This page is about dissolving a body inside a living DAO. For the organization ending itself – the wind-down vote, the redemption, and what survives it on-chain – see winding down a DAO.
Most writing about DAOs covers how bodies are created: a charter is drafted, seats are elected, a budget is approved – though the first budget of all is usually set before anyone is able to vote on it. Far less covers how they end. Yet a mature DAO constitution usually names the ending explicitly. Optimism's Operating Manual carries a proposal type called Council Dissolution, described as applying when a council “is no longer fulfilling its Charter”: permissionless to propose, active approval, 51% threshold, no veto, a two-week review period and a one-week vote.
Two structural facts follow from that entry, and they shape everything else on this page.
Continuation is the default. The dissolution proposals themselves state the rule: “a persistent Council is expected to continue into the next Season unless a Dissolution proposal is approved.” Nothing expires on its own. A body that has outlived its purpose keeps drawing its budget until somebody spends governance capital to close it, which is why dormant working groups accumulate in DAOs that never write the closing clause.
Dissolution is cheaper than removal. In the same table, dissolving an elected council needs 51%. Removing a director of the Optimism Foundation needs 76%. The community body is the easier thing to take apart, by constitutional design, and that asymmetry is not hidden anywhere: it is two rows of the same published table.
On 25 June 2026 the Optimism Foundation posted three dissolution proposals in a single voting cycle, targeting the Grants Council, the Milestones and Metrics Council and the Developer Advisory Board. All three share an identical opening and an identical diagnosis: after multiple seasons, “the current structure creates coordination friction without proportional benefit to grantees or the broader ecosystem.”
The Grants Council proposal is the one that states the general principle. It lists the overhead by name – “running elections, onboarding members, operating budgets” – and then draws a line that other DAOs can borrow directly:
“We believe those costs only make sense when there is a strong reason that a function being fulfilled by an independent group of people meaningfully increases decentralization where it matters most (ie. the Security Council.)”
That is a usable test. An elected body is worth its overhead when independence from the core team is the point of the body, and not when the body merely distributes work the core team could do faster. The same proposal discloses that Retro Funding, the Foundation's own programme, was paused on the same cost/benefit reasoning – so the retrenchment is not only aimed at community structures.
The other two proposals show the two ways a body dies. The Milestones and Metrics Council died by dependency: it existed to verify milestones on grants made by the Grants Council, so “without any community-led grant programs, the Charter of the Milestone and Metrics Council no longer serves any purpose.” Kill the upstream body and the downstream one has nothing to do. Delegates noticed the gap this leaves and asked, in the Grants Council thread, who would handle pending milestone verification after dissolution; the answer given was that the second dissolution was a separate proposal in the same cycle, which does not answer the question.
The Developer Advisory Board died by obsolescence argument, and its proposal contains the most striking sentence of the three. One of the Board's charter purposes was to help non-technical delegates understand protocol upgrades. The Foundation's case for closing it: “With rapid advances in artificial intelligence, we believe non-technical delegates are now sufficiently empowered to understand the implications of technical proposals without a dedicated Board required to fulfill this role.” Whatever one makes of it, it is a dated, checkable claim about what a DAO now expects its delegates to do unaided, and it belongs in any honest record of how governance structures were justified away in 2026.
The proposals describe three closures. The document underneath them describes something larger. On the same day the proposals were posted, the Operating Manual was rewritten as v2.0.0, a commit of 32 additions and 96 deletions, merged three weeks later. Reading that diff is the fastest way to see what a governance unwind actually removes, because the deletions are the parts nobody wrote a proposal about.
The v1.0.1 manual opened: “The Optimism Collective is governed by two houses, the Token House and the Citizens' House.” The v2.0.0 manual opens: “The Optimism Collective is governed by the Token House.” Everything downstream of that sentence went with it:
Two renames in that diff are worth more than they look. The proposal type once called Persistent Structure Dissolution is now called Council Dissolution: a general power to wind down any persistent structure, narrowed in name to councils. And under v1.0.1 that power could be routed to either house or to a joint vote, at 51% single-house or 60% joint. With one chamber gone, only the 51% single-house path remains. Separately, on 8 June, the Anticapture Commission's charter had already been deleted from the repository with the commit message “No longer needed”, with no dissolution proposal attached to it at all.
