May 12, 2025
How WakeUp Labs Uses UMA’s oSnap for Trustless Rewards Distribution on Velora
Velora (formerly ParaSwap) is the most complete crosschain trading protocol in DeFi with reward distribution methods that incentivize DAO governance. However these distributions used to rely on one party, manual calculations, and multisig signers — an approach that reflected the tooling available at the time. It was slow, error-prone, and hard to audit. Built by WakeUp Labs using oSnap by @UMAprotocol, automation: the first fully onchain, trustless distribution of rewards and gas refunds went live. No manual signatures. No centralized intermediaries. Just decentralized, verifiable automation — executed by governance, validated by code.
What Just Happened?
Epoch 29 marked the first successful execution of an automated Gas Refund and Rewards distribution. Using Snapshot + UMA's oSnap module, Velora community members voted on the proposal — and once approved, the transaction was triggered onchain without the need for multisig signers or DAO operators to intervene manually.
93,350 sePSP1 were distributed across Ethereum and Optimism.
125.87 ETH distributed to stakers.
Fully verifiable Merkle Trees and proposal files were published to IPFS.
The DAO is now in control — and automation is the engine.
🧩 The Problem: Manual, Error-Prone Workflows
Before PIP-55, Velora’s incentive programs — like staking rewards and gas refunds — were calculated off-chain and executed manually by Laita Labs and the GovCo signers.
This process involved:
Coordinating calculations across multiple networks and data sources.
Manually updating the MerkleTree on the Rewards SmartContract.
Creating and sending token transactions to the Rewards SmartContract.
Waiting for DAO approval and manually signing transactions.
This model was error-prone, hard to audit, and didn’t scale.
🔧 Our Solution: Write scripts to gather data, post it on Snapshot, and use UMA’s Optimistic oracles for Execution
WakeUp Labs designed and implemented an end-to-end automated reward mechanism to calculate staking rewards and gas refunds, generate verifiable distribution data, and execute onchain transactions without manual intervention.
Scripts to gather data
Our automation stack begins with custom-built scripts that pull data from Velora’s onchain transaction history. These scripts compute user-specific staking rewards and gas refunds for each epoch, aligning with Velora’s incentive logic.Generating the needed Files
Once the calculations are complete, the scripts generate a .json with the Merkle Trees data — a cryptographic structure that efficiently and securely proves data inclusion without storing the entire dataset onchain — along with the corresponding proposal payloads, ready to be submitted for DAO approval.Snapshot Integration
These proposals are auto-submitted to Snapshot, where the DAO can vote on them.oSnap + UMA
Once approved, oSnap triggers a trustless transaction via UMA’s Optimistic Oracle. If no valid challenge is submitted within 24h, the transaction auto-executes onchain. Funds move. Rewards get claimed.Immutable Transparency
Proposal payloads and Merkle data are verifiable through the Snapshot proposal and also published to IPFS. Anyone can verify.
🛠️ Tools Used
Snapshot: DAO-native governance platform for voting.
UMA’s oSnap: A bridge between off-chain governance and onchain execution using optimistic verification.
Custom WakeUp Labs Scripts: For computation, formatting, and proposal generation.
IPFS: For data availability.
Velora Staking Mechanism: Reward logic based on stake duration, size, and ParaBoost Score.
What is UMA & oSnap?
UMA is an optimistic oracle protocol. It allows off-chain data (like governance outcomes) to be verified and recorded onchain — unless challenged and disproved.
oSnap is a governance plugin that connects Snapshot proposals to onchain smart contract actions.
Instead of needing a multisig to sign transactions after a vote, oSnap submits them automatically. The only way to stop it is to challenge the outcome via UMA’s oracle.
Why Velora? Why Now?
Velora (formerly ParaSwap DAO) has always been at the forefront of decentralization — pushing to make core decisions through the DAO and to ensure that token stakers earn a meaningful share of protocol revenue.
