through multiple stages before execution, such as optimistic proposals with a veto and multi-threshold approvals by trusted bodies.Effective decision-making requires input from people with context, expertise, and skin in the game. Modular tooling empowers organizations to involve the right stakeholders at the right stages of the decision-making process. The end result is better and faster decision making with proper checks and balances.Automation & AIDAOs need to reduce governance and operational overhead to succeed. DAOs were meant to center automation and push humans to the edges.But DAOs bound to a single governance model have relied too heavily on humans to bridge the gaps, whether to build consensus before a proposal or to intervene when things go wrong. Ironically, many critiques of DAOs stem from excessive reliance on human intervention in token voting—politicking, popularity contests, conflicts of interest, and errors.The need for extensive discussion amongst humans to pass a wide range of proposals has hampered effective decision making. The current incentives are designed for humans in positions of power to avoid including automation. But by segmenting decisions into specific and narrow processes, organizations can reduce the need for interdependencies and nuance, making decisions more straightforward with clear tradeoffs.With narrower inputs, it’s not only easier for humans to make decisions, but to integrate automation into decision-making. Thresholds and triggers can advance, pause, or block processes with minimal human involvement.AI agents can supercharge this automation. By introducing AI at appropriate decision-making stages, DAOs can leverage their ability to process data and identify optimal outcomes. While AI is unlikely to replace human governance entirely at this stage, narrowing the scope of decisions makes AI a practical and valuable tool to reduce governance overhead and maximize efficiency.The more automated the process, the less overhead DAOs face. Automation reduces the cognitive and resource load on humans, minimizes errors, and moves risk away from human actors. Automated workflows can adapt over time as conditions change—or become immutable as they ossify. The end result is DAOs that are more efficient, secure, all the while becoming more autonomous and thus resilient.Tokenomic-DrivenTokens give onchain organizations a huge and relatively untapped competitive advantage over traditional ones. Yet, most governance tokens lack real onchain power over protocols or capital flows, creating a disconnect between governance and value accrual.Tokens and governance are intrinsically linked. Token distribution and liquidity affect governance dynamics, while governance decisions, in turn, determine how value is allocated and how it accrues to the token. When projects fail to consider these interdependencies, they risk misaligning incentives, discouraging participation, and stifling growth.By integrating tokenomics into their governance design, organisations reap the benefits of incentive alignment –meaningful participation, value accrual, and growth flywheels.Tokenomic mechanisms can help reward loyalty and participation:

• Token lockers with power over financial flows turns governance tokens into productive assets, improving value accrual and introducing liquidity sinks.
• Balancing the “carrot” of increased voting power over time with the “stick” of withdrawal delays improves loyalty and decreases principal-agent-problems of the delegate model.
• Rewarding participation and contributions to the network offsets both financial and human capital costs for those involved.

In the best-case scenario, sound tokenomics creates a positive feedback loop. Governance participation leads to rewards, which drive stronger engagement and better decisions. This, in turn, fosters ecosystem growth, enhancing the token’s value and creating a cycle of sustainable development.Governance must meet organizations where they are—not just where they aspire to be. The ability for DAOs to reach their current goals and adapt over time is what will make them unstoppable, future-proof, and most importantly effective.By adopting context-based governance, leveraging automation and AI, and integrating tokenomics into governance design, DAOs will transform into organizations more powerful and effective than their traditional counterparts. This is the direction we’ve been building towards and we look forward to DAOs 2.0 taking root in 2025.Let’s build DAOs that don’t just live forever – let’s build DAOs that succeed today.

Legacy DAO frameworks, and their UIs, are rigid. As DAOs adopt new governance models like optimistic voting and gauge-based systems, their interfaces need to evolve to support the smart contracts. But adapting UIs is often costly, time-consuming, and frustrating.That’s why we built the Governance UI Kit and App Template, giving designers and developers everything they need to quickly and efficiently build custom interfaces designed for modular governance that adapt and scale as DAOs evolve.

