ReFi DAOs and project teams are at the forefront of these efforts, driving positive social and environmental impact through innovative financial models that leverage blockchain technology effectively. Speaking of positive impact, Gitcoin Grants has just launched Round 19 of the innovative public goods donation model which directs matching funds to those projects that receive support from many donors. BanklessDAO and various BanklessDAO project teams are again participating in the Web3 Community and Education round — we’d love to have your support.

We also feature insights from the DAO ecosystem, including articles on AI DAOs, internet-native companies, The DAO hack, and the power of real-world connections in the digital age.

We hope you find this edition informative and inspiring as we explore ReFi and its roots in Fullerton’s ‘Eight Principles of Regenerative Economics’. Thank you for joining us on this journey through the State of the DAOs.

Contributors: BanklessDAO Writers Guild (Boluwatife, Tonytad, angelspeaks, Quilia, Vi-Fi, trewkat, siddhearta, HiroKennelly)

This is an official newsletter of Bankless Publishing, a BanklessDAO-affiliated project. Please subscribe and share to help us grow our audience as we fulfill our mission to build user-friendly crypto onramps.

Subscribe now

Share

ReFi Rewards Balance and Resilience

Author: Boluwatife

The term ReFi was born out of a concept that an economist named John Fullerton put forward in 2015, a concept he called regenerative capitalism. According to Fullerton, there are eight principles which underpin an economic and financial system capable of generating shared prosperity for all. As you read further about ReFi, you will see the relationship between these principles and the ReFi ecosystem we have today.

Although the idea behind ReFi originated in 2015, the name only followed on the heels of its predecessor DeFi, which originated in the crypto space in 2018. Decentralized finance, or DeFi, is a movement that seeks to offer more accessible and transparent financial services using decentralized, permissionless, blockchain networks. DeFi initiatives strive to build a novel financial system that isn't dependent on traditional financial institutions and can operate around the clock without requiring intermediaries.

ReFi — or regenerative finance — is the next evolution of DeFi.

Why ReFi?

ReFi is a financial paradigm that places a higher value on the health and resilience of ecosystems, societies, and the environment than it does on monetary gain. The goal is to design economic models that support sustainable development and help underserved populations while fostering social and environmental impact. ReFi is a departure from traditional financial structures that have been criticized for putting short-term profit over long-term sustainability.

Currently, our planet is faced with the crises of climate change and biodiversity loss. It seems that the human mind is forcing away the fact that we only have one earth, and the effects of this crisis are not to be taken lightly. Luckily some groups of people and institutions are looking at alternative models and incentive structures to solve this planetary crisis.

No doubt the words of Albert Einstein resonate with proponents of ReFi:

“We can't solve problems by using the same kind of thinking we used when we created them."

ReFi embodies a potential advancement of technology, organizational structures, and human awareness. To fix the Earth's current crisis we have to redesign financial incentives and align them with the pillars of ReFi which are:

• Ensuring climate stability by reducing and eliminating greenhouse gas emissions primarily through carbon markets.

• Restoring ecosystems by promoting biological diversity, which can be exchanged with carbon market infrastructure.

• Instituting social justice by creating regenerative local economies that are grounded in communities of care.

ReFi’s Core Values

The core values of ReFi are mapped after Fullerton’s Eight Principles of Regenerative Economics:

• In right relationship: this gives priority to healthy financial ties between all parties, avoiding imbalanced ties that disturb the financial ecosystem.

• Empowered participation: Provision of an ecosystem that allows for empowered involvement so that all parties may interact, negotiate their demands, and advance the health and well-being of bigger systems.

• Views wealth holistically: By defining wealth as a state that must be managed for the benefit of the whole, wealth can be seen more broadly than just the sum of the numbers in a bank account or cryptocurrency wallet.

• Innovative, adaptive, and responsive: To exist in a hostile environment and guarantee a free flow of capital, services must be innovative, flexible, and responsive.

• Seeks balance: keep all parties in a healthy balance, enabling the growth of human, social, natural, and physical capital.

• Edge Effect Abundance: this encourages innovation and abundance at the system's margins to provide new opportunities and benefits for the community and environment.

• Honors Place and Community: Create thriving, resilient communities that are distinctive to their history and location in order to sustain regenerative finance.

• Robust circulation: ensure a healthy financial circuit that allows financial and human entities to develop.

ReFi projects prioritize social impact, equity, and sustainability. To help achieve these goals, smart contracts are used because they automate financial transactions and eliminate the need for intermediaries, which lowers costs and increases transparency.

One of the primary characteristics of the ReFi ecosystem is its emphasis on sustainability. The ecosystem's projects prioritize using clean energy to power their operations, such as solar and wind power, which reduces their carbon footprint and promotes environmental responsibility.

Another feature is the ReFi ecosystem's commitment to positive social impact. This is accomplished through a variety of programs, including financial assistance to underserved areas, investments in renewable energy infrastructure, and funding for social enterprises and impact-driven projects.

Building a Sustainable Future

A vanguard of mission-driven DAOs aims to propel ReFi from concept to widespread implementation:

• Regen Network supports education and research on ReFi models through grants and literature synthesis.

• Commons Stack develops frameworks and workflows for DAOs to easily fund public goods like ecological restoration. Its life fund provides grants for preserving biodiversity.

• ReFi DAO supports local ecosystems in global south countries using crypto tools to finance sustainability.

• Klima DAO has created a tokenized carbon offset scheme supporting the transparent removal of over 17 million tons of CO2 so far. This is one of the most explosive ReFi projects so far.

Several blockchain protocols and standards provide the foundation for decentralized ReFi applications:

• Climate Chain Coalition develops the Regen Ledger, an open standard for registries tracking carbon mitigation outcomes.

• Moss Earth Protocol issues tokenized carbon credits (MCO2) driving a marketplace for nature-based carbon sequestration.

• Polymesh enables legally compliant tokenized securities, used in regulated ReFi investment offerings.

• Geo Web's Proof of Location verifies conservation sites on-chain, enabling precise regenerative project mapping.

Several for-profit startups serve as bridges into mainstream finance, developing crypto investment vehicles that heal ecosystems:

• Nori offers a regulated, tokenized voluntary carbon credits marketplace enabling corporate offset purchasing.

• EcoCoin converts plastic waste into tokens via drop-off kiosks, funding local sustainability efforts.

These platforms and protocols are just the tip of the iceberg. There are multiple organizations already doing the good work of pushing the ReFi movement forward.

The Future of ReFi

ReFi has recently shifted from a fringe concept to a growing movement. The existential urgency of ecological crises alongside crypto's newfound mainstream legitimacy has accelerated this trend. Still, realizing ReFi’s full potential requires bridging gaps between the decentralized ethos of DAOs and startups with incumbent policy and finance.

Near term, educating regulators and traditional investors can expand ReFi’s viability. Long term, decentralized governance and transparency intrinsically align ReFi with the needs of communities and environments.

ReFi offers a path to fund this transition and empower local stakeholders. Through tireless work from its diverse and determined advocates, ReFi’s reach grows daily. Keep an eye out for the newly introduced Climate Solutions Round in the current Gitcoin Grants 19 to support project teams who are passionate about building in the ReFi space.

Recently, ReFi Week 2023 showcased more of this innovation. More than 40 ReFi leaders across projects like Regens Unite, ReFi Lisboa, Silvi Protocol, and Impact Market gathered for a week of collaboration and creation.

Activities included a mass tree planting of over 800 trees tracked via leading ReFi protocols like Silvi and Open Forest.

Events like ReFi Week highlight the momentum toward leveraging crypto to incentivize low-carbon lifestyles and fund climate solutions. With gamification and personal carbon tracking also emerging, the future of ReFi looks promising.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

AI DAOs Series

Author: Trent McConaghy

🔑 Insights: This series features a collection of the key articles written by the author about AI DAOs and humanity.

• Blockchain For Artificial intelligence

• AI DAOs, and Three Paths to Get There

• Wild, Wooly AI DAOs

• The AI Existential threat: Reflections of a Recovering Bio-Narcissist

• The Bandwidth++ Scenario

• Nature 2.0: The Cradle of Civilization Gets an Upgrade.

Making Companies First Class Citizens of the Internet Economy

Author: arthaud.eth

🔑 Insights: The author writes that an Internet Native Company (INC) is a “for-profit organisation that is created, operated and governed on-chain”. INCs create a seamless, automatic and programmatic way for governments and digital economic agents to interact.

• The imperfect binding of the offchain and onchain world makes hybrid companies second-class citizens of the internet economy.

• INCs will become first-class citizens of the Internet economy because they operate onchain, grant legal personality to smart contracts, and recognise code is law.

• The source of economic production is shifting from labour and capital to technology.

Not Forking Around: The DAO Hack

Author: trewkat

🔑 Insights: Blockchain immutability, grounded in distributed nodes and cryptographic links, is a foundational principle. However, pivotal events, such as The DAO hack in 2016, led to a critical decision: a hard fork in Ethereum, resulting in the creation of two divergent chains — Ethereum (ETH) and Ethereum Classic (ETC).

• The Ethereum community faced a dilemma when a significant ‘hack’ exploited The DAO's smart contract, prompting a debate on whether to maintain blockchain immutability or reverse the theft through a fundamental protocol change.

• The Ethereum Foundation's response was to initiate a hard fork, leading to two separate blockchains (ETH and ETC).

• The hard fork exposed ideological differences within the community, with Ethereum Classic emphasizing the preservation of "Code is Law."

The Power of Real-World Connections in the Digital Age

Author: Puncar

🔑 Insights: In this online-oriented world, the need to foster human connection through in-person interactions becomes significant. How To DAO (H2D) stands at the forefront of this movement and aims at educating and connecting people in the world of web3.

• Through the H2D initiative, conferences have been held to bring founders, builders, and global web3 thought leaders and audiences together. These events help showcase the possibilities of blockchain and bring the technology closer to people.

• Face-to-face interactions foster trust, understanding, and collaboration. It also gives people the opportunity to learn from each other and connect on a deeper level.

• The web3 landscape spans diverse domains, and incredible breakthroughs emerge when various industries collaborate and exchange ideas. Engaging with diverse individuals at in-person events opens doors to exciting opportunities and connects you with people who share a common interest.

There’s room for everyone in web3, and with the right connections you can discover your space and start thriving.

🍏 Gitcoin Grants 19

Gitcoin Grants aims to foster innovation in the web3 space while aligning with the principles of decentralization and community empowerment. The broader vision for GG19 is to maintain the essence of Gitcoin Grants amid a shift towards a suite of decentralized products, ensuring the community ethos remains vibrant.

