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prologue:

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Why do we need DAOs?

DAO is a very broad term. Different articles I have read have different interpretations of DAO. This is essentially a definition of DAO under different categories. In fact, DAO is a new form of organization or production relationship.

On the basis of decentralization, different teams and individuals establish a collaborative organization.

https://future.a16z.com/dao-canon/

A16Z has collected relatively complete materials for learning DAO and posted them here:

In this learning material, many articles explain why we need DAO.

In summary, DAO has:

Autonomy: Any determined rules are automatically executed based on the decentralized system, independent of individual will. This is very applicable in some scenarios that require high credibility. For example, referendums on project parameters involving major user interests, changes in project token circulation and unlocking rules, etc., all need to be jointly decided by DAO in the form of DAO voting and automatically executed according to the established results.

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The problem with DAOs

The problem with DAOs

However, after reading many DAO articles and even participating in some DAO organizations, we often find some key problems:

1) The organizational efficiency of DAO is very low, and the high cost of communication and collaboration makes it difficult for DAO to complete the collaboration of some complex matters.

2) The organizational form of DAO has no basis in laws and regulations, and the rights and obligations of DAO have not been fully supervised.

When faced with the above problems, we need to make some basic divisions of the types of DAOs. The reason is that different types of DAOs have inconsistent requirements for collaboration. The premise of asking questions is to clarify the scope of the problem.

So from the perspective of collaboration complexity, I would divide DAO into the following categories:

In general, scenarios with primary collaboration requirements are sufficient, and ConstitutionDAO is a good example.

Intermediate collaboration requirements play a very good role in some mature DeFi projects, such as curveDAO. Even due to the maturity of curveDAO, new attacks against DAO have also appeared. Although the attack behavior is wrong, it also proves the community governance model of DAO It has been respected and recognized by more and more users.

However, in more complex scenarios, the governance efficiency of existing DAOs will seriously affect the progress of events. This also leads to the fact that the degree of decentralization of a large number of decentralized products is not high. In essence, a large number of projects are still operated and decided by a specific company. Even sushi, a community project without VC and no pre-mining mechanism, has experienced many negative incidents of centralization since its operation. The soul person resigned, and the market leader in the Asia-Pacific region publicly questioned Sushi's centralization.

Does the emergence of so many problems mean that DAO can only complete partial transformation when faced with complex scenarios? For example, at the beginning, the intermediate level needs community governance, and the advanced level needs corporate governance?

I don't think so, the problem is not that DAO is not feasible, but:

1) The infrastructure of DAO is too weak

I tried multiple DAO tools, including DAO creation tools such as Aragon, DAOstack, Colony, and Haus, and some DAO Tools such as GNOSIS, Snapshot, and Superfluid.

It is found that most of them are only for some relatively simple needs, such as voting donations, fund management, etc. Unable to handle advanced collaboration needs.

2) The importance of the community to the DAO is not fully understood.

The more fomo the market is, the higher the user education cost is, which means that a large number of users do not have enough patience to understand the importance of DAO, which also leads to the lack of interest in decentralized autonomy.

The second problem is easier to solve, and users will actively accept a higher threshold in two cases:

(1) The occurrence of black swan events, such as frequent theft of DeFi projects, but the reason for the theft of a large number of projects is often the stupid problem of private key leakage, and even phishing hackers will target those who frequently submit code on github developers, sending them phishing emails and messages. The end result is frequent leaks. This kind of problem is easy to solve, you can have administrator privileges, but be sure to multi-sign management. This is also one of the responsibilities of DAO, and the decentralized management structure will greatly enhance security.

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solution

solution

1: Forward deduction

To deal with complex collaboration issues, we first need to determine the various variables and the smallest unit of collaboration, such as organizational structure issues, revenue distribution issues, authority management issues, and contribution determination issues in complex collaborations. Each question is a large variable, which contains various subdivision variables.

Taking the issue of organizational structure as an example, the organizational structure involves many small variables such as the level, authority, responsibility, and obligation of different functions. From the company level, if you want to take into account all aspects of complex collaboration, the difficulty is about the same as formulating a complete company charter, management system, and personnel system.

Therefore, it is difficult to directly give complete variables and the smallest unit from the beginning, but from the perspective of product design, perfect requirements cannot be achieved overnight, and continuous improvement and evolution are required. Therefore, we can change the way of thinking, proceed from the actual situation, use reverse thinking to deduce some existing clear requirements, and minimize them as much as possible, so that new requirements in the future will not be restricted by the initial design and enhance scalability.

2: reverse deduction

(1) Set up a sufficiently complex collaboration scenario - "Build a community autonomous DeFi protocol from 0 in the form of DAO.

(2) Sort out all the functions required to design, create, and operate a DeFi project.

In the picture above, I sorted out the complete functions required to operate a DeFi project. Among them, there are three types of decision makers and seven types of executors. The number of people in each function varies according to demand.

(3) Subdivide the main work of each function again

(4) Pricing for various functions and jobs

The number marked on the back of each job is the judged price (imaginative, everyone has different pricing principles, have a look)

As of now, the content written above is enough to drive a centralized company to develop a new project. Because the internal autonomy of the centralized company does not require transparent management, does not involve Token, and does not need to be complicated for the community, there is no need for DAO.