• Easy to use: Plug and play components and templates to get up and running
• Flexible & customizable: Adapts to any brand and governance design
• Optimized for governance: Seamless integration with Aragon OSx
• Open-source & sovereign: Free to use, with the option to self-host for complete control

The Governance UI Kit and App Template power Polygon, Taiko, Mode, and Puffer’s innovative governance models. Aragon OSx makes it safe and easy to customize governance contracts, and our UI tools make it just as fast and simple to create bespoke interfaces for community participation. Now, they’re open for any designer or developer to build their own Governance Hub.Governance UI KitA human-centered, open-source React library for seamless, transparent governance interfaces.

• Comprehensive library: A library of consistent ready-to-use UI components for a seamless user experience.
• Customizable branding: Swap out the design tokens to adapt themes to reflect your brand.
• Ethereum-friendly components: Follows best practices for web3 applications and common design patterns.
• Optimized for governance: Includes all of the common components designed by an expert team specializing in modular governance systems.

Designers can learn more in the docs or access the UI Kit on Figma to explore how it can be used to build an application for your unique use case.Governance App TemplateA lightweight, flexible UI host that lets DAOs build a custom UI in a fraction of the time. It empowers developers to focus on what matters, rather than just the tedious setup. Built with next.js and Wagmi, it’s ready to be self-hosted with Vercel in a single click. It also leverages commonly used libraries such as Reown’s AppKit for seamless wallet integrations.

• Fork and customize: Adapt the template with only the features your DAO needs.
• Lean & scalable: Connect additional infrastructure, such as caching systems or databases, as you scale. 
• Full sovereignty: Self-host for complete control over your governance stack.

The App Template is fully optimized for Aragon OSx primitives and pre-loaded with example governance plugins that are ready to install as is or forked and modified to your needs.Get StartedBuild a custom governance UI that truly fits your DAO.Explore the docs to get hands-on with the Governance UI Kit and App Template–or connect with our custom services team for end-to-end governance solutions.

Many governance tokens lack real onchain power over protocols and their capital flows. Even when a protocol generates value, it often doesn’t accrue to the token, leaving holders with little reason to stay engaged.If you’re building a protocol, you’ve probably seen this firsthand—governance becomes political and extractive and community engagement fades.But it doesn’t need to be this way. By connecting governance, incentives, and value accrual, you can build a system that supports long-term growth and sustainability. Aligning Governance and Tokenomics Governance and tokenomics work together—your token’s design affects governance dynamics, while governance decisions determine how resources are allocated, how value is created, and how it eventually accrues to the token. Protocols that embed economic incentives into governance see stronger ecosystems where token holders actively contribute because they directly benefit from participation—whether through rewards, influence, or revenue sharing. Captial Flows The Lifeblood of Protocols Liquidity is essential to your protocol. It fuels economic activity, attracts developers, and improves the user experience. But liquidity alone isn’t enough—it must be effectively directed to grow the protocol and its token economy.Governance should play a role in attracting and retaining liquidity, helping your protocol mature to a stage where it can turn on revenue mechanisms. Once the fee switch is activated, governance can use the same infrastructure to direct revenue flows, turning governance into a growth flywheel.The Value Accrual Framework: Closing the Loop with GovernanceTo help protocols create positive feedback loops between governance and value accrual, we developed governance primitives that reinforce value accrual to the governance token. How It Works

• Token holders stake the native token to access governance rights, reducing circulating supply and sell pressure.
• Governance controls emissions and incentives, creating tangible token utility and attracting new demand from protocols that want to direct incentives.
• Improved token fundamentals lead to more predictable incentives, attracting sustainable TVL.
• Sustainable TVL enhances user experience and fuels protocol growth, further reinforcing token fundamentals.
• As growth stabilizes, the opportunity cost of unstaking increases, keeping supply out of circulation.