As usual, there is a strong showing from BanklessDAO and various BanklessDAO project teams in the Web3 Community and Education round. This round will run on the Public Goods Network.

If you need more info on getting your Gitcoin Passport ready, revisit this Bankless Publishing X thread, and get ready for a good grants round!

But as HiroKennelly writes, "regardless of what a DAO is, they are all built using the same dozen or so building blocks of digital organizations, many of which are akin to social legos". This issue’s editorial delves more into these foundational blocks as the author taps into years of DAO experience to introduce us to the 10 C's of DAOs.

As usual, we also feature latest news and updates in the DAO ecosystem. From VitaDAO's latest biotech spinout to governance, incentive structure, and social security issues in web3. This issue is fully packed to help you cut through the noise and get up to speed with the current state of the DAOs.

Contributors: BanklessDAO Writers Guild (Quilia, Warrior, ab_colours, Vi-Fi, Boluwatife, Kornekt, trewkat, siddhearta, HiroKennelly)

This is an official newsletter of Bankless Publishing, a BanklessDAO-affiliated project. Please subscribe and share to help us grow our audience as we fulfill our mission to build user-friendly crypto onramps.

Subscribe now

Share

The Building Blocks of DAOs

Author: HiroKennelly

Although DAOs have been around for seven years, they are still pretty hard to define. The term ‘decentralized autonomous organization’ does very little to describe what they are, what they do, or how they do it. Even those of us who work and play in DAOs for hours each day have a really hard time describing just what it is we are doing and how we are DAOing it.

Is decentralization a reference to the technology, the people, the workstreams, the organizational structure, or the ownership distribution?

Is the decentralized organization autonomous because it historically has not been part of a regulatory or statutory regime, because of the idea that decisions are entirely left to onchain votes and executed by smart contracts, or because these entities enable maximum agency so that people can contribute as they see fit?

Are DAOs a tightly run, smart-contract enabled, on-chain voting organization of the future or are they loose collectives of nomads with a multisig and a governance token?

The answer to these questions is that it depends on the DAO.

Regardless of what a DAO is, they are all built using the same dozen or so building blocks of digital organizations, many of which are akin to social legos. When I first wrote of my experience in DAOs, I had all these ‘C’ words swirling in my head, writing that DAOs “operate at the confluence of contribution and collaboration, coordination and consensus, cohesion and community, all fueled by capital through a tokenized incentive structure.”

This is true, but after two years of bear-market building, I would add a few more C’s to the list of seven, namely culture, centralization, and constraints. As the bear gets sleepy and the bull begins to stir, let’s do a brief overview of these social legos to better understand how to get ready for the next great wave of DAO contributors.

The 10 C’s of DAOs

As with the DeFi primitives from which the social lego concept derives its name, the many C’s are composable — that is, interchangeable — but the way in which these legos are set and stacked determines the kind of DAO that will be built and maintained. As with DeFi primitives, some of these legos can be amplified or toned down depending on what behaviors the DAO wants to encourage.

Unlike with DeFi composability however, social legos don’t just easily slot together; many become embedded only once a solid structure is built. Some would call this stickiness, but it’s also a metaphor for resilience. If we can learn how these legos fit together and how to properly calibrate them, we should be able to build modular, resilient DAOs that will be ready to scale. But like all world-changing acts, first we need a list and a brief description.

In no particular order, the building blocks of a DAO are:

1. Contribution: Wanting to contribute to the mission of a DAO is often what draws people to a particular organization. In this context, contribution refers to the efforts and inputs of each member. Depending on the DAO, this can be almost anything, from coding, content creation, operations, and community management, to design, translation, and specialized knowledge that adds value to the DAO and helps to drive its mission forward.

2. Collaboration: Like any organization, DAOs require collaboration. Unlike many traditional organizations, however, members’ efforts to achieve common objectives are often self-driven, cross-functional, and asynchronous. Given the decentralized and distributed nature of DAOs, collaboration is typically facilitated by digital platforms and relies heavily on social capital, trust, and mutual respect among members.

3. Coordination: In a very technical sense, coordination refers to the effective organization and alignment of tasks, resources, and members' activities within the DAO. On a practical level, DAOs are experiments for finding new ways to coordinate at scale, leveraging technology to make Layer Zero – the human layer – stronger.

4. Consent: Consent refers to the idea that a particular course of action is deemed safe to try by a DAO’s members. Contrast this with consensus, which requires that all members of a DAO agree on a particular course of action. Although these terms are often conflated, rarely, if ever, is consensus achieved.

5. Cohesion: The glue of web3, cohesion is the unity and alignment of members with the organization's mission. It is a sense of belonging, of collective identity, that binds the members together, creating resilient organizations. A cohesive group will try to find a way to work through individual disagreements for the good of the whole.

6. Community: The community is the lifeblood of any DAO; the collective as manifested by its members and stakeholders. Community is the critical element in the DAO social stack, as DAOs are inherently community-driven, relying on the active participation, engagement, and collaboration of their members to fulfill its mission.

7. Culture: Culture in a DAO encompasses the shared values, beliefs, norms, and practices that shape its members: some would call it the vibe. A DAO’s culture influences how the DAO operates, how decisions are made, and how members collaborate and communicate. Culture and community often mirror each other.

8. Capital: We’re in crypto, so capital primarily refers to financial assets, to cryptocurrencies. Yet in DAOs, capital can also refer to other resources such as human capital (skills and expertise), social capital (networks and relationships), and intellectual capital (knowledge and ideas).

9. Centralization: While DAOs work to be operationally decentralized, there still exist concentrations of power, control, and decision-making authority. DAOs often strive to use technology to minimize centralization to ensure more open and democratic operations.

10. Constraints: No surprise, constraints refer to the limitations or boundaries within which the DAO operates. These often include resource constraints like contributor numbers or budgets, but they can also include technological constraints, regulatory boundaries, or operational rules that bind the actions and decisions of the DAO.

This list is obviously not complete, and there are many other ‘C’ words that come readily to mind, let alone the other 25 letters of the English alphabet, but I’m hopeful this short list provides a catalyst to think about how we’re building and why we’re building it.

We Can Change the World

It’s true, we can change the world, and that is really what I’m trying to figure out – how to build DAOs that will thrive at scale. DAOs are laboratories for new ways of reimagining social relations — human relations — but we have to be certain that we understand what we’re building in order to create the kind of change that only comes through aligning human potential with opportunity.

Such alignment is where we will find the sweet spot: the paradigm shift we crave; the move towards a society of self-sovereign individuals no longer fully bound by centralized, hierarchical power structures.

These ten building blocks are barely a beginning, but they are helpful to understand some of the core building blocks, the colorful social legos, with which we are building the organizations of a farther-and-closer-than-you-think tomorrow. I’m certain that DAOs can create structures that align humans in ways that will absolutely change the world, but it’s up to us right now to make sure that we are focused on building systems that won’t just change the world, but will change the world for the better.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

Pfizer-backed DAO Launches Community-funded Biotech Firm

Author: James Hunt

🔑 Insights: VitaDAO, a decentralized organization focused on longevity research, has launched Matrix Biosciences, a biotech firm, through a collaboration with Dr. Vera Gorbunova from the University of Rochester’s Aging Research Center.

• VitaDAO provided an initial funding of $300,000 to Matrix Biosciences, with plans for additional funding through IP-NFT fractionalization.

• Matrix Biosciences aims to utilize the funds to develop cancer and aging-related treatments by studying hyaluronic acid-based compounds found in naked mole rats, known for their longevity and cancer resistance.

• VitaDAO is fronting the DeSci movement, which seeks to revolutionize research funding through crowdfunding initiatives and decentralized ownership, representing a shift away from traditional centralized approaches.

• The DAO boasts of a community size of over 10,000 members and has successfully funded 19 projects and deployed $4 million in capital to date.

Manufacturing Consensus

Author: Dryden Brown

🔑 Insights: The article provides an important perspective on the challenges and risks associated with the decentralization of crypto projects. It highlights the shift of power from Direct Leaders to Opinion Leaders and argues that this decentralization process can centralize power across the industry, making it more vulnerable to capture and attack.

• While crypto projects decentralize to transfer decision-making power to Token Holders, the shift often centralizes influence among Opinion Leaders. This centralization of power occurs due to the preference of voters to delegate decision-making to perceived higher-context Opinion Leaders.

• Premature decentralization can lead to Dead Player projects, where founders retire, creating a power vacuum and vulnerability to external influence.

• Decentralized projects, without strong Direct Leaders, face difficulties in making bold strategic decisions, leading to smaller outcomes and higher industry costs. Recruitment becomes harder, and potential recruits may opt to become founders instead, limiting the talent pool for established projects.

• The author advocates for a regulatory framework that allows tokenization without removing Direct Leaders, creating an environment where founders can retain leadership while benefiting from tokenization. This is crucial to fostering growth and reducing vulnerability to malicious actors leveraging decentralization.

Social Security for Web3 Work

Authors: Laura Lotti, Nick Houde, and Tara Merk

🔑 Insights: This article presents a preliminary exploration of the design and deployment of solidarity primitives for web3 social security. It proposes a modular framework to develop solidarity primitives addressing the three dimensions of security for DAO contributors: psychosocial stability, financial stability, and regulatory clarity.

• Building structural support around the talent that works on blockchain-based infrastructure is crucial to ensuring the ecosystem’s longevity and legitimacy, both internally and toward external stakeholders such as regulators and policymakers.

• Creating mechanisms that enable contributors across functional areas to receive stable and predictable income is key to retaining talent across market cycles. At minimum, stability requires contributors to be paid in fiat, stablecoins or other fiat equivalent.

• Regulatory uncertainty is an important distinguishing characteristic between DAO workers and traditional freelancing. While most freelancers face additional administrative overhead, the situation is even more complicated for web3 contributors given the lack of clarity around tokens legal status.

• Developing a solidarity primitive requires a few seemingly straightforward elements (membership structure, funding and distribution mechanism, purpose), these call for a concerted use of on-chain mechanisms, internal working norms, and extrinsic rules.

Designing Reward Systems for Web3 Governance

Author: Eliza Oak

🔑 Insights: The author explores the challenges and considerations involved in designing reward systems for online governance, with a particular focus on the comparison between reputation-based and token-based systems in web3.

• The historical wealth-based nature of political influence poses a challenge to transitioning towards merit-based governance. There is a need to prioritize contributions over wealth and connections.