However, decentralized organizations need to consider more. The first additional consideration is the level of decision-making and structural issues.

(5) Set the decision-making level and structure of DAO

As an emerging DeFi project faces greater market competition, different development stages should have different decision-making structures. The earlier the development, the more concentrated the power should be, so that the pace of iteration and competition can be accelerated. But the later the development, the greater the scale of funds under management or the greater the benefits related to Token. Power should be more decentralized and democratic.

Specifically, we can set it like this:

Set the decision-making level into three types: decision-making level, executive level, and ordinary users

Divide the decision-making scale into 4 levels according to different trigger rules

Clarify the obligations and decision-making scope corresponding to different decision-making levels.

(6) Determine the incentive mechanism

After clarifying the functional requirements and decision-making mechanism, we need to think about how to motivate:

In general, after determining the contribution of various functions, incentives can be divided into basic salary and performance salary. In DAO, contributions can also be divided into two types: platform token and stable currency assets. But the crux of the problem is that if the determination of the results of distribution according to work is simply to limit the type of work and workload, it cannot accurately judge the value of the output.

Therefore, in the traditional working environment, the evaluation system is also very important. Therefore, we may design the entire incentive mechanism like this:

First determine the core of the incentive mechanism - Devote to Earn, and set up the rules as follows:

Combining Devote and DAO's token distribution, when the total amount is fixed, DAO's tokens are distributed according to the proportion of points.

The specific rules are as follows:

The above 6 steps are the relatively basic cooperation principles of DeFiDAO deduced through the method of reverse deduction, but because I was too sleepy to write, I did not write other governance systems and elimination mechanisms. The current relatively complete xmind is posted on Here, if you want to help me add, you can contact seerlabs to get the original version, free prostitution is fine, follow me on Twitter:

The collaboration of an engineering project is so complicated that it is just the basics. It can be seen that the advanced collaboration of DAO is indeed very difficult. So far, we have not found a project that can fully meet all the above-mentioned collaboration needs through DAO. But by sorting out the whole process, we can find a rule to follow, and maybe we can propose a solution that meets the needs of advanced collaboration:

3: Customized DAO collaboration management platform

(1) Why do you need

In the daily workflow, the demand for collaboration is ever-changing, but it is not without trace. From the above analysis, we can clearly see that almost all functions can be prioritized according to the behavior of the mind map, such as the decision-making system, The contribution system, the incentive system, and the governance system and elimination mechanism that I didn’t write about, and fund management can all be called the first-level requirements, and the others can be called the second- and third-level requirements.

It may be clearer to express this xmind in another way:

From this perspective, we need such a more clear and easy-to-use tool to edit and create some organizations suitable for advanced collaboration needs from a more subtle level.

Although some of the products I have tried have already had such a gradual evolution, the level of the overall product structure is not yet clear. And lack of custom composability.

For example, the creators of such auxiliary products should not provide one or more sets of templates, but should define some first-level requirements differently, and the higher-level requirements only define the scope and authority of functions.

In addition, there is often interdependence between the various first-level requirements of advanced collaboration, which requires the new DAO collaboration management platform to support the coupling judgment of different requirements. For example, the incentive system needs to be linked to the contribution system, and the asset management system needs to be linked to the incentive system.

To sum up, I think the market needs a collaborative management platform for DAOs.

(2) This platform needs to meet the following conditions:

a. Free definition

b. Can be defined step by step according to strict priority

c. Responses can be combined between high priority requirements

d. Architecture can be upgraded

e. More people can contribute workflow design ideas and provide templates

(3) Significance of this platform

If some advanced collaboration requirements can be met from the beginning (in fact, the engineering difficulty is not high), then the scalability of this platform can become very strong, especially the creation requirements of DAO under the premise that various policies are not clear More and more useful DAOs can achieve multiple goals:

a. Has the potential to become a DAOstarter

b. Has the potential to become a recruitment platform for DAO

c. Has the potential to become a gitcoin

d. Has the potential to become a web3 catalyst

SeerLabs (Prophet Labs) is a leading institution in Asia that focuses on blockchain market incubation. We have global cutting-edge marketing concepts and growth hackers, and are committed to helping project parties and startups achieve lightning-fast growth. Successfully participated in the incubation of 30+ projects such as Ploygon (MATIC), HoDooi.com, DIA, Paralink, Swingby, XEND Finance, BOSON, etc.

About SeerLabs:

SeerLabs (Prophet Labs) is a leading institution in Asia that focuses on blockchain market incubation. We have global cutting-edge marketing concepts and growth hackers, and are committed to helping project parties and startups achieve lightning-fast growth. Successfully participated in the incubation of 30+ projects such as Ploygon (MATIC), HoDooi.com, DIA, Paralink, Swingby, XEND Finance, BOSON, etc.

Risk warning: Digital assets are a high-risk investment target. The general public is requested to view the blockchain rationally, raise risk awareness, and establish correct currency concepts and investment concepts.