In the best case scenario, well-designed governance tokenomics turn incentive alignment into sustainable growth. This flywheel drives both network growth and value accrual, making governance tokens an integral part of long-term success. Governance Primitives for Value Accrual DeFi governance has undergone years of iteration. Drawing from these best practices, we built tokenomics-first governance primitives on Aragon OSx to help protocols design sustainable incentive structures.Vote Lock (vl)Governance: A modular contract library that enables customizable vote lockers, allowing protocols to fine-tune their governance and economic incentives.Gauges Governance: A governance plugin that lets token holders allocate voting power to predefined options at set intervals, simplifying decisions and clarifying tradeoffs. It clears a feasible path to optimizing and automating the distribution of emissions, incentives, and protocol revenue.These primitives can be used separately or in combination to create governance models that reinforce growth and value accrual. Benefits include:

• Rewarding long-term participation and discouraging mercenary behavior;
• Returning decision-making power to those with real economic stake;
• Encouraging deeper voter participation and community engagement;
• Managing token supply dynamics to support protocol health;
• Providing concrete governance utility by giving token holders control over financial flows from day one.

Bringing It All Together Governance isn’t just about voting—it’s about designing economic systems that sustain participation, align incentives, and drive real value to token holders. With the right mechanism design, you can move beyond governance as a passive obligation and turn it into a tool for protocol growth.We’ve been working with projects like Mode and Puffer to build governance models that support liquidity, network growth, and value accrual –reach out to learn more about our services.

The future of DePIN governance is decentralized. Now, you can launch your DAO on peaq, the layer-1 powering the Machine Economy, with the modular Aragon OSx protocol, and soon on the next version of the Aragon App. We’re thrilled to announce that Aragon DAOs are now deployable on peaq, home to the world’s largest and fastest-growing DePIN ecosystem. As an L1, peaq powers a global infrastructure revolution; providing decentralized, borderless, and community-governed digital infrastructure for real-world applications. What's peaq Think of peaq as a global computer designed for decentralized, community-owned applications and machines. It fosters an environment where communities build and govern infrastructure collectively, ensuring that ownership and value creation remain in the hands of the people who use it.At Aragon, we share peaq’s vision for decentralized infrastructure and onchain governance. To decentralize the ownership of machines, we must first decentralize governance itself. That’s where Aragon’s tech stack comes in, offering flexible, accessible, and secure onchain governance tools for builders and users in the DePIN ecosystem. Why Deploy an Aragon DAO on peaq? Aside from it being the biggest DePIN ecosystem, it also has a number of core advantages: 

• Highly decentralized: With a Nakamoto coefficient above 130, peaq ensures robust decentralization.
• 10,000+ Transactions Per Second (TPS): Scalable to 500,000 TPS by 2025.
• Minimal transaction fees: As low as $0.00025 per transaction.
• Environmentally friendly: Built on energy-efficient blockchain technology.
• EVM compatibility:  Deploy smart contracts in Solidity for EVM and inherit all the benefits of Ethereum.

Aragon OSx on peaq is a powerful combination. OSx has the modularity that is needed for DAOs to swap out plugins easily, making it easier to adapt your organization. With scalability and modularity combined, decentralizing DePIN DAOs can get much closer to reality. peaq Use Cases Machines are transforming industries across land, sea, sky, and space. Here are some interesting use cases DAOs can build on peaq:

• DAO-Governed Robo-Farms: Decentralized agricultural operations for transparent, community-led decision-making.
• Autonomous Taxis: Community-owned and governed self-driving taxis.
• Decentralized Energy Markets: AI-driven solar panels, chargers, and smart devices trading energy transparently.
• Machine Crowdfunding: Pool funds to invest in next-gen machine projects and earn stakes.
• Decentralized Insurance: Community-driven insurance models distributing risk fairly and transparently.

Read more about their use cases here.Get Started: Launch Your Aragon DAO on peaqReady to build? Explore Aragon OSx to set up your DAO seamlessly on peaq.Need expert guidance? Reach out to our custom services team.  