• At the root of designing reward systems are two non-trivial questions: what should be rewarded and who gets rewarded? Web3 lets us design and implement rewards at scale and across contexts, opening possibilities for merit-based online governance.

• Reputation-based systems are considered more meritocratic, prioritizing long-term community alignment, while token-based systems offer scalability and liquidity, albeit with potential plutocratic dynamics.

• Exploring reputation-based governance and other ways to move beyond transferable token voting is an open and likely fruitful area for decentralized governance.

  ---

As enshrined in the BanklessDAO Constitution, “Bankless is a movement for pioneers seeking liberation from the tyranny of the traditional financial system. Going Bankless means adopting decentralized, permissionless, and censorship-resistant technology. Through these means, we will achieve financial self-sovereignty, security, and prosperity.”

As with the Bankless movement, decentralizing ownership and transparency of scientific assets, like “intellectual property, licensing rights, and ownership itself”, fosters innovation. Likewise, “self-sovereignty of digital assets will inherently accelerate the proliferation of scientific information.” If this sounds exciting to you (it should!) get involved with BanklessDAO’s new DeSci working group, the details for which can be found below.

As always, we conclude with a TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: flowscience, Chameleon, angelspeaks, Quilia, Warrior, Vi-Fi, Boluwatife, Kornekt, trewkat, siddhearta, HiroKennelly

This is an official newsletter of Bankless Publishing, a BanklessDAO-affiliated project. Please subscribe and share to help us grow our audience as we fulfill our mission to build user-friendly crypto onramps.

Subscribe now

Share

DeSci Goes Bankless

Author: flowscience

TL;DR

• The Bankless thesis extends to decentralized science (DeSci).

• Self-sovereignty over digital assets includes the products of scientific research and collaboration.

• Sign up for the BanklessDeSci Virtual Unconference!

What Is Science?

There are many different answers to this question. Let’s start by comparing two of them.

“The systematic observation of natural events and conditions in order to discover facts about them and to formulate laws and principles based on these facts. The organized body of knowledge that is derived from such observations and that can be verified or tested by further investigation.”

Academic Press Dictionary of Science & Technology

“Science alone of all the subjects contains within itself the lesson of the danger of belief in the infallibility of the greatest teachers in the preceding generation . . . As a matter of fact, I can also define science another way: Science is the belief in the ignorance of experts.”

Richard Feynman

I much prefer the second definition.

However, the first one highlights key elements of the scientific process that differentiate epistemically valid methods of testing a hypothesis from the extensive list of logical fallacies that create so many common misunderstandings of science in modern society.

“Real” science is based on the assumption that we are always wrong, the “null” hypothesis. Scientific observation relies on measurements external to ourselves. Objectivity and truth are the only goals when interpreting evidence.

At least, as close as we can get to the truth.

What Does It Mean to Decentralize Science?

Paradigm shifts in science are almost infinitely rare compared to the number of observations made on an annual basis. The modern world operates entirely because of advances made in our scientific understanding of the universe. That happens because science-based education has been incorporated into state-mandated education systems around the world; massively proliferating scientific knowledge as common knowledge.

Yet, most “end users'' of science remain entirely uninvolved in the process itself.

Science has traditionally been prohibitively expensive for the majority of the population. For the past several decades, there has been increased interest in so-called “citizen science” that often involves simple experiments which can be done by individuals with minimal training or background knowledge.

Even more recently, the “open-science” movement has followed alongside the open-source software movement. Increasing access to reproducible scientific data is growing in importance in the age of information. Knowledge itself is a universal public good.

Enter web3.

Bitcoin solved the Byzantine Generals Problem and provided the ability to verifiably own digital assets. Ethereum furthered this ability by enabling digital assets to be contracts, so called “smart contracts”, because the binding terms are automatically executed according to transparent and immutable code. Intellectual property, licensing rights, and ownership itself – these are all contracts that have been upheld by the rules of society to increase the incentive for private citizens to develop new technology. The conclusion is obvious: decentralizing ownership and transparency fosters innovation.

Self-sovereignty of digital assets will inherently accelerate the proliferation of scientific information.

The Origin of BanklessDeSci

BanklessDAO (the community of nearly 30k members) and BanklessHQ (the podcast with > 200K subscribers) have recently started showing broader interest in the DeSci movement. If you're not familiar with Bankless (either the podcast or the DAO), the general mission is to help more people express self-sovereignty through ownership of digital assets, helping people “go Bankless.”

The Bankless thesis naturally extends to DeSci because self-sovereignty of digital assets and transparency fosters innovation and the proliferation of information. Out of this inspiration, the BanklessDeSci working group spun up earlier this year from within BanklessDAO.

BanklessDeSci creates a pipeline for:

1. DeSci education for non-scientists, particularly BanklessDAO members.

2. Web3 and DeFi education for scientists (non-BanklessDAO members).

3. DeSci funding opportunities for scientists in BanklessDAO.

Who is BanklessDeSci?

1. Students and entrepreneurial scientists interested in web3.

2. Researchers and independent scientists seeking greater access to funding/publishing.

3. People who want to decentralize healthcare, biotech, and big tech in general.

4. Investors in web3 and science/tech.

BanklessDeSci is composed of a range of enthusiasts from both BanklessDAO and the broader DeSci community. We coordinate activities through a public chat group and hold weekly meetings open to anyone who wants to get involved. Join our Telegram group and say hello!

What’s Next?

We're planning to deliver on two goals in Q4 2023:

1. Create a "DeSci 101" lesson for Bankless Academy.

2. Host a 4-hr "Virtual Unconference" on Zoom either in the last week of November or first week of December.

An introductory “DeSci 101” lesson would be useful to increase awareness about DeSci and serve as an educational reference for members of the BanklessDAO community.

Why are we hosting a virtual #DeSci "Unconference"? Quite simply, it was the most Bankless thing we could think of. 🏴

“An unconference, also known as an EdCamp, is a participant-driven conference model that emerged in the early 2010s. It subverts the expert-centered structure of traditional conferences by prioritizing participant voices as leaders and decision makers. Unlike traditional conferences, attendees decide on the agenda, discussion topics, workshops, and even the time and venues. The informal and flexible program allows participants to suggest topics of their own interest and choose sessions accordingly. The event lives and dies by the participation of its attendees, who decide what topics will be discussed and convene the individual breakout sessions.” - ChatGPT

If you're interested in participating in the first ever BanklessDeSci Virtual Unconference as a session facilitator, attendee/participant, or sponsor, please fill out this form.

Stay tuned for more #DeSci. 🧪🏴

Resources to Get Started

1. Learn the basics of DeSci from the Ethereum Foundation.

2. Listen to the DeScientralized Mini-Series on Crypto Sapiens.

3. Watch the BanklessHQ Interview Series at Zuzalu.

4. Explore the Awesome DeSci Repository for a community-curated list of resources.

5. Recent Press: Editorial in Nature Biotech and Brian Armstrong at SciCon 2023.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem:

The DAO Playbook (v1)

Author: 0xJustice.eth

🔑 Insights: DAOs have been around for some time and although more people are getting familiar with these organizations, most people don’t understand how to start one or how they work. In this article, the author talks about his view of DAOs, what they are, and how they operate.

• DAOs are decentralized platforms with governance structures where individuals own and collectively control digital assets. They run on smart contracts and channel capital towards its preservation and improvement.

• DAOs are viewed as tokenized internet communities that pool funds to achieve a common goal or make a physical impact. These communities surpass the traditional internet communities as everyone gets a say in the appropriation of funds.

• Not everyone who bought into the vision of a DAO can do the commensurate work. As a result, some technical work is outsourced to builders to fill the operational gap.

Machiavelli for DAOs: Principles for Fixing Decentralized Governance (Part 1)

Author: Miles Jennings

🔑 Insights: Whatever you make of the Renaissance-era Italian philosopher and political operator Niccolo Machiavelli, many of the principles explored in his writings about leadership and the preservation of political liberty remain relevant today. The author believes several Machiavellian principles can be applied to fix decentralized governance in web3.

• Decentralized governance enables web3 protocols to decentralize and achieve credible neutrality.

• Given the practical challenges associated with direct democracy, many DAOs have turned to representative democracy to enhance their decentralized governance.

• The Machiavellian principles begin with a belief that an objective science of politics and society is possible and that the primary theme is the struggle for social power.

• While the right to public opposition is alive and well in web3, DAOs are sometimes unable to foster healthy opposition when token holdings aren’t evenly spread across competing perspectives.

• Empowering any parties within a decentralized system could undermine the very decentralization of such systems as it could lead to potentially significant information asymmetries, and increase the vulnerability of those systems to governance attacks.

Machiavelli for DAOs: Designing Effective Decentralized Governance (Part 2)

Author: Miles Jennings

🔑 Insights: This companion piece to Part 1 above discusses the application of Machiavellian principles to decentralized governance in web3, aiming to address current shortcomings in emerging protocols and DAOs. The piece also provides design considerations, strategies, and tactics for implementation, using the hypothetical example of a web3 marketplace protocol called "Blockzaar.”

• Designing a DAO requires identifying different stakeholder groups, including users, apps, developers, and investors. Understanding stakeholder incentives is crucial because a successful DAO depends on these groups being active and economically incentivized.

• Credible neutrality and minimal discrimination in DAOs can be achieved by prioritizing governance minimization, user choice in decision making, and avoiding forking. This results in a competitive ecosystem.

• In web3 protocols with minimal governance, effective decision making requires bi-cameral governance, with a stakeholder council and delegate council. This ensures a balance of power and interests.

• DAOs can ensure dynamic leadership by embracing the Machiavellian principle of constant upheaval, implementing strategies like term limits and stakeholder removal, and enabling direct elections. This promotes community participation and addresses issues in token-based voting systems.

• To make DAOs more accountable, limit the leadership class, build a client ecosystem, regularly remove delegates, and implement lockup mechanisms. These approaches support minimal governance, diverse stakeholders, and stakeholder capitalism.

How SubDAOs Are Making a Bear Market Comeback

Author: DeFi Dave

🔑 Insights: The article provides an in-depth look at how subDAOs can help decentralized protocols scale governance and evolve through market cycles. The key insight is that subDAOs enable valuable experimentation and decentralization if well-designed with accountability.

• In bear markets, subDAOs allow innovation in parallel to the main DAO. They can take on specialized objectives and try new tokenomics and structures.

• Bootstrapping subDAOs with tokens and funding gives autonomy, but accountability via milestones and stakeholder relationships remains critical.

• Politicking to secure subDAO funding requires tact, but the process shouldn't distract from subDAO objectives or alienate talent.