PIP-55 is another step in that direction: an initiative to fully automate reward distributions and bring treasury operations onchain — transparent, scalable, and hands-off.
WakeUp Labs was tasked with the full implementation — thanks to UMA’s oSnap and Laita Labs, we’ve now hit the biggest milestone: live automated execution.
Impact & Takeaways
With onchain execution now fully automated, the DAO gains speed, security, and real decentralization. Here’s what that unlocks:
Efficiency: No more manual ops or coordination overhead — rewards go out faster.
Security: Eliminates single points of failure and reduces human error.
Decentralization: Governance decisions now trigger real onchain results — hands-off, trustless.
Transparency: Everything is open-source and verifiable, from the Merkle data to proposal payloads.
DAO infrastructure, upgraded.
What’s Next?
Looking ahead, the next steps include finalizing the full integration of the oSnap plugin for recurring use, ensuring that future distributions can be executed seamlessly. We’ll also continue improving the proposal tooling to streamline the submission process for upcoming Epochs. Beyond reward automation, there’s potential to extend this system to other DAO functions such as treasury movements or emergency responses. As always, we’ll be actively gathering community feedback to refine and iterate on the implementation.
-
About UMA Protocol
UMA is the industry standard for bringing real-world truth onchain through its secure and scalable optimistic oracle. UMA’s Optimistic Oracle (OO) specializes in verifying complex real-world data that other oracles can't handle, and it now secures billions of dollars in value across DeFi, prediction markets, DAOs, and more. UMA's economic design ensures that truth-telling is both incentivized and profitable, making it the most trusted solution for onchain data verification.
Website: https://uma.xyz/
X (Twitter): https://x.com/UMAprotocol
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About Velora
Velora is the most complete crosschain trading protocol in DeFi. Powered by intents, it transforms complex trading strategies into a single unified experience, featuring limit orders, super hooks, and gasless swaps across chains.
Website: https://www.velora.xyz/
X (Twitter): https://x.com/veloradex
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About WakeUp Labs
WakeUp Labs is a software development studio that helps businesses accelerate their development. We provide end-to-end development services, from ideation and strategy to design and implementation, helping our clients to unlock the full potential of technology.
Website: https://www.wakeuplabs.io/
X (Twitter): https://x.com/wakeuplabs
What Just Happened?
Epoch 29 marked the first successful execution of an automated Gas Refund and Rewards distribution. Using Snapshot + UMA's oSnap module, Velora community members voted on the proposal — and once approved, the transaction was triggered onchain without the need for multisig signers or DAO operators to intervene manually.
93,350 sePSP1 were distributed across Ethereum and Optimism.
125.87 ETH distributed to stakers.
Fully verifiable Merkle Trees and proposal files were published to IPFS.
The DAO is now in control — and automation is the engine.
🧩 The Problem: Manual, Error-Prone Workflows
Before PIP-55, Velora’s incentive programs — like staking rewards and gas refunds — were calculated off-chain and executed manually by Laita Labs and the GovCo signers.
This process involved:
Coordinating calculations across multiple networks and data sources.
Manually updating the MerkleTree on the Rewards SmartContract.
Creating and sending token transactions to the Rewards SmartContract.
Waiting for DAO approval and manually signing transactions.
This model was error-prone, hard to audit, and didn’t scale.
🔧 Our Solution: Write scripts to gather data, post it on Snapshot, and use UMA’s Optimistic oracles for Execution
WakeUp Labs designed and implemented an end-to-end automated reward mechanism to calculate staking rewards and gas refunds, generate verifiable distribution data, and execute onchain transactions without manual intervention.