Organizations have created immense value for humanity. They embolden innovators to pool resources and take risks to drive society into new territory.Onchain organizations have the potential to take this even further. Built on globally distributed, censorship-resistant, and unstoppable infrastructure, they can create, accrue, and distribute value faster than ever before—and at a global scale—all while circumventing intermediaries that gatekeep opportunities and block progress.But so far, onchain organizations haven’t lived up to this potential. Most have been held back by rigid, ideological governance models that make it hard to create economic value and even harder to accrue it back to stakeholders. Many DAOs have struggled with extractive politics, runaway bureaucracy, unchecked spending, and a lack of accountability. Instead of helping organizations reach their goals, poor governance brought upon by inflexible infrastructure has gotten in the way.It’s time for the next generation of onchain organizations. One that returns to the core purpose of empowering innovators to create, accrue, and share value—where governance works for builders, not against them, and where token holders have real ownership over assets and value flows. 0:00 /0:46 1× We’re enabling this next generation of onchain organizations by focusing on two key areas:

• Value Creation: To succeed, teams need to move fast without getting bogged down by politics and bureaucracy. At the same time, they must be held accountable to their mission and stakeholders.
• Value Distribution: As a measure of success, value must accrue so that it can be distributed fairly among stakeholders with skin in the game. Those who take risks to support innovation should be rewarded, with clear mechanisms to participate in and benefit from value accrual. 

Deploy a modular onchain organization to reach your goals Now, organizations can deploy custom governance processes onchain using the Aragon app. Governance should enable execution, not slow it down. Teams need autonomy to move fast, but with proper safeguards. Tailored decision flows reduce friction by empowering the right stakeholders, balance autonomy and accountability, and reduce governance overhead. Instead of forcing organizations into a single governance model, governance can now be designed to fit the unique structure and needs of each organization. What you can do with modular governance in the Aragon app

• Launch custom governance designs that align with your structure, operations, and stakeholders—all in one deployment.
• Include as many different proposal types as needed, each tailored to specific actions (ex. protocol upgrades, treasury management, grants). 
• Design custom multi-stage proposal flows for each proposal type.
• Configure stages to require governance approval or pass optimistically unless vetoed.
• Flexibly add timelocks before, after, or during governance processes to give DAO members time to react.
• Empower all of your stakeholders as “governing bodies” by granting them specific permissions based on their role or expertise. 

Organizations have been forced to choose between one-size-fits-all token voting and complex deployments that require costly custom contracts, audits, and ongoing maintenance. Now, they can deploy bespoke and adaptable governance models without the high up front and maintenance costs. Most importantly, they are no longer locked into outdated, ineffective governance models that have caused many projects to fail. Secure onchain deployments: no need to customize or audit smart contracts Aragon OSx, our modular DAO framework, powers custom onchain governance. Now, builders can leverage modular components to design tailored governance systems directly from our no-code app.Why this matters

• Leverage existing components. Deploy complex governance without rebuilding from scratch or writing custom smart contracts.
• Lower costs & security risks. Customizing and auditing smart contracts can be expensive and risky. Composable building blocks eliminate that burden.
• No more software spaghetti. Consolidate governance in a single transparent interface.
• No-code governance design. Anyone on your team can design, implement, and manage your governance without having a dedicated smart contract developer.
• Shared network effects. The entire ecosystem benefits from sharing modular building blocks, with the potential to replicate successful governance models. 
• Adapt your DAO. Evolve governance over time, adding, removing, or modifying processes as your organization matures.

How it works

1. Deploy a DAO.
2. Add a new governance process: 
   1. Enter the process metadata; 
   2. Add stages; 
   3. Add a governing body to each stage.
3. Repeat to add as many processes as needed.
4. Once your governance design is set, remove admin permissions from yourself by passing a proposal, ensuring that your governance is working correctly.
5. Your onchain organization is ready!