• Bear market challenges make subDAO experimentation timely. Testing new designs now will strengthen protocols for the future.

• Overall, subDAOs with clear goals, accountability measures, and empowered contributors can fulfill the promises of governance decentralization. This benefits protocols in any market climate.

Hiring a Web3 Community Manager

Author: Jakerr.eth

🔑 Insights: In web3, building a strong community around your project is of paramount importance. A dedicated community manager plays a crucial role in nurturing this community and bridging the gap between the core team and users, ultimately contributing to the success of the project.

• Effective community management involves creating a community alongside your users, not managing it for them. Empower community members to become leaders themselves, solving challenges together.

• In the web3 landscape, community isn't an afterthought but a core component. Communities can own a part of the brand, making their role vital for the project's sustainability and success.

• A robust community adds legitimacy and credibility to your project, attracting more developers and partnerships. This dynamic is critical in web3 compared to web2.

• When and who to hire? The timing of hiring a community manager depends on your project's nature and goals. They serve as a bridge between the core team and the community, and their specific role varies based on the sector of web3, such as NFT projects, DeFi, or protocols.

The role of a community manager in web3 and crypto projects is instrumental in fostering strong, engaged communities and contributing to project success. The right candidate possesses a blend of internet nativeness, communication skills, and relevant professional expertise. The rapidly evolving crypto industry necessitates adaptation of community management frameworks to leverage its unique potential.

As the author writes, "We also proposed a mental model where DeSci is not a “next step” in the history of science, but rather an alternative to help science develop new models to do research in a meaningful way..." Dive straight into the editorial to discover more about how DeSci utilizes blockchain technology to build a more efficient and inclusive scientific ecosystem.

Speaking of building, if you're in Dubai, then you shouldn't miss out on the amazing BuidlDubai event featuring builders, developers, and thought leaders in the industry.

Our Ecosystem Takes this week features insightful articles on DAO governance and more. Despite the challenges DAOs face with governance, it's good to see new measures being rolled out by DAOs like Nouns DAO in a bid to advance progress and make the governance system work better.

This issue is fully packed and loaded to keep you in the know about the latest developments, ensuring you stay updated with the current state of the DAOs.

Contributors: angelspeaks, Quilia, Warrior, Vi-Fi, Boluwatife, Francisco Díaz, Kornekt, trewkat, siddhearta, HiroKennelly

This is an official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

A Mental Model to Understand Decentralized Science (DeSci)

by Francisco Díaz, from talentDAO

In the early 2000s, a group of scientists started questioning the status quo of science and the way it was funded, executed, and how its knowledge was distributed. Those people were worried about modern science’s many flaws including lack of transparency, replication crisis, hard-to-access data, incentives that promoted quantity over quality in academic papers and, in general, pointing out the many aspects where science was being captured by journals, universities, and other centralized institutions.

This group formed a movement to promote open and transparent science, which was called Science 2.0 or Open Science (Mirowski, 2018). The promise was to create a series of practices and the development of new infrastructure supported by the introduction of the internet and information technologies. However, this movement has not been able to fix science as intended, and even though it was received with a lot of enthusiasm by researchers, institutions, and States, the scientific system keeps suffering from the same problems.

Twenty years after the emergence of open science, a new movement comes into the scene with new technological solutions and organizational frameworks. Using distributed ledger technologies like blockchain and experimenting with decentralized autonomous organizations (DAOs), this “web3” based movement called Decentralized Science or DeSci is consolidating as a new alternative for the scientific system.

This article delves into the key features of DeSci, its brief history, context, and recent implementations. We also offer a mental model to better understand how DeSci fits into the scientific system, and how it will become an alternative for researchers rather than an evolution or Science 3.0. As we’ll see here, we prefer to see DeSci as a new player that will collaborate with traditional science and open science. We’ll also see that DeSci is likely to face the same problems that science has faced so far.

But first, we need to understand what is wrong with science today and where open science fell short in its attempt to fix it.

Traditional Science vs. Open Science

Science is important because it allows us to come up with solutions to the different needs and challenges that societies face. However, there are challenges that become obstacles to achieving an efficient, accessible, and transparent scientific landscape. Let’s explore some main issues:

1. Reputation economy: academic researchers are incentivized to publish a high volume of papers instead of focusing on quality of work. This is because reputation systems like H-index prioritize “impact” based on quantitative metrics, and academic researchers depend on these systems to get funded and keep their jobs at universities (da Silva & da Silveira, 2019).

2. Research Journal Oligopoly: only a handful of publishing editorials own most of the top research journals, and they request fees over 10,000 USD for publishing, giving them a huge profit margin. The top five publishers accounted for 48.6% of journals and 54.6% of articles in 2020 (WIPO, 2020).

3. Data Access: it is hard to access data since a lot of papers are behind a paywall. Also, a lot of data is not being published in an open or transparent way, making replication harder. This keeps researchers with less resources away from important information needed to run other studies (Nagaraj, et. al, 2020).

4. Replication crisis: many scientific studies are difficult or impossible to reproduce. There are many reasons for this including publication bias, poor standards, questionable research practices and fraud, and a prioritization for novelty over consistent data. This crisis is undermining credibility in science and makes cross-pollination between peers harder.

All these issues have been pointed out for a while by the research community. The Open Science movement was born to address these issues and reform the scientific system in the early 2000s. Even though it is considered an umbrella term, we can say that Open Science is a family of different schools of thought that tried to form a new framework for the scientific exercise. From open access to open data, to “citizen science” that aims to make science participative.

Since the inception of this movement, it has only grown in popularity among different research communities and has been adopted as a framework for many nations, especially in Europe. In 2021, UNESCO member states signed unanimously to adopt a series of recommendations regarding Open science development, yet with the difficulty that the recommendations signal what must be done, not how (Cudennec et al., 2022). This takes us to another problem: Open Science is a framework for a more transparent and accessible science but is no silver bullet. Twenty years later, the scientific system still faces the same problems.

Let’s see where Open Science fell short:

1. Replication: Open Science standards have been broadly adopted, but open research doesn’t equal good research. And even with open data and transparent methodologies, many studies can’t be replicated (Zong et al., 2023).

2. “Open Washing”: unfortunately, some researchers weaved the Open Science flag just to legitimate their studies, without truly adopting the practices for an open and transparent research (Song et al., 2022).

3. Science neoliberalism: there are critics of the Open Science movement like Mirowski (2018) that accuse it of being a model that creates a way to market science with “Platform Capitalism” and the sub-division of research tasks so it can be done by junior or least experienced researchers at a lower cost or for free.

4. Incentives: Open Science still has not found a way to create better incentives. Badges are good for virtue signaling and social media reach, but it doesn't necessarily help with quality or replication (Zong et al., 2023). Intellectual property and patents are another issue because it is hard to make them open without affecting research incentives.

The DeSci Proposal

Realizing that the Open Science ethos is not enough to solve the major challenges of science, a group of researchers that got familiar with blockchain technology proposed to build on top of these public chains to create a truly transparent, open, borderless, and tamper-proof scientific movement called Decentralized Science or DeSci. We can summarize the DeSci proposal on the infrastructure side and the organizational side (Ding et al., 2022).

Infrastructure: it contemplates the use of Distributed Ledger Technologies (DLT) — public blockchains like Ethereum to make use of the decentralized computer system to run analysis, store data, and distribute value. By running the process “on-chain”, the community can follow up the research and have a common space to share results. DLT creates new ways for researchers to fund, incentivize, and publish scientific work. These advantages is summarized in the following table:

Organization: DLT also enabled the emergence of decentralized autonomous organizations (DAOs). This is a new type of organization that experiments with DLT to run processes on-chain, using smart contracts to automate processes and coding governance systems that fit the necessities of every community. DeSci is adopting this framework since it allows researchers outside traditional organizations to come together, collaborate, and get compensated in an open and transparent way.

We can see then that DeSci takes inspiration from the principles of decentralization to empower individual researchers and smaller scientific communities by enabling them to conduct experiments, share data, and publish findings without relying on traditional research institutions. The use of different kinds of tokens is at the base level, which can be used to govern the DeSci group, compensate contributions, fund new research projects, and signal reputation for meaningful research efforts. In the last case, the use of non-transferable tokens can be used as badges that can be seen by anyone with access to the blockchain. Tokens can also be used to wrap intellectual property into smart contracts, in a way that investors, scientists, and other stakeholders can have a share of this digital intellectual property (Clemens Ortlepp, 2021).

The funding model is important since it encourages more researchers to collaborate without intermediaries, including those researchers outside academic institutions or established institutions to participate in scientific endeavors. This also enables research that usually doesn’t get funding to receive money from anyone in the world to pursue new studies on themes like longevity or women's health.

Examples

DeSci projects cover biological science (Bischof et al., 2022), social sciences (Wocken & Díaz, 2023), medicine (Subramanian, 2023), climate (Horton et al., 2023), AI (Miao et al., 2023), and many other fields. The next three examples will be covered with more detail to better understand the reach of the DeSci development:

• VitaDAO: a community of researchers, investors, and enthusiasts formed a DAO to raise funds for research on longevity. They have funded more than 20 projects with over 4 million USD deployed. The VITA token is at the center of the DAO for proposals and general governance of the organization.

• Molecule: with more than 12 projects funded and 1.95 million USD deployed, Molecule has developed a marketplace for research-related intellectual property. They developed the IP-NFT which is a way to represent intellectual property on-chain, creating a decentralized market that can raise funds directly for intellectual property instead of having to fund intermediaries of the research process.

• DeSci Labs: as we mentioned in this article, infrastructure is still a part of the puzzle that is missing to achieve a truly open and transparent research process. DeSci Labs is building such infrastructure to transform how scientific outputs are stored, accessed, assessed, and tracked. A demo of one of their products — DeSci Nodes — can be seen in this video.

Challenges

Not every DeSci project is a DAO. Not every decentralized research is fully on chain. As an emergent institution in the scientific landscape, we can consider DeSci as an experiment to use blockchain technology and the decentralization ethos to think about new solutions and frameworks to achieve meaningful research. Yet, it is almost certain that DeSci will face similar problems as Traditional and Open science because technology alone cannot fix all the issues previously mentioned. You can’t always code your way out of problems.

The tendency to create DAOs or DAO-like institutions from the beginning could be an obstacle rather than a useful tool since DAOs are still in the experimentation phase. As seen in some existing research (Ding et al., 2022; Wocken & Díaz, 2023), many organizations suffered from “going too DAO too fast” because they must deal with governance, token issuance, treasury management, and other tasks on chain that could have been done in an easier way if they opted to run the organization off chain.

