Institutional clients of crypto custody firm Anchorage Digital can now voice their concerns on 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 to allow its “token-holding community users” to vote on governance proposals with their tokens, without incurring any gas fees.
Anchorage Digital is pleased to announce that clients can now participate in Snapshot voting using their Anchorage Digital address. Our WalletConnect integration enables:
+ Voting from within qualified custody with no movement of funds
+ Secure off-chain governance for… pic.twitter.com/VYZ5pIwyl1— Anchorage Digital (@Anchorage) May 16, 2023
It said all voting will take place within Anchorage’s custody with no movement of funds.
Snapshot is used by decentralizeprotocols like AAVE (AAVE), Lido (LDO), and BitDAO. It records the voting off-chain — meaning transactions are not publicly recorded on the blockchain.
The advantage of this approach is “convenience,” according to Anchorage:
“The tradeoff for such convenience comes in the form of on-chain guarantees; Snapshot voting is free because votes are counted off-chain and thus do not require gas payments. The responsibility to enforce the decision is typically entrusted to a multisig that the protocol team operates.”
Anchorage said it currently supports “over 60 ERC-20 tokens,” with plans to enable support for all applicable future ERC-20 tokens.
Related: Anchorage forms custody network with five crypto exchanges
It was announced in October 2022 that Anchorage had extended its operations to Asia with five new institutional partners including Bitkub, DreamTrade and FBG Capital. It stated Asia’s consumers “have adopted crypto with enthusiasm.”
Snapshot has recently been employed 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 Interest Rate Curve Changes (2023-04-21) https://t.co/MQwcd5NVBt @indexcoop @SnapshotLabs pic.twitter.com/GrS1OkkHNs
— mel. (@emjicy) May 2, 2023
The voting system also proved beneficial for AAVE users who mistakenly sent their tokens to the wrong address.
In July 2022, LidoDAO, the governance body that controls 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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