The Aragon app is available no-code on Ethereum, Polygon, Base, Zksync, Arbitrum and soon with Optimism, Celo, and peaq. Modular governance enables pragmatic decentralization Governing organizations onchain enables real ownership and direct accountability. Every decision and transaction is immutable and verifiable. Token holders can be given control over critical decisions, giving encoded protections where it matters most. This reduces the need for offchain intermediaries, enforcement, and remedies. Working towards these ideals, governance needs to be pragmatic and adaptable. It should evolve with your organization, allowing you to add, remove, or modify governance processes as you scale and change. Projects can start with more centralized decision-making and gradually transition power to decentralized stakeholders as they mature—ensuring a secure and sustainable path to decentralization.Here are a few ways a modular onchain organization can help you reach your decentralization goals, while remaining effective:Optimistic GovernanceOptimistic governance allows teams to move fast while remaining decentralized, by enabling proposals to pass automatically unless vetoed. This reduces governance fatigue while ensuring token holders retain ultimate control through structured safeguards. Organizations can now deploy optimistic governance out of the box, setting flexible timelocks so stakeholders can review, veto, or exit before execution.Security CouncilsSecurity councils provide oversight to safeguard protocols, treasuries, and governance processes. As power decentralizes, councils ensure critical interventions can be made when needed, preventing governance attacks or misaligned actions. Organizations can now deploy councils in a single interface, assign roles, and configure structured approvals as concurrent (parallel sign-offs) or sequential (staged reviews).Emergency ProposalsProcesses can be segmented by different transaction types, ensuring a critical path to address urgent vulnerabilities. Routine decisions can follow the regular proposal flow, while emergency decisions can be fast-tracked requiring a higher approval threshold. Organizations can now segment different processes, ensuring that governance scales in proportion to risk and impact.Legal Structures Legal structures help DAOs align onchain governance with compliance and business operations. Bridging legal entities with onchain decision-making ensures greater transparency and automation. Organizations can now mirror legal structures onchain, integrating compliance mechanisms directly into onchain governance workflows.Resource allocationInstead of navigating forum politics, teams and tokenholders can coordinate around resource allocation through segregated structured processes or even deploy custom resource allocation infrastructure like voting gauges. This allows the DAO to exercise financial discipline and ensure sustainability through long term spending caps. Furthermore, such infrastructure provides guardrails contextualizing the constrained nature of shared resources ensuring alignment around making allocation trade-offs (i.e. spending more on one initiative means spending less on another).  What's Next With its modular architecture, our governance stack is built to scale and evolve with the industry.New features will be continuously integrated into the app, including:

• Universal token voting
• Crosschain governance
• Gasless transactions
• Gauge-based voting 
• Council elections

Design and deploy your modular onchain organization in the Aragon app today.Need help? Our governance support team is here to guide you.

Onchain organizations have proven their ability to attract resources at extraordinary speed and scale, creating the potential for unprecedented value creation. Realizing that potential depends on the ability to sustainably align stakeholder incentives.Most have fallen short. Onchain organizations have been relying on systems where decision-making is decoupled from economic incentive alignment, exacerbating principal-agent problems and pushing participants to seek economic upside outside of the native token—extracting value from the protocol instead of growing it. In addition, relying on a single referendum voting funnel for all governance has resulted in political battles, popularity contests, and failure to incentivize the very people actively building and sustaining protocols. Without mechanisms that link decision-making, economic incentives, and value accrual, governance becomes overly bureaucratic and misaligned with the protocol’s goals.The Value Accrual Toolkit, built on Aragon OSx, offers a new approach. It provides protocols with a set of modular tokenomic primitives designed to align incentives, optimize resource allocation, and channel value back to the native token. It transforms governance into a tokenomic flywheel, driving sustainable value creation and accrual through effective tools for native token liquidity management and structured capital allocation, all while minimizing governance overhead.The Value Accrual Toolkit introduces two main tokenomic primitives:

• Vote Escrow (veLocker): Encourages long-term commitment by allowing users to lock tokens for increased voting power, throttling exit, creating a native token liquidity sink, and directly tying governance weight to economic commitment.
• Gauges: Provides a structured, low-overhead approach to resource allocation, ensuring capital is efficiently allocated across protocol-aligned funding initiatives.

This toolkit builds on the rich history of DeFi governance mechanisms, drawing from the learnings of pioneering projects such as Curve, Solidly, Velodrome, and Aerodrome. We have iterated on the foundational work of these teams and collaborated with innovators at Balancer and Charged Particles to deliver implementations for leaders like Mode, Puffer, and Bedrock. The resulting contracts are generalized, battle-tested, adaptable, and fork-friendly, empowering anyone in the EVM space to upgrade their tokenomics. Tokenomic Primitives: veLocker and Gauges The Value Accrual Toolkit provides developers with a modular contract library and fork-friendly codebase. Its components can be integrated individually or as part of a comprehensive governance model depending on the protocol’s specific requirements.The toolkit’s modular design ensures it remains flexible and future-proof, capable of supporting protocols at all growth stages. It provides a structured upgrade path that allows projects to adapt to market dynamics and iterate safely.Aragon’s system was built from the ground up to be:

