Anchorage Digital opens up DeFi voting to custodial customers

Institutional clients of crypto custodian firm Anchorage Digital can now raise concerns about proposals for tokens they hold without paying hefty gas fees.

According to a May 16 statement, Anchorage will integrate off-chain, gasless multi-governance client Snapshot so that its “token-holding community users” can vote on governance proposals with their tokens, without paying gas fees.

Anchorage Digital is pleased to announce that customers can now participate in Snapshot voting using their Anchorage Digital address. Our WalletConnect integration enables:

+ Voting from qualified custody without money movements
+ Secure off-chain governance for… pic.twitter.com/VYZ5pIwyl1

— Anchorage Digital (@Anchorage) May 16, 2023

It said all voting will take place within Anchorage custody, with no money movement.

Snapshot is used by decentralized protocols such as AAVE (AAVE), Lido (LDO), and BitDAO. It records off-chain voting, meaning transactions are not publicly recorded on the blockchain.

The advantage of this approach is “convenience,” according to Anchorage:

“The trade-off for such convenience comes in the form of on-chain guarantees; Snapshot voting is free because votes are counted off-chain and thus no gas payments are required. The responsibility to enforce the decision is typically entrusted to a multisig who manages the protocol team.

Anchorage said it currently supports “more than 60 ERC-20 tokens,” with plans to enable support for all applicable future ERC-20 tokens.

Related: Anchorage forms a custody network with five crypto exchanges

In October 2022, it was announced that Anchorage had expanded operations into Asia with five new institutional partners, including Bitkub, DreamTrade and FBG Capital. It stated that Asian consumers have “adopted crypto with enthusiasm”.

Snapshot has recently been used to collect votes from AAVE and LDO token holders regarding each of the protocol’s latest upgrade or governance proposals.

[Aave Snapshot] [ARFC] Aave V2 Yield Curve Changes (2023-04-21) @indexcoop @SnapshotLabs pic.twitter.com/GrS1OkkHNs

– flour. (@emjicy) May 2, 2023

The voting system also proved beneficial for AAVE users who accidentally sent their tokens to the wrong address.

In July 2022, LidoDAO, the governing body that manages Lido Finance, a liquid staking solution for proof-of-stake cryptocurrencies, conducted a Snapshot vote on sending 1% of LDO’s token supply to DragonFly Capital for $14.5 million, which was rejected by token holders.

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