Badges and onchain certificates are another issue since recent literature (Lee et al., 2023; Zong et al., 2023) show that these instruments are good to enhance credibility but don't necessarily lead to better research standards. Putting these certificates on chain could benefit junior researchers or contributors outside traditional organizations, but there’s still a long way to go to build a common standard of certificates to value these badges.

Being based on blockchain technology is another friction point since many DeSci leaders have mentioned that it is hard to onboard scientists and promote project efforts because web3 in general has a bad reputation (Magennis et al., 2023). The skepticism about the technology can make an additional barrier to entry, especially in sociodemographic groups with less adoption.

A New Player Joins the Scene

We have introduced the key aspects of DeSci and the challenges that will face in the near future. Blockchain technology opens the door for new funding models, organization types, and incentive models. As a new player in the scientific system, we’ll still have to see what new developments DeSci can bring to solve the old challenges that have deteriorated trust in science, and how these innovations will be received by the general scientific community.

We also proposed a mental model where DeSci is not a “next step” in the history of science, but rather an alternative to help science develop new models to do research in a meaningful way. Let’s not think about Traditional/Open/Decentralized science as:

❌ Science 1.0   →   Science 2.0   →   Science 3.0 ❌

Rather, we should look at the many players that are coupled with the scientific system and how they all play an important role. Science is not only developed by its scientists, but also by the communities that support their projects with funding, legal guidance, and values sharing. And thanks to the decentralized ethos and technology, more people than ever can now support scientific efforts in an open and permissionless way.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

DAO Governance and AI

Author: StableLab

🔑 Insights: The convergence of Blockchain and Artificial Intelligence (AI) is reshaping governance through decentralized autonomous organizations (DAOs), ushering in an era of intelligent, decentralized decision-making.

• Blockchain and DAOs are revolutionizing traditional centralized governance structures, making decision-making more inclusive and less prone to corruption.

• AI enhances DAOs by automating tasks, summarizing discussions, allocating resources, and enabling cross-DAO coordination, leading to "super governance.”

• DAOs democratize AI development by involving a broader range of stakeholders, ensuring equitable access to computational resources, and facilitating ethical oversight.

• The integration of AI into DAOs raises concerns about algorithmic bias, loss of human oversight, and new vulnerabilities to malicious actors, highlighting the need for robust ethical frameworks.

The synergy between DAOs and AI offers the potential for a new social contract, reshaping governance and society itself. To harness their benefits while mitigating risks, we must tread carefully, establishing evolving ethical guidelines to navigate this transformative journey.

Nouns Governor

Authors: Davidbrai and Eladmallel (verbs)

🔑 Insights: This article focuses on designing a new version of Nouns DAO in collaboration with the community. The key highlight is the transition from the Compound Governor Bravo to the new Nouns Governor, which emphasizes NFTs voting instead of wallets. It delves into the problems that NFT voting can address and the potential opportunities it may create.

• The introduction of NFT voting in the new Nouns DAO version aims to protect the minority from attacks by the majority, particularly concerning the Fork mechanism. This allows the minority to fork away without the majority following them in the event of an attack.

• NFT voting is also seen as a solution to the long-standing delegate override problem, as it would allow token holders to exercise their voting rights directly. This is important for security reasons, as it could mitigate the risks of governance pools.

• NFT voting aims to improve user experience by allowing new users to immediately participate in voting after purchasing a Noun. It also aims to reduce confusion and increase granularity, allowing subDAOs to split their votes and whales to delegate votes at a single-Noun level.

• Compound Bravo snapshots are an effective way to ensure the integrity of NFT-based governance by preventing double voting and flashloan voting. This is achieved by tracking NFT votes and requiring a minimum waiting period between transfers and voting.

• A variety of existing solutions address problems in NFT governance, but some unique challenges remain. Several solutions, including those from Llama, OpenZeppelin, and Aave, are being considered for implementation

Are DAOs Overhyped and Unworkable? Lessons From the Front Lines

Author: Donovan Choy

🔑 Insights: Different people have diverse perspectives on the true definition of a DAO. Though their opinions might differ, one thing remains constant: DAO governance is a work in progress. This article looks into governance matters and proposed solutions.

• The most widespread problem of DAO governance is voter apathy. This happens when voters fail to turn up on time or lack the knowledge to make informed decisions.

• Delegation voting has been embraced by DAOs as a way to scale faster without having to pass all decisions through months of debate. Though it has its own faults, it solves the problem of insufficient decentralization.

• DAOs are fundamentally profit-oriented organizations meaning they can’t forget about revenue and growth. So, to make more informed decisions that affect the DAO positively, some decisions are centralized and left in the hands of experts.

DAO governance is not an easy feat to achieve, and although it will take several years to get optimal results, its core values are worth striving for.

Forks Are Good

Author: Jacob

🔑 Insights: The article provides a thoughtful analysis of the significance of forking in blockchain protocols. It argues that forks should be seen not as bugs, but as features that drive progress. Forks enable open competition between different visions and approaches within a decentralized network. Rather than a flaw, they are a form of transparent innovation.

• Forking was intentionally designed into Nouns' governance. This makes it an explicit feature any holder can utilize.

• Nouns forks allow equitable exits, with exiters taking a proportional share of treasury funds. This reduces centralization risks.

• Noun holders must deeply examine their convictions and decisively choose one fork, heightening discernment. This also creates real competition between forked instances.

• Both original and forked Nouns share ownership of the core meme/art. But forked versions can diverge and experiment.

Overall, the author compellingly states that Nouns' novel embrace of forking establishes a new standard for DAO governance. It accelerates evolution through internal competition. While this might just be the foundation, there are exciting times ahead!

The Casino on Mars

Author: Matt Huang

🔑 Insights: It’s useful to think of crypto as a new planet that’s being settled. While Skeptics see a desolate planet without purpose, Optimists see the planet’s potential: a blank slate on which we can build an upgraded financial system and internet platform. The most reliable way to figure this out is to disregard the external environment of skepticism or hype and to think independently; look past the speculative activity toward what substantive builders are building and what real people are using.

• Today’s speculative frenzy in crypto is attracting the settlers and catalyzing the infrastructure necessary to turn a barren planet into a thriving crypto civilization.

• Crypto is rapidly becoming more useful to more people. Crypto money is useful at the low end, speculative at the high end and it is improving fast.

• Crypto can do for money, finance, and digital property what the internet did for information and media.

• Speculation has also been critical to the growth of crypto as a decentralized financial system. Many financial products have so-called “utility” on one side of the transaction but require speculation to fulfill the other side.

• Building social consensus around crypto can be even more challenging than growing a network effect around a communication protocol or a social network.

BuidlDubai

Join an event for builders in Dubai, dedicated to Account Abstraction, L2s, and Infrastructure. Experience an engaging and friendly atmosphere as builders gather in sunny Dubai 🇦🇪 and connect with all top thought leaders in the web3 space.

Organized by Francesco Andreoli🦊, DevRel at ConsenSys and Mirko Garozzo, Dev Evangelist at MetaMask.

Immerse yourself in insightful discussions with the biggest brains in the wallet and EIP-4337 space, broaden your network, and gain valuable industry connections. The event promises to be filled with developer insights and an opportunity for valuable networking. 🧠 🤝

Details:

📅 Date: 5th October

⏰ Time: 5 PM - 9 PM

📍 Venue: Register to see address

🎪 Free entry

Subscribe now

It’s a little unusual for the editorial not to focus squarely on DAOs and/or the DAO ecosystem, but as communities that are made up of individuals, DAOs are affected by bear markets just as much, if not more, than their contributors.

As usual, there are ecosystem articles to explore further and a look at some of the new tools available to DAOs, as well as a spotlight on Aragon DAO. You are forgiven if you’re today years old and just finding out that the Aragon Network Token is known as ANT; the beauty of this space is that we’re all learning new information all the time!

For those wanting to learn more of the acronyms floating around crypto, don’t miss the Essential Web3 Glossary article featured below. Put some time aside to read the thought-provoking piece on communities and don’t miss 0xJustice’s elegant take on the four pivotal areas of disintermediation: communications, currency, contracts, and companies. It’s a must-read for anyone interested in the current state of the DAOs.

Contributors: Josh Du, Azeem Khan, Tonytad, angelspeaks, KingIBK, Warrior, Boluwatife, Kornekt, trewkat, siddhearta, HiroKennelly

This is an official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

Bear Market Best Practices

Author: Josh Du & Azeem Khan

If you've managed to stick with the world of crypto through a year of unrelenting hacks, regulatory curveballs, and portfolios awash in red, give yourself some credit. You're either a masochist or a true believer — possibly both. As for why you're still here, perhaps it's resilience, savvy, or a mixture of the two. Whatever the reason, you're in a unique position to capitalize on the opportunities that bear markets often present. Before we delve into these, it's important to note: always do your own research. The insights shared here should never replace tailored financial advice. Still, as professionals actively navigating this tumultuous landscape, we believe these bear market best practices are crucial, and we wanted to share some of our tips for being able to do just that.

Understanding the Crypto Landscape

Let's be absolutely clear: whether you're a seasoned web3 investor or a Wall Street savant, cryptocurrencies warrant your attention as part of a diversified portfolio. Historically speaking, we've seen this asset class recover remarkably well from 80%-90% drops in value. Not only do they bounce back each time, but they also reach new all-time highs. That's a level of resilience you can't ignore.

Now, onto the cycle of bear markets. If you're looking for stability, you won't find it here, and that's not necessarily a bad thing. Bear markets in crypto are recurrent, and like winter they’re harsh, but vital for the ecosystem. We've already survived a slew of crashes, each followed by a healthier recovery, topping previous records. This isn't the speculation-driven bubble of the past years though. We are standing on the precipice of concrete developments, with projects touching everything from DeFi protocols to NFT-based gaming experiences and even Real World Assets being tokenized. We've moved from the realm of 'what could be' to 'what is,' and that's a leap forward that is worth taking a moment to appreciate.

Let's also appreciate the wisdom of the ancient Persian adage, "This too shall pass". In the crypto universe, we should all have these words printed and framed on our walls. Why? Because crypto is the epitome of antifragility. Each crash, each scam, and each piece of FUD (Fear, Uncertainty, and Doubt) only serve to strengthen this ecosystem. A bottom-up structure, as exemplified by the web3 community, will always outshine a top-down system in terms of resilience, especially during bear markets. The investors and developers who remain are the ones creating infrastructure that can weather even the harshest of storms.