• Modular & Customizable: Each component (escrow, voting, rewards) is separate and configurable, allowing protocols to tailor tokenomic mechanisms to their needs.
• Production-Ready: The toolkit is currently in use by leading projects such as Mode, Puffer, and Bedrock.
• Out-of-the-Box: Includes ready-to-fork frontends and integrations for features like bribes, emissions, and rewards distribution, providing a seamless developer experience.

veLocker The veLocker is a staking mechanism designed to align incentives by encouraging long-term commitment and rewarding governance participation. By locking native tokens within an escrow contract, users obtain governance tokens (veTokens) with optional transferability, which represent their voting power. Voting power can be multiplied with increased lock duration in order to strengthen alignment between governance power and economic commitment. This model creates a natural liquidity sink by reducing circulating supply through long-term token locking. It provides a robust mechanism for incentivizing sustained participation and aligning incentives between stakeholders and the protocol.How it works: 

• Locking & Escrow: Users deposit an ERC20 token into an escrow contract to mint veTokens. These veTokens can be implemented as a veNFT with optional transferability. Locking tokens triggers a warm-up period before voting power is activated, while unstaking initiates a configurable cool-off period.
• Voting Power Calculation: Voting power can be fixed or proportional to the lock duration through a multiplier parameter increasing up to a predefined ceiling. 
• Voting Influence: veToken holders use their voting power to participate in any decision-making processes on Aragon OSx, but typically direct incentive emissions or other capital flows through a gauge system towards specific asset pools or initiatives.
• Exit Queue (Optional): Protocols can define parameters such as cooldown periods, minimum lock durations, and early exit fees.

Gauges Gauges provide a structured system for capital distribution, streamlining the allocation of emissions, incentives, or protocol revenue based on voting power. By defining trade-offs and enabling programmable incentives, gauges replace ad-hoc discretionary spending with predictable, efficient, and accountable resource allocation. This streamlined process enhances transparency and consistency across the ecosystem and improves financial discipline through spending predictability and accountability.How it works:

• Governance Integration: Compatible with various governance systems, including standalone implementations or integration with veLocker systems.
• Gauge Categories: Protocols establish a set of whitelisted gauge destinations representing funding or emission targets. Common examples include:
  • Native Token Liquidity: Incentivise native token LP providers across DeFi.
  • Protocol Liquidity: Incentivise protocol usage for example minting/depositing or holding relevant assets, providing DEX liquidity, etc.
  • Network Validator Rewards: Distributes rewards to validators, nodes, or other protocol specific network contributions. 
• Voting & Allocation: veToken holders distribute their voting power across gauges (can vote for several options). The weight of each gauge determines the proportion of resources it receives. Voting occurs on an epoch cadence (epoch duration is a parameter) for consistent and predictable emissions. Once a token holder votes, their choice persists until their balance or preferences change.

Extendable Functionality The Value Accrual Toolkit is designed for modularity and extensibility, allowing protocols to build customized tokenomic systems. While veLocker and Gauges are the core primitives, we continuously empower clients to push the boundaries of tokenomic designs and offer a growing library of modules to extend functionality. New modules or partnership integrations can be introduced to enhance the system’s flexibility and efficiency.The following are examples of extended functionalities that can be integrated:

