Crypto Custodian Anchorage Enables Institutional Clients To Participate In DeFi Governance

Institutions holding DeFi assets with Anchorage Digital, a major crypto custodian, can now participate in DAO governance.

Anchorage has integrated support for Snapshot voting, a popular governance platform used by many leading DeFi projects, including Arbitrum, Curve, and ENS. Snapshot tallies votes off-chain, enabling gas-free voting.

“We added support for Snapshot voting because our institutional client base wanted to use this new off-chain innovation in governance,” Diogo Monica, president of Anchorage Digital, told The Defiant. “Snapshot is an important piece of infrastructure for facilitating the governance process for protocols in the Ethereum ecosystem along with EVM chains.”

The news could serve as a boon to decentralized governance participation, with a spokesperson stating the company has “billions of dollars in digital assets” under custody.

DAOs have long suffered from low voter turnouts and outsized participation from whales, including insiders and investors holding sizable shares of a token’s supply.

Boosting Participation

Anchorage’s co-founder told The Defiant that enabling on-chain governance was a focal point of its November 2020 federal bank charter application. Anchorage was awarded a federal bank charter two months later.

“We are proud to work closely with the [U.S. Office of the Comptroller of the Currency] to pave a forward-looking path for regulated crypto,” Monica said. “Adapting TradFi standards to the digital asset ecosystem will not happen overnight — it requires thoughtful collaboration between federal regulators and industry experts.”

Monica noted that Aave, Lido, and Uniswap are among the more than 60 tokens it supports that use Snapshot voting.

Snapshot Voting

Anchorage said 1,600 projects on Snapshot have submitted more than 5,500 unique proposals to date.

Snapshot is popular due to its gas-free voting, but off-chain votes effectively comprise straw polls. This means manual action is required to execute code changes after a vote concludes.

Governor, a rival platform developed by DeFi lending protocol Compound, automatically executes proposals passed via its governance platform. However, its on-chain voting mechanism isn’t free, creating a barrier to participation from smaller tokenholders.