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Snapshot is a voting mechanism based on the IPFS decentralised storage system, which is used to poll the user bases of several crypto projects.
Crypto initiatives are constantly looking for new ways to disrupt the world around them, from art to banking to aerospace to food. Recently, cryptocurrency has been altering how communities shape businesses.
In this Learn guide, we’ll look at how Snapshot is assisting decentralised enterprises in allowing their users to define the direction of a project.
Snapshot is a platform where projects may create proposals that people can vote on with cryptocurrencies. This is known as ‘vote signalling’ in the industry. Traditionally, using cryptocurrency to vote would incur fees to handle the transfer of currency from one wallet to another.
That does not happen on Snapshot, thanks to the ingenious use of the decentralised storage network known as IPFS. Because Snapshot does not use ‘on-chain’ verification, any votes cast are virtually free of charge.
On Snapshot, there are over 1,000 project proposals.
It’s a popular tool for decentralised organisations (DAOs) wishing to use blockchain technology to find out what their consumers think.
How do you use Snapshot?
Companies who want to use Snapshot must have an existing profile on the Ethereal Naming Service, or ENS. Once that is obtained, they create a record on ENS that allows votes to be viewed at that location.
In the meanwhile, users must have a wallet address containing the needed cryptocurrency in order to participate in a poll. Users holding one of our NFTs in a wallet like MetaMask, for example, would be allowed to vote on Decrypt’s Snapshot page.
Users need only connect their wallet to Snapshot’s website to vote on any open ideas on the site.
What makes Snapshot so special?
Cryptocurrency projects traditionally have to create the infrastructure themselves to conduct this sort of polling or use other methods that aren’t decentralized. These methods are both time-consuming and can be taken over by parties who may not have the project’s best interests at heart to skew the votes.
Snapshot differs in that it enables projects to seek out their most dedicated members who hold their prefered cryptocurrency and urge them to make judgments. It accomplishes this by not submitting transactions to a blockchain.
Instead, it creates and stores the votes using the IPFS network (read more about IPFS here). Snapshot may now utilise a blockchain to record how people responded to a poll without incurring the typical fees.
Those votes are made available to the poll developer via an interface, allowing them to keep track of events as they occur.
A brief history of Snapshot
Snapshot Labs, the Snapshot creators, came out of stealth mode in August 2020.
There isn’t much information on who is behind Snapshot right now, although it appears to have arisen from Balancer Labs, the R&D part of automated portfolio management and trading platform Balancer.
Who makes use of Snapshot?
Snapshot’s unique polling technology has been used by a wide range of organisations in the decentralised finance (DeFi) field. Uniswap, Balancer, Yearn, Bancor, The Graph, Aragon, and others are among them.
Oh, and Decrypt uses Snapshot too 🙂 – you can check out our page here.
What can you do with Snapshot?
The technology is intended to support a wide range of polls or surveys. For example, as part of the project’s roadmap, one project may invite its audience to vote on future features.
Uniswap, for example, asked its users if it should set aside funds to form a legal defence pool in the event that the initiative came under regulatory inspection. Another survey asked users what they thought the government should do with its treasury funds.
Snapshot’s purpose is to allow companies aiming for decentralisation to poll their consumers on which route a project should take, without the need for intrusive middlemen.
The near future
Although the project is still in its early stages, firms have already developed 1,000 separate locations where communities may come together to vote on suggestions.
Snapshot is totally open-source, allowing others to contribute to the project or develop alternate versions, implying that it could take many different paths.
— Snapshot Labs (Hiring!) (@SnapshotLabs) May 2, 2021
For the time being, it’s grown popular among DeFi initiatives looking for a quick, easy approach to ask audiences what they think.
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