• Conditional & Guardrailed Gauges: Gauges with min/max funding level safeguards to prevent overfunding or underfunding, ensuring capital allocation within acceptable boundaries.
• KPI-Based Payouts: Introduces performance-driven rewards by linking payouts to measurable targets such as TVL growth, liquidity provision, user activity, or ecosystem integration. Automates or modifies emissions based on predefined goals.
• Progressive Exit Tax: Applies a fee when tokens are unstaked before a specified period, and redistributes collected fees to remaining stakers or protocol reserves. Fees can remain constant or decrease over time as the unlock period expires.
• Offchain Incentive Distribution: Integrates with external offchain reward distribution systems like Merkl, allowing protocols to include offchain actions in the incentive structure and include further customization logic (i.e. white/blacklist addresses).
• Bribe Markets: Establishes a marketplace like Hidden Hand where external projects can offer incentives (bribes) to veToken holders to direct votes toward specific gauges. 
• Autocompounders & Relayers: Introduces automated systems that maximize yield for governance tokens through auto-compounding or delegation.
  • Skin-in-the-Game Systems: Track user interactions and direct incentives towards pools or initiatives they actively participate in.
  • Yield Maximization: Continuously harvests rewards, converts them to native tokens, and restakes to increase overall yield.
  • Delegated Participation: Ensures staked tokens are actively participating in governance even when users are inactive.
• Automation and AI: Clearly defined resource constraints and structured alternatives set makes Aragon's gauge system easy to automate.
• Analytics & Optimization Tools: Provides insights into gauge performance, voting patterns, and emission efficiency, enabling protocols to iterate over time. 
• Fractional Gauges: Incentives from high level gauges can flow into smaller, purpose-specific sub-gauges where further fine tuning of targeted incentivisation can occur. This allows protocols to implement complex, multi-layered tokenomics structures while maintaining coherence.

The Value Accrual Toolkit provides a powerful foundation for protocols looking to implement highly customizable and effective tokenomic systems. Whether through direct integrations or partnership modules, protocols can leverage new capabilities to align incentives, optimize resource allocation, and grow their ecosystems sustainably. Governance UI Kit Our vote escrow and gauges contracts are compatible with our Governance UI Kit, a lightweight, flexible UI host built with next.js and Wagmi. The App Template is fully optimized for Aragon OSx primitives, and implementations custom built for veLocker and gauges are easy to fork and modify to your needs.Work with usYou can learn more about our veLocker and Gauges contracts and UIs in the docs. Need help? Reach out to our tokenomics solutions team.

In the evolving world of onchain ownership, one of the most persistent challenges for decentralized organizations is incentive alignment, ensuring that builders, token holders, and core teams are working toward shared outcomes.

At Aragon, we’ve spent years at the infrastructure layer, witnessing first-hand how organizations often becomes bogged down by misaligned motivations, unclear constraints, and disorganized spending.With the Value Accrual Toolkit, used by projects like Mode and Puffer, we’ve introduced a powerful suite of modularized tokenomic primitives designed to help onchain organizations align incentives at every layer, from governance, to treasury management, to liquidity growth.In this piece, we’ll highlight two critical features of the toolkit: a gauge-based budgeting framework and Locker infrastructure for liquidity flywheels.In traditional onchain organization structures, key decisions about treasury allocation and protocol development are often funneled through monolithic, politicized voting processes. With no clear division between strategic and operational decisions, governance becomes a bottleneck instead of a facilitator. Proposals stall. Funding becomes reactive. And token holders – disconnected from meaningful ownership – lack incentives to think long-term.This results in:

• Contributors chasing funding through inefficient grants or service agreements
• Misuse of shared resources due to lack of budget constraints
• Token holders delegating votes without oversight, often leading to unchecked spending

These patterns hinder protocol growth and weaken community alignment.One key to solving this lies in restructuring how we allocate capital. Instead of requiring majority consensus to pass proposals, effectively disempowering minority stakeholders, we introduced a gauge system that allows proportional control over shared resources. Own 1% of governance tokens? You can direct 1% of capital.This linear model enables more dynamic and continuous decision-making and gives every stakeholder a meaningful voice. Paired with structured initiative planning, separating what to fund from who executes, it reduces gridlock and encourages more thoughtful budgeting.Learn more about how the gauge system works in the full Value Accrual Toolkit breakdown.A significant portion of decisions for decentralized organizations revolve around resource allocation, yet processes are often heavily politicized, slowing execution, limiting meaningful ecosystem engagement, and stifling growth. Much of the focus is placed on delegation processes and voting coordination, rather than on the outcomes of proposals and initiatives.Locker-based infrastructure fixes this by connecting governance weight directly to long-term economic commitments. Through veLockers, stakeholders are enabled to lock tokens for increased governance power, allowing incentives to be directed strategically toward liquidity, integrations, and other growth priorities.By introducing structure to resource allocation, a sustainable flywheel can be bootstrapped:

