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Introduction to Snapshot

Table of Contents

Snapshot is a protocol for crypto projects that allows decentralized voting – Snapshot runs on the blockchain. At first glance, the Snapshot protocol is nothing new. For a long time, crypto projects let their community vote on proposals by utilizing their governance tokens.

In order to vote, users can send these governance tokens to a specific wallet address, which corresponds with a voting choice (EG. Yes/No). The address that ends up with the most governance tokens is the one that comes out as the ‘winner’. However, there is a fairly big disadvantage to this way of voting.

The disadvantage of voting with governance tokens #

Depending on the type of blockchain, sending governance tokens can incur a lot of costs. On the Ethereum (ETH) blockchain, transaction costs can sometimes amount to hundreds of dollars. It is, without a doubt, not good for the works of such crypto projects.

Crypto projects make it possible to vote because they like to put the direction of the project in the hands of the community. This system is best compared with the functioning of a democracy, in which the people decide which course a country should take.

However, high transaction costs can deter people from voting. Instead, only people who have a budget can vote for this, so that the support for a particular choice is largely made up of the ‘rich’.

Why Snapshot is better #

The Snapshot protocol can be used by any project. Projects can easily integrate it after which users can vote on new proposals. Even better, users do not pay any fees for moving cryptocurrencies. This is because Snapshot uses IPFS (InterPlanetary File System).

IPFS is a decentralized data storage network that runs alongside the mainchain. Because the data is not processed on-chain, there are no costs associated with creating and moving data.

Moving processes to a chain that runs next to the main chain is increasingly used. Blockchains have to process more and more traffic, which increases costs and processing time. By executing processes outside the blockchain, the network of the mainchain is less burdened.

What Snapshot can be used for #

Snapshot can be used by any project within the crypto and blockchain space. It is a very popular tool for DAOs (Decentralized Autonomous Organizations) in particular. Developers can easily integrate the protocol within their projects. This comes with the advantage that developers do not have to invest time, money and energy in developing their own system for processing votes.

Popular Snapshot’s users #

Snapshot launched in August 2020. Since then, many projects have decided to use Snapshot, of which the following projects are the most famous and important:

  • Uni-swap (UNI);
  • Balancer (BAL);
  • Yearn.Finance (YFI);
  • Bancor (BNT);
  • The Graph (GRT);
  • Aragon (ANT).
Updated on May 31, 2022

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Disclaimer: This is done with our best knowledge and effort, nothing can be known for certain – always DYOR and risk management. This is NOT financial advice. Use the information presented here to inform your own decisions. Referral links may be included on any outbound link.

  • What do the risk ratings mean?

Our mission here at RugDoc is to screen for hard rug code that results in 100% theft of ALL underlying funds for ALL participants.

This is the ONE part of the due diligence process that most people cannot simply do on their own as it costs thousands of dollars to hire a senior solidity developer to look over a farm for safety.

A project coin with terrible code can go up in price, and a project with good code and a good team can also go down in price.

Do NOT use our ratings to refer to your likelihood in making money if you invest in the project. They are ONLY in reference to code safety.

Everything else beyond code safety is YOUR responsibility to go do research on. We just make sure the casino you’re betting in won’t rob you before you even get to place a bet.

Our reviews for projects are organized into a few colors.

🟢 Least Risk
These projects are the least likely to hard or soft rug. Usually reserved for cornerstone projects of an ecosystem where it makes no financial sense for them to rug in any manner as they make more money just being legit.

🔵 Low Risk
These projects are usually established projects in an ecosystem that have a track record of success or have KYC’d to us or other authoritative sources in the real world. As a result, it is extremely unlikely for them to soft rug or hard rug their projects. The projects can still fail and the token price can go down, but usually more as a result of natural market forces.

⚪️ Some Risk
This is the default rating for projects with unknown teams but have code that is unlikely to have hard rug risk. Since the team is unknown and doesn’t have a track record of success, it’s entirely possible that they may try to soft rug by dumping tokens, abandoning the project, etc. Even a last minute contract swap to a malicious contract is possible. The only thing that is unlikely is a complete hard rug as long as you are 100% sure you deposit into the contract we review.

🟠 Medium Risk
Similar to Some Risk, but the underlying code itself is custom enough or complex enough that it warrants an elevated risk rating that needs deeper research. Make sure you read every point presented to make sure you’re comfortable with that before entering. Still unlikely to hard rug, but more chances of custom code behaving incorrectly and causing other issues.

🔴 High Risk
Project contains code or practices that are HIGHLY LIKELY to lead to catastrophic losses as they are right now. Make sure you read the description carefully as we will always warn what these issues are. If you see the words Hard Rug anywhere in the review, STAY FAR AWAY!

⚫️ Not Eligible
We reserve the right to not review exceedingly complex projects that would require tens of thousands of dollars of senior security analyst man hours. Typically these are projects that deal with leverage, lending, options, derivatives, and anything that is overly complex and which requires tons of peer reviews and audits from top audit companies.

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  • How can I request for an update to my review?

🟢 For owners who have made impactful changes and would like an update to their farm review:

1️⃣ Use #update at @RugDocChat with your description and proof of changes and it will be forwarded to our scanners.

2️⃣ This does not guarantee a change in your review.

3️⃣ Owners who have difficulty solving the issues can consider our Consultation Package - please contact @BaymaxCrypto on Telegram to discuss.