The manual's own change process is the reason all of this can travel in a commit: releases “go into effect as releases are published on GitHub”, and “only the removal of a proposal type requires a governance vote.” Anyone auditing a DAO's structures should therefore diff the constitution on every release rather than track the proposals, and Optimism deserves credit for keeping the constitution in public version control where the diff can be read at all. Most DAOs keep theirs in a document that silently overwrites itself.
The dissolutions were not uncontested, and the shape of the opposition is instructive. L2BEAT's governance team published its reasoning in the Grants Council thread on 15 July: it voted abstain. The rationale is worth quoting because it names the structural trap precisely:
“A community led council cannot function without the backing and funding of the Foundation, and forcing its continuation under these circumstances would only lead to friction.”
An elected body funded by the entity proposing its dissolution has no real veto. Voting the proposal down keeps the body alive on paper while the counterparty that pays for it has publicly said it does not want it. That is the general lesson: a council's independence is bounded by who controls its budget line, which is the same dependency that shapes service provider renewals and delegate incentive programmes.
The abstention also has mechanical consequences that the manual spells out and that are easy to get backwards. Optimism requires 30% quorum, measured against active votable supply, and the manual states plainly that quorum “includes abstain votes.” The approval threshold is computed differently: it is the share of yes votes “relative to the total number of yes/no votes cast”, and it “does not include abstain votes.” So an abstention helps a proposal clear the participation bar it must clear, and is absent from the ratio it must win. Under this rule set, abstaining is not a neutral act with respect to a proposal's passage – it is a contribution to quorum with the opposition removed. Anyone designing a ballot should decide deliberately whether that is what they want abstention to mean; see quorum and threshold design for the wider family of choices.
The dissolutions were argued on cost of overhead. It is worth checking the overhead against the DAO's own budget lines, because the figures point the other way.
As budgeted for Season 7 and reported by SEEDGov, the Collective's governance operating cost was 1,055,000 OP, split across four bodies: Grants Council 400,000, Milestones and Metrics 170,000, Developer Advisory Board 190,000, and the Security Council 295,000. The three bodies dissolved in 2026 are the first three, and together they were 760,000 OP, the cheaper 72% of that structure. The one carved out as worth its overhead is the fourth.
What that carve-out now costs is a separate proposal. The Security Council operating budget for Seasons 10 and 11 requests 5,040,000 OP, covering twelve months from 1 July 2026, for 14 members (13 signers and a lead) at 30,000 OP per member per month. The periods are not directly comparable – one season against twelve months – so this is not a like-for-like multiple, and the token's price moved a long way over the interval. The per-member rate is the cleaner number, and a delegate raised exactly that point in the thread: paying a body in a depreciating governance token makes the token line escalate even when the real compensation does not, which is an argument for denominating in stablecoins rather than for shrinking the council.
None of this makes the dissolutions wrong. It does mean that “reducing governance overhead” is a description of a structural preference, not of a saving: what was removed was the community-elected layer, and what grew was the signer set that executes upgrades. A DAO that wants the cost argument to carry weight should publish the before-and-after in one table, in one currency, over one period. Almost none do, for the reasons set out in DAO governance operating costs.
Dissolution answers what closes, not who does the work afterwards. In 2026 the common destination is a foundation with staff, and ENS is running the clearest public version of that argument.
