Exploring Trading Bias and Governance Legos in Ethereum

Alessio Frateily

Alessio Frateily

Mar 06, 20243 min read


Exploring Trading Bias and Governance Legos in Ethereum


Ethereum, the popular blockchain platform, offers various strategies and tools for traders and governance participants. In this article, we will delve into two distinct concepts: trading system bias and governance legos. These concepts provide valuable insights into analyzing market behavior and facilitating decentralized decision-making within the Ethereum ecosystem.

Trading System Bias:

The trading system bias is a strategy that analyzes recurring behaviors in a specific market. It identifies optimal timeframes, such as specific hours or days of the week, to buy or sell a particular asset. By leveraging the historical price data, traders can identify patterns and make informed trading decisions. The Unger Academy® offers a software called the Bias Finder™, which simplifies the evaluation of Ethereum's historical price trends.

One common observation in Ethereum's intraday trading bias is the presence of a bearish trend at midnight (GTC), followed by a prompt recovery in the late morning hours, around 11:00. This cycle of price fluctuations continues throughout the day, creating a harmonious pattern of ups and downs. Based on the trade duration, three macrocategories of bias strategies can be distinguished: intraday, weekly, and monthly (or seasonal).

Governance Legos:

Governance legos refer to the combination of various components or modules that enable decentralized decision-making within a blockchain network. In Ethereum's governance ecosystem, signal voting, on-chain voting, and admin multisig are key legos that work together to ensure efficient and secure governance processes.

Signal voting, an off-chain mechanism, allows token holders to sign their votes using their public-private key pairs. This approach is cost-effective as it doesn't require gas fees. However, signal voting alone cannot directly impact the blockchain. To address this limitation, signal voting relies on servers like Snapshot or peer-to-peer broadcast networks like libp2p to broadcast and aggregate votes.

On the other hand, on-chain voting involves token holders submitting their votes directly on the blockchain through governance smart contracts. While this incurs gas costs, it enhances security and decentralization. Compound's Governor Alpha, a widely adopted governance model, exemplifies the use of on-chain voting to determine the passage of proposals.

Admin multisig is another crucial component of governance legos. It involves a fixed number of addresses sharing administrative power, with a subset of them having the authority to execute administrative commands. Gnosis' Safe smart contract is a well-known implementation of arbitrary size multisigs on Ethereum, widely used for administering protocol contracts and on-chain treasuries.

Combining the Legos:

By combining different governance legos, Ethereum projects can create comprehensive governance systems tailored to their specific needs. For example, the combination of signal voting and admin multisig enables the idea-to-proposal lifecycle, where token holders can freely raise new ideas and have them promptly executed by the multisig on-chain. This approach strikes a balance between cost-efficiency and security.

Snapshot, a popular governance tool, relies on signal voting for free voting participation. However, it depends on an admin multisig to accurately execute the voters' decisions on-chain. Recently, Snapshot announced its integration with the reality.eth oracle, enabling the direct execution of proposals on-chain, eliminating the need for an admin multisig.

Actionable Advice:

1. For traders interested in leveraging trading system bias, consider using tools like the Bias Finder™ to analyze historical price trends and identify optimal trading periods for Ethereum or other assets.

2. Governance participants should explore the combination of governance legos to design effective and decentralized decision-making processes. Experiment with signal voting, on-chain voting, and admin multisig to strike a balance between cost-efficiency and security.

3. Stay updated with the latest developments in governance tools and platforms like Snapshot, as they continue to evolve and offer new features that enhance decentralized decision-making within the Ethereum ecosystem.


Trading system bias and governance legos play vital roles in the Ethereum ecosystem, catering to the needs of traders and participants in decentralized decision-making processes. By understanding and utilizing these concepts effectively, traders can make informed decisions based on market patterns, while governance participants can contribute to the development and decision-making processes of Ethereum projects.

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