Lastly, but by no means least, we have to talk about volatility. It scares away many traditional investors, but in a nascent space like crypto, volatility is as natural as breathing. Here's the kicker: it's also a double-edged sword. You stand to lose, but you can also gain in exponential multiples. Those who understand this duality are the ones who ride the waves successfully; those who don't will become the subject of cautionary tales. Learning to surf these financial waves may involve a few wipeouts, but the ones who stick around are the ones who ride the biggest waves.

Best Practices For Weathering Bear Markets

Whether you're new to the crypto world or a seasoned investor, bear markets present unique challenges and opportunities. The practices outlined below are time-tested strategies that apply to portfolios of all sizes, from the fledgling "guppy" to the seasoned "whale."

• The Virtue of Patience

  Firstly, and perhaps most fundamentally, patience is your strongest ally in a bear market. Contrarian investors, who tend to swim against the current, find bear markets particularly advantageous. These markets favor those with a long-term investment horizon and a strong belief in the underlying technology or asset they are backing. While bull markets may be playgrounds for trend-chasing traders, bear markets are the domain of the patient investor.

• The Art of Being Selective

  The second tenet of bear-market investing is selectivity. Unlike in a bull market, where assets can be overvalued due to intense competition among buyers, bear markets offer the luxury of choice at discounted rates. This is the moment to be highly selective in allocating your capital. Distinguish between assets that have enduring value and those that are merely experiencing a temporary dip. Quality always rebounds; mediocrity seldom does.

• Risk Management: The Unseen Anchor

  Though it may sound paradoxical, being risk-averse is essential in both bear and bull markets. Effective risk management doesn't mean avoiding all risks, but rather understanding and mitigating them. If an investment seems too good to be true, it probably is. Leverage, despite its allure and the significant returns it promises, can be a perilous game, especially if you're not an expert. Remember, your primary goal is the preservation of capital. Every investment should be examined through the lens of this ultimate objective.

• Time: The Underutilized Asset

  Lastly, bear markets offer something just as valuable as financial return — time. With reduced trading activity, market participants often find themselves with an abundance of time, a non-renewable resource that can be invested wisely. Whether it's learning new trading strategies, researching emerging technologies, or building your own project, using this time productively can yield dividends that pay off during the next market upswing.

These foundational principles are not quick fixes but are aimed at ensuring you're not just surviving the bear market but thriving in it. By adhering to these practices, you'll be better positioned when the market cycle inevitably shifts.

If all else fails, just remember that year-to-date, Bitcoin and Ethereum have significantly outperformed other asset classes as can be seen in the image below.

Lights At The End of The Tunnel

Navigating through the foggy conditions of a bear market can be daunting, but it's crucial to remember that every tunnel has a light at the end of it. Several key catalysts are emerging that could significantly influence the crypto market's trajectory in the coming months and years.

• The End of Interest Rate Hikes: The market has been in a state of unease ever since the Consumer Price Index (CPI) began signaling inflationary pressures, prompting a cycle of interest rate hikes. However, recent data suggests a stabilization in the CPI, leading to optimism that the cycle of rate increases could be nearing its end. A stable or falling interest rate environment could spell relief for all asset classes, including cryptocurrencies.

• Regulatory Clarity on the Horizon: The United States' Securities and Exchange Commission (SEC) has been a critical player in shaping the crypto landscape. However, recent developments such as the Ripple settlement and Grayscale's victory over the SEC in the Bitcoin Spot ETF case are heartening. These events could be precursors to a more crypto-friendly regulatory environment, which is essential for both retail and institutional investment.

• ETF Approvals Could Be a Game Changer: The SEC has delayed decisions on multiple Bitcoin spot exchange-traded fund (ETF) applications from industry titans such as Blackrock, Wisdom Tree, Invesco Galaxy, and others. If approved, these ETFs could bring a flood of institutional money into the space, vastly increasing liquidity and potentially setting off a new bull run.

• The Imminent Bitcoin Halving: An event programmed into Bitcoin's code, the next Bitcoin halving is due soon. This event reduces the Bitcoin block reward, effectively lowering the rate of new Bitcoin creation. Halvings have historically served as catalysts for bullish market activity due to the supply reduction and increased demand.

• Global Adoption and Acceptance: Though not immediate, the continuous efforts towards crypto adoption globally could serve as a long-term catalyst. These range from crypto being used for remittances in emerging markets to its acceptance by major e-commerce platforms. Moves like PayPal getting into the stablecoin market don’t seem to be priced into the market yet.

So, as we navigate through the current bear market, it’s essential to keep an eye on these potential catalysts. Each has its own timeline and speculative risks, but together they offer a compelling case for renewed optimism in the crypto market.

Regulated Onramp Channels Being Established in Hong Kong

The Hong Kong government has been very public about their intention of making the city the world’s web3 hub, with multiple initiatives already launched over the past year. In fact, implementation is already underway. Just a month ago, Hong Kong granted licenses to the first regulated crypto exchange catering to retails, with the ability to on/offramp fiat directly from banks.

These are the first-ever legal and regulated onramp channels in the entire Greater China for retail investors, paving the way for capital inflows from investors who may have been put off by the recent troubles that have rocked crypto exchanges.

In addition, the government has stated their intention to launch HKD stablecoins as soon as next year, making it even easier to onboard additional users. Leading all of this is the recently setup Web3 Task Force headed by the HK Financial Secretary himself. Suffice to say that Hong Kong is diligently building in the bear market to help promote web3 in the region

Striking the Balance Between Caution and Optimism

In conclusion, remember that this article is not intended as financial advice—always do your own research (DYOR) before making any investment decisions. The core principles to guide you through a bear market — patience, selectivity, risk management, and wise investment of your time — are designed not just for survival but for long-term success. While the current market may seem like an endless downward spiral, adhering to these principles will position you well for when the tide turns. While some indicators suggest that the bearish phase might be nearing its end, a longer bear market can actually be an advantage. It offers more time to reassess, learn, and allocate your resources optimally for when the upswing inevitably comes.

Josh is Animoca Brands’ Head of Digital Assets, responsible for managing Animoca’s digital asset treasury, balance sheet optimization and yielding activities, as well as group market making and trading operations. Animoca Brands is a global leader in gamification and blockchain with a large portfolio of over 450 investments and with the mission to advance digital property rights and contribute to building the open metaverse. Prior to Animoca, Josh’s background includes more than 15 years as an asset manager in traditional finance having work at both hedge funds as well as investment banks like Morgan Stanely.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

The Essential Web3 Glossary

Author: beejorama

🔑 Insights: Beginning your journey in crypto can be daunting because of the strange new terms and abbreviations. If you’re finding it hard to keep up and communicate in the space then this glossary is for you. The author has carefully curated a large and diverse array of terms to get you up to speed and converse like an OG.

• Blockchain: A decentralized digital ledger.

• AMA: Ask Me Anything, a Q&A format often used in crypto communities.

• Altcoin, Shitcoin, Memecoin: Various types of cryptocurrencies, often with humorous or negative connotations.

• Whitewashing: Buying and selling to oneself to give the appearance of high trading volume.

• Dutch Auction: An auction in which the item is initially offered at a high price, then lowered until a participant accepts.

The Last Throes of Leviathan

Author: 0xJustice.eth

🔑 Insights: The author discusses the concept of decentralisation and its potential to transform traditional power structures, particularly the role of the state. He emphasises that decentralisation is not an end in itself but aims to eliminate intermediaries and prevent the exploitability of valuable systems.

• The article identifies four critical areas of disintermediation: communications, currency, contracts, and companies.

• The decentralisation of communications, starting with the Internet, has democratised data and information sharing, challenging the state's control over communication.

• As exemplified by bitcoin, decentralised currency has separated money from state control, disrupting the traditional financial order.

• The introduction of smart contracts has revolutionised contract enforcement and coordination, reducing the need for intermediaries like governments and courts.

• DAOs enable shared ownership and control without intermediaries, fundamentally altering the concepts of joint stock ownership and corporate registration.

Redefining Incentivisation With KPI Token Campaigns

Author: Carrot

🔑 Insights: Carrot offers an efficient way to align token emissions with tangible project goals. It is more than just a platform, it’s a new way of thinking about incentivization and community growth.

• Carrot’s approach discourages farming and dumping, practices that can destabilize token value and negatively impact project health.

• Each KPI token campaign starts with a clearly defined goal which is translated into a measurable condition. Upon reaching the goal, rewards, represented by KPI tokens are given out to participants which signifies a claim to all or part of the collateral based on the degree of goal attainment.

• Through Carrot, users are incentivized to contribute meaningfully to the project’s goals, while projects benefit from increased engagement and loyalty.

Secret Societies, Network States, Burning Man, Zuzalu, and More: Thoughts on New Political Communities

Author: Matt Prewitt

🔑 Insights: The author argues that constructing new, intentional communities is vital for social progress, but it must be done responsibly and in relationship with the broader society. The article further expands on these points:

• New community initiatives aim to create alternatives to mainstream culture, but can go wrong if driven solely by isolationist or escapist impulses.

• Social progress requires advancing techniques for expanding social coherence and shared values, just as we advance other technologies.

• The author suggests that communities require elements like high exit costs, shared knowledge, and mutual vulnerability to thrive, and proposes two ideas to experiment with: unsecured trust and circular formal authority structures.

• Responsible community experimentation threads the needle between closed-off affinity groups and unchecked individualistic escape.

New Standards for Onchain Engagement

Author: 0xJustice.eth

🔑 Insights: This article introduces GroupOS by Station Express, a DAO launcher that aims to enhance engagement and user experience through the use of new token standards and Polygon's scaling technology. The article highlights the significance of DAO tooling as a core business infrastructure for the 21st century.

• GroupOS enables the integration of the principles of empowerment and decentralization into both DAOs and traditional businesses, which can increase engagement and resilience as seen in the popularity of ESOPs and crypto loyalty programs.

• GroupOS benefits from Polygon's strategic advantages as a business-oriented Ethereum scaling solution. Polygon offers secure transactions, shared liquidity, and scalability, making it an ideal platform for major enterprises.

• This new platform introduces two standards, Token Bound Accounts (TBAs) and Account Abstraction, that enhance NFTs and user-controlled accounts on Ethereum. TBAs empower NFTs with smart contract capabilities, while Account Abstraction transforms user-controlled accounts into Smart Accounts.

DAO Spotlight

Aragon DAO was founded in November 2020 and has more than 300,000 community members to date. Running on the Ethereum blockchain, Aragon is a platform that allows users to create and manage their DAOs. It provides a set of tools and templates that make it easy to set up a DAO, as well as a range of governance features that allow members to vote on proposals and make decisions about the DAO’s operations.