Scripts to gather data
Our automation stack begins with custom-built scripts that pull data from Velora’s onchain transaction history. These scripts compute user-specific staking rewards and gas refunds for each epoch, aligning with Velora’s incentive logic.Generating the needed Files
Once the calculations are complete, the scripts generate a .json with the Merkle Trees data — a cryptographic structure that efficiently and securely proves data inclusion without storing the entire dataset onchain — along with the corresponding proposal payloads, ready to be submitted for DAO approval.Snapshot Integration
These proposals are auto-submitted to Snapshot, where the DAO can vote on them.oSnap + UMA
Once approved, oSnap triggers a trustless transaction via UMA’s Optimistic Oracle. If no valid challenge is submitted within 24h, the transaction auto-executes onchain. Funds move. Rewards get claimed.Immutable Transparency
Proposal payloads and Merkle data are verifiable through the Snapshot proposal and also published to IPFS. Anyone can verify.
🛠️ Tools Used
Snapshot: DAO-native governance platform for voting.
UMA’s oSnap: A bridge between off-chain governance and onchain execution using optimistic verification.
Custom WakeUp Labs Scripts: For computation, formatting, and proposal generation.
IPFS: For data availability.
Velora Staking Mechanism: Reward logic based on stake duration, size, and ParaBoost Score.
What is UMA & oSnap?
UMA is an optimistic oracle protocol. It allows off-chain data (like governance outcomes) to be verified and recorded onchain — unless challenged and disproved.
oSnap is a governance plugin that connects Snapshot proposals to onchain smart contract actions.
Instead of needing a multisig to sign transactions after a vote, oSnap submits them automatically. The only way to stop it is to challenge the outcome via UMA’s oracle.
Why Velora? Why Now?
Velora (formerly ParaSwap DAO) has always been at the forefront of decentralization — pushing to make core decisions through the DAO and to ensure that token stakers earn a meaningful share of protocol revenue.
PIP-55 is another step in that direction: an initiative to fully automate reward distributions and bring treasury operations onchain — transparent, scalable, and hands-off.
WakeUp Labs was tasked with the full implementation — thanks to UMA’s oSnap and Laita Labs, we’ve now hit the biggest milestone: live automated execution.
Impact & Takeaways
With onchain execution now fully automated, the DAO gains speed, security, and real decentralization. Here’s what that unlocks:
Efficiency: No more manual ops or coordination overhead — rewards go out faster.
Security: Eliminates single points of failure and reduces human error.
Decentralization: Governance decisions now trigger real onchain results — hands-off, trustless.
Transparency: Everything is open-source and verifiable, from the Merkle data to proposal payloads.
DAO infrastructure, upgraded.
What’s Next?
Looking ahead, the next steps include finalizing the full integration of the oSnap plugin for recurring use, ensuring that future distributions can be executed seamlessly. We’ll also continue improving the proposal tooling to streamline the submission process for upcoming Epochs. Beyond reward automation, there’s potential to extend this system to other DAO functions such as treasury movements or emergency responses. As always, we’ll be actively gathering community feedback to refine and iterate on the implementation.
-
About UMA Protocol
UMA is the industry standard for bringing real-world truth onchain through its secure and scalable optimistic oracle. UMA’s Optimistic Oracle (OO) specializes in verifying complex real-world data that other oracles can't handle, and it now secures billions of dollars in value across DeFi, prediction markets, DAOs, and more. UMA's economic design ensures that truth-telling is both incentivized and profitable, making it the most trusted solution for onchain data verification.
Website: https://uma.xyz/
X (Twitter): https://x.com/UMAprotocol
-
About Velora
Velora is the most complete crosschain trading protocol in DeFi. Powered by intents, it transforms complex trading strategies into a single unified experience, featuring limit orders, super hooks, and gasless swaps across chains.
Website: https://www.velora.xyz/
X (Twitter): https://x.com/veloradex
-
About WakeUp Labs
WakeUp Labs is a software development studio that helps businesses accelerate their development. We provide end-to-end development services, from ideation and strategy to design and implementation, helping our clients to unlock the full potential of technology.
Website: https://www.wakeuplabs.io/
X (Twitter): https://x.com/wakeuplabs
