Step 5: Getting Work Done
5/7 steps beginners course on how to Impact DAO. Inject the basics 💉
Previous: Step 4 on Community Organizing
Step 5: Getting Work Done - Work, Incentives, Decision Making, Voting, Governance Styles
5.1: Work + Tools
Quick recap: By now, you have a place on the internet (Discord/ Telegram, WhatsApp) for your community to chat. You've also outlined your DAO's why and what.
Now
List out initial tasks to be conducted. Do call for contributors for various tasks. You can also cluster tasks under broad categories such as marketing, admin, etc.
Decide how you'd like to structure your DAO to get work done. Would you like to be set up as micro-groups (pods >10), large groups of 10+ ( workstreams), or individual contributors (1:1)?
At this point, you'll need a task management tool to assign and manage tasks. Decentralized task management tools are great as they're designed for distributed internet communities.
Dework and Wonderverse are two great web3 task management tools. You can also use Asana or Trello, but web3 tools are specifically designed for internet communities and have web3 incentives built in.
5.2: Incentive Structures + Tools
Strive for intrinsic motivation first.
Gather a mission-first community that's intrinsically motivated by the cause. From the get-go, there should be an understanding that it's a shared mission and everyone must share responsibility. And that everyone needs to think and act like an entrepreneur in pursuing the mission.
Highly aligned mission first community > Large community with a shared mission.
Highly aligned peeps may not be visible initially, but slowly, they'll come to light.
Couple of ways to reward intrinsically motivated, often pro bono contributors 👇
Give them credit on social and every piece of the work jointly created.
On-chain reputation. Issue a recognition badge on the blockchain. A badge issued on a public blockchain will preserve the record of their contribution forever. These badges are called soul-bound tokens. They are non-transferable and non-financial. Otterspace.xyz is one such web3 tool that makes the issuance of badges easy.
External Incentives
You can pay your community for completing tasks via per-task payments known as bounties. Bounties are super popular in the DAO world. Bounties are paid in cryptocurrencies - stablecoin (All for Climate DAO) or native token (Bankless DAO).
On-chain proof of work. Recording contributors' work on-chain and helping build a proof of work history can help contributors unlock economic opportunities in the growing DAO landscape. In the emerging markets, this is one of the major drivers of people wanting to contribute to DAOs. On-chain proof of work is the resume of the new age. Wonderverse, web3 task management tool has built-in functionality to issue NFTs for every task completed.
5.3: Decision Making + Voting + Tools
People often think DAOs = voting. That's because the first wave of DAOs went crazy on voting; they wanted to achieve perfect democracy. But as we know, democracy breeds bureaucracy and makes things slow.
The good news is lots of DAOs are rethinking and finding a middle path between decentralization and centralization. Klima DAO and Proof of Humanity are two such DAOs.
Decision Making
Most operational decisions do not require to be voted upon. Instead, most need discussions, reaching an understanding, taking a call, and moving forward.
So when does the community vote 🤔
Initially you (or the core team) decide what kind of decisions need the entire community and what needs the core team to vote on. For example, at IDM, we took a community vote on the budget and DAOs to be included in the study for everything else; we discussed ideas in Discord and kept moving forward.
Vitalik Buterin, Founder of Ethereum suggests:
One way to categorize decisions that need to be made is to look at whether they are convex or concave. When decisions are convex, decentralizing the process of making that decision can easily lead to confusion and low-quality compromises. When decisions are concave, on the other hand, relying on the wisdom of the crowds can give better answers. In these cases, DAO-like structures with large amounts of diverse input going into decision-making can make a lot of sense.
More on convex and concave decisions on Vitalik’s blog, DAOs are not corporations.
Jeff Bezos: Never use a one-size-fits-all decision-making process.
Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that – they are changeable, reversible – they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.
As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention. We’ll have to figure out how to fight that tendency - Jeff Bezos on decision making
Voting Tools
Ok, now we've decided on decisions we'd like to vote on. What are the different ways to vote?
Voting can range from discord emojis to recording votes on decentralized voting platform.
For transparency purposes, record high-value decisions on decentralized voting systems. snapshot is popular for recording votes that are not on the blockchain. This kind of voting is known as off-chain voting. To interact with blockchain every time, one has to pay a transaction fee. On the Ethereum blockchain, this fee is known as gas ⛽️ To avoid paying the gas fee; most communities record the vote on off-chain platform snapshot to maintain transparency.
Big Green DAO of the nonprofit Big Green, started by Kimbal Musk to decentralize philanthropy, makes all grant-making decisions on snapshot.
Most DAOs discuss proposals on discourse before they put it up for a vote on snapshot.
Some Impact DAOs like Gitcoin use on-chain voting to maintain indestructible proof and transparency.
As mentioned earlier, one has to pay a fee (gas) to do an on-chain vote, but the good news is Aragon, the DAO tooling company, has recently made it super cheap to do on-chain voting with costs ranging from 25 - 50 cents.
5.4 Governance Styles
If your DAO is small, I suggest applying no hard governance/ voting style. Instead, keep governance discussion based to reach an understanding or no understanding as long as everyone's clear why.
As you grow and need formal governance and voting, the commonly used DAO governance styles are:
1. Delegate Voting: This is the most common voting style employed at DAOs.
Saf, a full-time contributor (employee) at Gitcoin DAO, explains:
Delegate voting means that not every community member or token holder has the time or resources to participate actively in governance. The governance tasks involve reading all the different kinds of governance proposals, being active in the governance forum, and being very aware and on top of the matters.
At Gitcoin, we delegate our tokens to someone in the community who is active and responsible and has expressed interest in participating actively in governance. We delegate our tokens to them. They are called stewards and designated as voting delegates.
2. One person, one vote: This means every unique person has one vote like at Big Green DAO of Kimbal Musk. And you can reach a consensus either through quorum (Kift DAO) or via delegate voting (Proof of Humanity)
Other governance styles include quadratic voting, conviction voting, etc. For a formal understanding of different types of DAO governance read https://daocollective.xyz/governance/
After talking to over 40 DAO builders, attending multiple DAO events + questioning the experts, I recommend and advocate for ⭐️ merit-based layered governance ⭐️
In a merit-based layered governance system, one earns the right to vote via contribution, and not all decisions are up for community vote. As the contributor invests more time in the DAO, they move from the outer community towards the core. Valley DAO in the space of DeSci uses layered governance. More of my thoughts on layered governance and public discourse in the Twitter thread here.
Next Up
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