Flexibility is one of the key features of Aragon. It can be used to create a wide range of DAOs, from small, tightly-knit communities to large-scale organizations. It is trustless, permissionless, and transparent. Aragon is highly scalable, it can handle a large number of transactions without slowing down or becoming congested. Due to their open source code, the platform is secure as it is being audited by different people to remove vulnerabilities and bugs.

At the heart of Aragon is its token, ANT, which is used to pay for transactions on the platform. ANT holders have the right to vote on proposals and participate in the governance of the network.

To create a DAO on Aragon, you first need to create a proposal that contains all the details of your DAO, including its rules, structure, and purpose. Once your proposal is approved by the network, your DAO will be created and you’ll be able to start using it. Now, once your DAO is up and running, you can start managing it using the tools provided by Aragon: Aragon Court to resolve disputes, the Aragon Voice to vote on proposals, Aragon Nest to fund teams, and Aragon Client to build and manage DAOs.

Visit the Aragon website to learn more, and follow them on X.

This post does not contain financial advice, only educational information. By reading this article, you agree and affirm the above, as well as that you are not being solicited to make a financial decision, and that you in no way are receiving any fiduciary projection, promise, or tacit inference of your ability to achieve financial gains.

Rune Christianson, co-founder of MakerDAO, recently came back to the protocol with an ambitious proposal to fix MakerDAO governance by dissolving much of the current structure at Maker, and instead remaking it into an organization reliant on subDAOs. As siddhearta writes this week, “Think of subDAOs as project teams that are focused on a specific mission — for MakerDAO this could be growth, innovation, borrowing, or RWAs. Each of these subDAOs has its own governance token and structure, empowering them as circles of consent with autonomy and authority. They self-organize, vote, create business plans, and if they succeed, they get rewarded.”

In this week’s editorial, siddhearta analyzes “The Endgame” and posits that the best way for teams to decentralize is to first ‘degrade’ from decentralization to a more centralized model, become resource efficient, and then decentralize. Progressive decentralization isn’t just a buzzword, here it is an actionable plan: one step down, one step over, and one step up.

In place of DAO Spotlight this month, be sure to check out the details of Bankless Publishing’s media partnerships this month with Shelling Point, Ethereum Singapore 2023 - Infinite Garden City, Token2049, and Zuzalu!

As always we conclude with a TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: angelspeaks, Quilia, KingIBK, Warrior, Boluwatife, Chameleon Kornekt, trewkat, siddhearta, HiroKennelly

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

The Endgame or the Beginning of Infinity?

MakerDAO's Graceful Degradation on the Road to Decentralization

Author: siddhearta

During the prolonged bear, DAOs have had to come to terms with a hard-learned lesson: you can’t simply give people governance tokens and expect them to govern well. DAO after DAO has been struggling with low participation, misaligned incentives, and slow, drawn-out governance procedures.

Let’s face it, DAO governance is a pain. The future of work is a decentralized decision-making dystopia.

MakerDAO is no exception. Rune Christianson, the co-founder of MakerDAO, has described their situation as a broken system. In his recent Unchained podcast interview, he describes out-of-control expenses, proposals that aren’t aligned with the DAO’s long-term goals, and unnecessary bureaucracy that stifles creativity and innovation.

Rune was standing at the edge of the abyss and thinking: maybe full-scale decentralization doesn’t work?

Maker’s Master Move

In a bold and controversial move, Rune returned to the drawing board and got back to the basics. His quest — to redesign MakerDAO around first principles like decentralization, scalability, innovation, and resource efficiency.

Rune believes that contributors can work together in constructive ways with well-designed tools, a gamified contributor experience, and proper incentive design. With these in place, contributors have autonomy within the DAO, but they still need governance boundaries to ensure continual alignment.

The challenge is DAOs need rules, but we don’t want bureaucracy. The overall goal of governance is to build systems that lead to constructive contributions by eager DAOists.

The result of Rune’s quest was a proposal called Endgame, which is a comprehensive four-phase plan to change the way MakerDAO operates, chiefly by redefining governance boundaries for MakerDAO’s organizational units. Central to the Endgame proposal is the concept of subDAOs. SubDAOs allow the parent DAO to simplify its operations and support the creation of agile, highly productive teams that are built to learn, adapt, and innovate. The subDAO model works to align incentives between diverse teams to improve the operations of the overall organization.

What’s a SubDAO?

Think of subDAOs as project teams that are focused on a specific mission — for MakerDAO this could be growth, innovation, borrowing, or RWAs. Each of these subDAOs has its own governance token and structure, empowering them as circles of consent with autonomy and authority. They self-organize, vote, create business plans, and if they succeed, they get rewarded.

Most DAOs face a cruel choice when trying to start a new project: either spend social capital to gain the support of OGs within the DAO or endure a governance nightmare and be stuck in the forums for the next three months.

SubDAOs, in contrast, are engineered for agility. They safeguard the parent DAO from potential pitfalls and share their learnings system-wide. And sure, some (most) subDAOs might fail. But others will collaborate, adapt, build, and thrive.

While the shift to subDAOs is a strategic move, it is also a shift towards centralization. It empowers smaller groups with autonomy and authority. By narrowing the focus of these subDAOs, contributors can avoid organizational debt and stifling bureaucracy. They can start with a clean slate, streamline operations, and become magnets for domain-specific experts.

This type of change in governance and decision making isn’t possible in traditional organizations, where bureaucracy is self-preserving and meant to substantiate the ideas of those in power. Only DAOs soft-code decentralization into their ethos, which in the short term might mean it is better to centralize decision making.

Graceful Degradation: The Path to the Ideal State

The term "graceful degradation" typically resonates with system designers, especially in the context of web design. It embodies the principle of ensuring features work smoothly across varied versions and types of browsers without compromising the end user's experience. But when applied to DAOs, it takes on a new level of meaning.

If we think about organizations existing across a spectrum of decentralization and resource efficiency, most DAOs would be highly decentralized but not very resource efficient. Web3 startups often start off as centralized groups that are trying to adopt the web3 ways of working, meaning they are likely resource inefficient. By contrast, web2 startups are efficient monoliths that are centralized and highly resource efficient. Finally, we have the ideal state, an adaptive, resource-efficient ecosystem with decentralized governance.

Currently, MakerDAO (and most DAOs) are in a state of experimental chaos with high degrees of decentralization but low resource efficiency. This leads to many of the problems that Rune described – wasted resources, painful governance, and stagnating organizations that aren’t able to fulfill their mission.

A hallmark of wisdom is recognizing limitations. In DAOs, this translates to acknowledging that the current system isn’t working. In our aspiration to prioritize decentralization, we left productive operations by the wayside.

The challenge is that the roadmap to our ideal state isn’t a direct route; there are too many variables at play to see a clear path from where we are now to where we want to go. With a better view of the road ahead, we see we don’t have to cross the abyss of despair, we just need to go around it.

To cross the chasm of inefficiency, DAOs might have to gracefully ‘degrade’ – in essence, centralize decision making into smaller groups like subDAOs to streamline processes and optimize resources. As these groups build and scale, they resume on the path of progressive decentralization.

This is why subDAOs might represent the true path to decentralization. They represent pockets of centralized decision making that aim to design better systems and solutions. As circles of consent, authority, and autonomy, they empower teams to work nimbly and innovate. As they mature, they can progressively decentralize, sharing their lessons, codifying their rules, and evolving towards the end game of adaptive, decentralized systems.

In essence, subDAOs are experimental sandboxes. A failure in one doesn't capsize the entire organization. Moreover, these micro-failures provide invaluable lessons, ensuring other subDAOs don't fall into the same pitfalls.

Approaching the Efficiency Frontier

In the structure of decentralized governance, graceful degradation isn't about compromising values but about tactical retreats for strategic advances. The road ahead may be punctuated with cyclical steps backwards, but each one is a purposeful stride toward the infinite horizon of the ideal, adaptive ecosystem.

As organizations enter the domain of adaptive ecosystems, at some point they will approach the efficiency frontier where they start noticing stagnation, inefficiency, and limited systems. The approach here is the same as above, to not separate thinking from doing and to give authority and power to those doing the work to figure out a better way forward.

As DAOs approach the efficiency frontier, the cycle repeats itself and rather than reaching an ideal end-state, we find ourselves on the frontier of an infinite cycle of degradation, progress, and decentralization.

The “Endgame” or the Beginning of Infinity?

When we think of "endgames," we think of a concluding act — an ultimate goal or destination. Yet, within the spectrum of decentralized organizations, subDAOs might not represent the endgame, but the beginning of an infinite game.

The physicist David Deutsch elegantly encapsulated this concept in his analogy for the progression of knowledge. Instead of envisioning an absolute state of omniscient perfection, he encouraged an understanding where there is no end to the creation of knowledge as long as we design systems that notice problems and work to correct them. This resonates deeply with the world of DAOs and the overarching principles of decentralization.

The Paradox of Perfect Code

In the Unchained podcast, Rune describes the Endgame as a smart contract that does everything. A BTC-like state of reliability. Code at the center, people at the edges.

I’ve always thought this curious because the center is coded on existing knowledge and change always happens at the edges.

If the parent DAO is what is encoded at the center, subDAOs are at the edges where change and innovation happen. SubDAOs are pushing to encode things in the center, but mainly they are working to design solutions to emerging challenges.

There is an interesting paradox here in the age of AI when humans as labor are increasingly becoming irrelevant and there is a temptation to outsource everything: while humans are ‘messy’ and ‘imperfect’, they are the source of change, adaptation, and growth. In our quest to build ‘perfect’ systems, we shouldn’t prioritize the center over the edges, for it is at the edges where all the interesting stuff happens.

DAOs need to experiment with unproductive paths, to work at the edges.

In the quest to build the 'perfect' system, we must never forget the immense value that people bring to the table, with their capacity for criticism, challenging the status quo, and experimenting with different ideas.

If we want organizations that change, adapt, and grow, we need a culture that supports organizational evolution. In DAOs, this often means relinquishing power, questioning the status quo, and not succumbing to the habit of trying to control the world around our conception of ‘perfect.’

Central to this is the understanding that we're perpetually prone to errors, but always in a position to correct them. Instead of seeking a static, 'perfect' system, we need structures that are adaptable and resilient.

For every system, from the most intricate code to the most complex organization, there's a gap between the idea of the thing and the thing itself. This gap leads to confusion and uncertainty, and sets in motion a cycle of problems.