A temp check posted on 19 June 2026 proposed establishing the ENS Foundation as an operating foundation with a full-time Executive Director, staff, and a five-seat board ratified by the DAO. Its diagnosis is the sharpest statement of the case for retrenchment anywhere in the 2026 record: the dysfunction comes from “the gap between what the DAO was meant to do (steward credibly neutral infrastructure) and what it actually does day to day (act as a budget committee for an organization).” Token votes are “slow, they carry little context, and they force a yes or no choice”, while running an organisation “needs repeated adjustment, judgment, and a specific person who can be held accountable.”
The executable proposal that followed on 30 July shows what community pressure moved and what it did not. Three scope reductions are itemised in its own abstract: DAO-held ENS tokens stay under tokenholder control, with a single carve-out of 1,000,000 ENS restricted to Foundation employee compensation; the operational wallet (wallet.ensdao.eth, roughly $16M in ETH and stablecoins as of July 2026) stays with the DAO rather than being delegated; and the Endowment Safe (endowment.ensdao.eth, roughly $65M) passes to Foundation Board control but with every transaction routed through a timelock that the Security Council can cancel. Tokenholders keep protocol control and the power to appoint and remove directors.
The objections in that thread are as much a part of the record as the proposal. Delegates argued that board composition and accountability structures were not addressed; that ENS Labs is simultaneously the DAO's largest funding recipient and the holder of enough ENS to represent a majority of active voting power; and that a foundation staffed and funded this way is accountable to the entity that populates it rather than to tokenholders. A competing temp check argued for an independent foundation on accountability grounds, which is a reminder that the choice is rarely DAO-versus-foundation but which foundation, appointed how. The DAO had already priced the interim: pausing its working groups for a four-month retrospective needed a $234,000 continuity budget, 83% of it compensation for the roster.
The proposal passed and the DAO executed it on 11 August 2026. The Foundation's board met for the first time on 15 September, adopted its bylaws, and approved a stand-up budget of $382,641 in USDC for September to December 2026, $294,520 of it headcount, which the Foundation published on 9 October. Publishing was a condition the proposal set on itself: until a budget was public, transfers from the Endowment to the Foundation were capped at $500,000 for stand-up costs. The Foundation now has two full-time staff alongside its Executive Director, and has committed to quarterly treasury reports and annual financials.
The pattern across both DAOs is the same three-step: elected bodies are closed on overhead grounds, execution consolidates into a foundation or core team, and tokenholders retain protocol-level control plus the power to remove directors. Whether that is maturation or capture depends entirely on whether the retained powers are usable in practice – which is a question about thresholds, quorum and the distribution of voting power, not about intentions. Compare progressive decentralization, which describes the same institutional arc pointed the other way, and governance minimization, which removes discretion from the protocol rather than relocating it into a company.
Scroll ran the same move on its Security Council, the body most DAOs keep. On 13 April 2026 Scroll proposed dissolving the council because its cost was no longer justified by how often it was used, and handing its admin role over the ScrollOwner, governor and timelock contracts to a Scroll Admin multisig, a transfer that needed the council's own support. Four of the DAO's five contributor roles were set to end by 30 April. Delegates asked who signs the multisig, at what threshold, and why the change was not going to an on-chain vote; the thread carries no answer. See Scroll DAO.
If a dissolution proposal appears in a DAO you participate in, these are the questions the published documents can answer:
A caper has no council, delegate or committee to dissolve: the contracts define none, so there is no seat or charter whose cost has to be argued season by season. Governance is a proposal and a ballot, and what each costs goes into the caper's own treasury, so the members who use governance pay for it rather than a standing budget.
A member who loses a restructuring argument also has one more option than a token-DAO delegate, who can vote no, abstain or sell. A caper member who has voted can exit at any time for their fair share of the treasury, in one transaction that needs no vote and that no founder or council can block. The share is earned by voting, so a big bag alone does not enlarge it.
Caper does not offer what the councils were for. No independent group stands between a proposal and its execution, no technical board reviews upgrades for members who cannot, and no elected reviewer checks grants. A structure with no bodies never faces a dissolution vote, and it never had the layer whose loss the Optimism delegates objected to. See what a caper is and how DAOs fail.