• Locked token holders allocate incentives toward strategic growth targets.
• Liquidity improves, enhancing user experience and adoption.
• Network effects strengthen, boosting integrations and partnerships.
• Market sentiment improves, lowering the cost of incentivization.
• Protocols spend incentives more efficiently, leading to sustainable revenue outpacing emissions

Once the flywheel is established, protocol revenue can meaningfully outweigh the incentives spent, building a more sustainable and capital-efficient growth model.Embedding structure into incentive design enables protocols to align stakeholders, concentrate capital toward meaningful outcomes, and prevent value from leaking out of the system.Dive deeper into how veLockers create sustainable protocol growth in the Toolkit’s official launch post.What unites both of these components of the Toolkit is a shared philosophy: build infrastructure that enhances agency and alignment.Whether you're managing a treasury, designing incentive mechanisms for your protocol, or trying to activate your community, the Value Accrual Toolkit offers a modular foundation to do so intentionally and transparently.We’re seeing more and more projects leverage this system to move beyond fragmented governance into truly strategic execution. If you’re building onchain and want to unlock smarter, scalable value capture, check out the Value Accrual Toolkit to learn about the full product’s offerings, or reach out to our team.

For many onchain organizations, governance and value creation have historically existed in parallel, but not in sync. Token holders vote, yes, but does that governance translate into sustainable growth, aligned incentives, or capital efficiency?Not always.Aragon’s veLocker + Gauge primitives, part of the Value Accrual Toolkit, are designed to close that gap. They don’t just make onchain organizations more democratic, they make them more productive. By combining commitment-based voting with incentive-directed capital allocation, Aragon transforms governance and onchain management from a decision-making layer into a value-generating flywheel unlocking true onchain ownership.veLockers: Commitment → Influence → Real Investment → Ecosystem GrowthA core product of the Value Accrual Toolkit is veLockers, a mechanism design that allows participants to lock tokens in exchange for time-weighted voting power, issued as veTokens.This creates three foundational outcomes:

• Incentive alignment: Voting power scales with time commitment, rewarding long-term conviction over short-term speculation
• Value accrual: Locked tokens reduce circulating supply & increases ecosystem participation
• Stronger governance infrastructure: Reduced opportunism, sybil-resistance, and predictable structure 

Instead of passive governance by transient holders or those with no skin in the game, veLockers encourage a more deliberate and aligned participant base, one that benefits directly from good governance outcomes.Gauges: Vote-Directed Incentives = Capital EfficiencyOnce veTokens are in hand, holders can use them to vote on Gauges, programmable mechanisms that determine where protocol emissions and resources go.This turns voting into an economic lever.

• Participants are incentivized to engage in governance, not just symbolically, but financially through vested financial interest and potential reward mechanisms.
• Projects and contributors are motivated to align with governance goals in order to earn emissions via gauge votes.
• The community becomes the allocator, replacing bureaucracy with market-driven signal.

The result is a feedback loop, where the most impactful, aligned initiatives receive the most funding, and thus contribute even more value to the protocol.The Value Accrual FlywheelWhen these two systems are combined, locking and voting, a powerful incentive loop emerges:

1. Token Locking
2. → veToken Issuance
3. → Gauge Voting
4. → Emissions to High-Impact Projects
5. → Ecosystem Growth & Protocol Usage
6. → Value Accrual
7. → Incentive to Lock Increases

This directly enables the fundamentals of onchain organization and tokenomics to become not a time-consuming, impractical cost center, but instead, an efficient growth engine designed to last. Not through speculation, but through programmable, incentive-aligned, and value-accruing coordination.The Bottom LineveLockers give participants skin in the game. Gauges let them decide where that skin goes to work. The outcome? Real investment for long-term value generation.Together, they make tokenomics not just a structure, but a strategy, a way for onchain organizations to align incentives, compound value, and scale with integrity.With Aragon, building your organization onchain isn’t a checkbox. It’s a catalyst.