What is Squads Protocol (SMQ)?
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🟢 The simple version
Plain English — no jargon. Start here.
Squads Protocol is Solana's dominant multisig solution — similar to Gnosis Safe on Ethereum — allowing teams and DAOs to require multiple signers (e.g. 3-of-5) for any treasury transaction or protocol upgrade, preventing any single person from unilaterally moving funds or changing code.
Why multisig is critical for crypto teams
When a DeFi protocol's treasury or upgrade authority is controlled by a single private key, the entire protocol's security depends on that one key not being stolen, lost, or misused. A single compromised key = protocol drained or maliciously upgraded. Multisig distributes this risk: 3-of-5 signers must all agree before any action is taken. Even if two signers are compromised or offline, the treasury and program upgrades are protected.
For Solana protocols, Squads is the standard. If a protocol's program upgrade authority is a Squads multisig, you know that upgrades require consensus from multiple parties — a significant security improvement over a single-key deployer. This has become a due diligence standard: informed Solana DeFi users check whether protocols use Squads before depositing significant funds.
Squads' role in the Solana ecosystem
Major Solana protocols — Jupiter, Orca, marginfi, Sanctum, and many others — use Squads for their program authority and treasury management. Squads isn't a protocol you interact with directly as an end user; it's infrastructure used by the teams building the protocols you use. Think of it as the secure vault manufacturer for Solana DeFi: you don't see the vault, but its existence is why you trust the bank.
Is SMQ legal in India?
Yes. SMQ qualifies as a Virtual Digital Asset (VDA) under Indian law. 30% tax on gains and 1% TDS applies. Always consult a tax professional.
🟡 A bit more detail
For when you want to go a little deeper.
Squads v4: smart accounts and programmable policies
Squads v4 introduced "multisig smart accounts" — extending simple M-of-N signing into programmable spending rules. Examples: a treasury wallet that allows any single signer to approve transactions below $10,000 (daily spending), but requires 3-of-5 for anything above (capital allocation decisions). Or a protocol where certain parameter changes require a 24-hour timelock after approval, giving the community time to react before changes take effect.
These programmable policies bring enterprise-grade treasury management to DeFi teams. A DAO treasury managed with Squads v4 can have different governance thresholds for different transaction types — not just a blanket M-of-N requirement for everything. This makes Squads useful for DAOs where operational spending (marketing, development salaries) and strategic decisions (protocol upgrades, large allocations) require different approval processes.
The SMQ token is governance and represents a stake in Squads Protocol's future. Unlike a DeFi protocol token (which earns protocol fees from trading activity), Squads generates revenue primarily from subscription/enterprise fees paid by teams using the multisig service. This makes SMQ's value tied to adoption growth and enterprise revenue, not DeFi market cycles. A different risk profile than yield-generating tokens. Live data: CoinGecko
Squads vs Gnosis Safe on Ethereum
Gnosis Safe is the dominant Ethereum multisig — used by virtually every major Ethereum DAO and protocol team. Squads is the Solana equivalent in terms of market position. The technical implementation differs significantly: Solana's account model and transaction structure require a different multisig design than Ethereum's contract model. Squads is built natively for Solana's architecture, while Gnosis Safe-on-Solana would require a port. This gives Squads a durable technical moat: it's not easily displaced by a chain port of an Ethereum competitor.
🟣 The full technical picture
For the technically curious.
Key facts
- Token: SMQ (governance)
- Product: Multisig and smart account protocol for Solana
- Function: M-of-N signature requirements for treasury and program upgrades
- Squads v4: Programmable spending policies beyond simple M-of-N
- Users: Jupiter, Orca, marginfi, Sanctum, most major Solana protocols
- Due diligence signal: Protocols using Squads = lower centralisation risk
- Equivalent: Gnosis Safe on Ethereum
- Revenue model: Enterprise/subscription fees (not DeFi protocol fees)
- Risk profile: Infrastructure adoption risk (not DeFi yield cycle risk)
Why Squads matters for Solana DeFi due diligence
When evaluating a new Solana protocol, checking whether the program upgrade authority is a Squads multisig is one of the most important security checks. Protocols that retain single-key program upgrade authority — even with claims of "will migrate to multisig soon" — carry meaningful rug pull or key compromise risk. Squads' widespread adoption by reputable Solana protocols means that not using Squads is increasingly a yellow flag for new protocol launches. For Indian investors doing due diligence on Solana DeFi protocols, checking squads.so for a protocol's multisig setup is a practical security step.