What isn’t recognized in the search for perfect code at the center is that there is an underlying logic in problems. Problems present an opportunity for progress and a chance to make things better. Nirvana isn’t a static state. It is an unfolding process.

Standing at the Edge of Infinity

The journey towards decentralized efficiency isn't about reaching a final destination. Instead, it's about fostering a system that relentlessly seeks to identify its missteps and learn from them. It's about constructing a culture that values autonomy, consent, and authority, and that is primed for unlimited growth and development.

In the ever-evolving narrative of decentralization, the endgame isn't the culmination of an ideal hard-coded state, but the commencement of an adaptive ecosystem. Through the lens of graceful degradation, we come to see that while we might never run out of problems, the potential for progress is boundless, infinite, and profoundly desirable.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

DAOs for Impact

Author: Brynly Llyr, Aiden Slavin

🔑 Insights: DAOs have redefined how we organize people and direct resources. While most popular DAOs revolve around decentralized finance, innovators have recently begun to develop other varieties of DAOs that aim at effecting positive changes.

• Impact DAOs represent a small fraction of the overall DAO ecosystem. Although they are relatively small, these organizations have significant ambitions and clear strategies for developing tactics based on experimentation and data collection.

• Communities are building Impact DAOs aimed at advancing scientific research and sustainable economies, addressing poverty, and creating inclusive financial tools. These community-driven impact DAOs also have the potential to harmonize the interests of a large group of stakeholders.

• Impact DAOs face a host of operational, governance, legal, and policy challenges. To address these issues, DAOs are developing mitigation strategies by creating working groups specifically tasked with onboarding and offboarding members.

Dodging The Tyranny of Structurelessness in DAOs

Author: Rika Goldberg

🔑 Insights: Understanding the tyranny of structurelessness in DAOs is crucial for effective governance. DAOs need a balanced approach between centralization and decentralization to succeed, guided by three core pillars: formal structure, protocol-first strategy, and meritocracy and diversity.

• DAOs must establish a formal governance structure early on to prevent covert elites and ensure accountability; centralized entities can help in this process.

• Effective DAOs adopt a protocol-first strategy, aligning their core interactions with a business model. This approach facilitates repeatable processes and sustainable value generation.

• Successful DAOs prioritize meritocracy and diversity among members, preventing power concentration and fostering innovation.

• Embracing structured governance while balancing centralization and decentralization is pivotal for effectiveness in DAOs. Leading protocol DAOs like Uniswap, Arbitrum, and Optimism demonstrate the success of this approach in addressing real-world governance challenges.

Developing the DAO Health Pulse: reduction to a more convenient diagnostic

Author: Navojit Roy, Kenneth Francis

🔑 Insights: The authors developed the DAO Health Pulse Survey as a more convenient diagnostic tool for DAOs based on feedback and sample data from partnering DAOs. This new survey tool utilizes sample data collected from collaborating DAOs like Gitcoin and MoonDAO. The goal is to offer a more user-friendly and efficient diagnostic tool for assessing the health and effectiveness of DAOs.

• The original DAO Health Survey aimed to assess challenges facing DAOs across three factors and 14 sub-dimensions.

• The authors established operational definitions for DAO and DAO Health, focusing on factors like contributor socio-psychological factors and collective productivity.

• An item reduction process involved factor analysis and identified eight significant factors, streamlining the survey by removing items with weak factor loadings and synthesizing related items.

• The shortened DAO Health Pulse Survey serves as a diagnostic tool for DAOs, while the full survey provides in-depth analysis options for specific issues, emphasizing practical utility.

Solving climate problems: 4 Blockchain projects that have a real-world impact

Author: Anna Watson

🔑 Insights: This article discusses the World Economic Forum's white paper on the use of blockchain technology for climate action. It emphasizes the need for blockchain projects to demonstrate real-world impact in addressing climate issues. It also highlights four early-stage projects showing promising results in reducing CO2 emissions, conserving forests, and supporting local communities through blockchain-based climate technology.

• Regen Network utilizes its native token, REGEN, to enable the purchase of ecological credits that represent the value of services like carbon reduction, water purification, and biodiversity conservation in ecosystems. This approach incentivizes such services while providing sustainable livelihoods.

• Open Forest Protocol (OFP) is a blockchain platform designed to address challenges in measuring and verifying forestation projects, offering transparency and efficiency. It reduces barriers to entry in carbon markets by enabling projects to benefit from high-quality processes, potentially increasing revenue streams from carbon credit sales.

• dClimate is collaborating with Rainforest Partnership to create an educational campaign for World Rainforest Day and COP28. The campaign is aimed at emphasizing the critical role rainforests play in mitigating climate change, showcasing their innovative technology, and highlighting the need for global cooperation to achieve climate goals.

• Toucan Protocol plays a role in advancing climate action by developing technology to enhance the voluntary carbon market (VCM) through blockchain. They contributed to transparent and high-integrity carbon credit retirements and showed efforts in offsetting the carbon footprint of blockchain industry events like ETH Barcelona and DAPPCON.

Web3 Work research report: The DAO contributor's perspective

Author: Laura Lotti, Nick Houde, and Tara Merk

🔑 Insights: The report summarizes findings from an in-depth ethnography with 38 DAO contributors, probing their perspectives of work in web3.

• The authors conducted interviews and exercises to understand contributors’ roles, motivations, needs, and aspirations across diverse DAOs.

• Key insights found DAO work combines diverse roles and logics. Also, four socio-technical scenarios for DAO work were identified, each needing distinct improvements.

• It was determined that strengthening financial, psychosocial, and regulatory security enhances the contributor experience.

• The study provides a framework for understanding the complexities of web3 work and improving it.

Read the full report for the authors' detailed methodology, insights, and recommendations aimed at cultivating an equitable web3 work ecosystem.

Upcoming Events

Schelling Point

A celebration of all things public goods in web3 where open source technology, impact, and sustainability converge.

Schelling Point x Singapore is organized as a one-day event of talks, booths, co-working space, and happy hour, on 11th September from 10AM to 8PM in downtown Singapore.

Join for a day full of talks, workshops, and everything good vibes. Engage in topics around:

• Open-source Technology

• Regenerative Systems for People & Planet

• Equitable Funding Mechanisms

• Driving Impact & Advocacy in Web 3.0

Ethereum Singapore 2023 - Infinite Garden City

Ethereum Singapore 2023 is poised to unite builders, developers, and communities from around the globe to cultivate and nurture the thriving Ethereum ecosystem. Set to take place from September 10th to 12th, this 3-day event will be held at Singapore's esteemed National Gallery.

With support from community partners, including the Ethereum Singapore Meetup Group, the event aims to spotlight web3's potential for good by showcasing real use cases from local non-profit organizations. Anticipating over 2000 developers in attendance, Ethereum Singapore 2023 is a pivotal moment in the world of blockchain and Ethereum technology.

Token2049

TOKEN2049 is a premier web3 event, organized annually in Singapore, where decision-makers in the global crypto ecosystem connect to exchange ideas, network, and shape the industry. TOKEN2049 is a global meeting place for entrepreneurs, institutions, industry insiders, investors, builders, and those with a strong interest in the crypto and blockchain industry.

Headline speakers include Gemini Co-Founders Cameron and Tyler Winklevoss; Circle CEO Jeremy Allaire; Franklin Templeton CEO Jenny Johnson; Yuga Labs CEO Daniel Alegre; F1 Drivers Daniel Ricciardo and Pierre Gasly.

Zuzalu

HackZuzalu is Zuzalu's debut open application, a build-focused satellite event, serving as a great way for new members to join their community.

Here's a quick overview of the programming:

• September 11-12th: Hosting casual coworking, fun food tours, and a builder's boat party!

• September 13-14th: The "HackZuzalu" hackathon, featuring various workshops. Their core tracks orbit Ethereum, ZK, Public Goods, and Zuzalu infra.

• September 15th: Demo Day, followed by dinner and afterparty.

Apply soon to qualify for their sponsored housing at a first come first serve needs-based basis!

So how does a community agree on how to agree? If you’ve ever found yourself ‘swimming against the tide’ in a group discussion, you’ll understand that when DAO dialogue turns to impasse the result can be frustration and stagnation. In this issue’s editorial, HiroKennelly examines the difference between aiming for consensus and achieving consent, and explains how the concepts of authority, autonomy, and agency intersect to form the basis of quality governance processes in DAOs.

Also in this issue, get acquainted with the latest Gitcoin Grants round (GG18) — the good news is that you can decide all by yourself which of the array of projects you’d like to support. If you’re interested in DeSci, read the survey report about Gitcoin Round 15 funding for decentralized science organizations. There’s also a look at what the data from popular DAO-voting platform Snapshot tells us about DAOs, a thought-provoking take on the evolution of social DAOs into social protocols, and a look at the pros and cons of decentralization in relation to network security.

Last but not least, don’t miss Other Internet’s report titled Web3 Work: The DAO Contributor Perspective. It’s a wonderfully informative deep dive that will tell you all you need to know about the State of the DAOs.

Contributors: angelspeaks, Quilia, Warrior, Vi-Fi, Kornekt, trewkat, siddhearta, HiroKennelly

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

DAO Governance As Circles of Consent

Author: HiroKennelly

One of the phrases that gets batted around in modern democracy is the idea that a government’s legitimacy and right to power is conferred by the consent of the people. In fact, this concept is found in one of the U.S.’s founding documents, the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,...

But as anyone who has spent time trying to organize people knows:

If Benjamin Franklin thought consent could be a deal breaker, he would have been terrified of consensus. Wait, aren’t those the same thing? As it turns out, not in the least. In brief, consent means that no one is saying no, whereas consensus means everyone is saying yes. According to the helpful website, Sociocracy For All:

If you want to put a slogan on it that makes the difference clear, one could say that in consensus, we ask everyone “do you agree?”. In consent, we ask “do you object?”

The site goes on to say it’s all about the range of tolerance, and that finding the common ground where there are no objections is an easier task than aligning every person’s specific preferences.

Although the difference may make or break your organization, especially as you scale, most people think about these things like this:

Giving Consent, Building Consensus

My introduction to the distinction between ‘consent’ and ‘consensus’ began with an interview Ryan Anderson of Bankless Consulting did with Sam Spurlin of The Ready. In that interview, Sam discusses the distinction:

Consensus-based decision making involves a group of people agreeing it's the best thing to do…Consent as an alternative way to make decisions changes the bar of acceptance for taking a course of action. Instead of everyone agreeing it's the best course of action, we all agree it's safe to try.

While these notions of consent and consensus don’t map perfectly to organizational-wide decision making, Sam goes on to explain how they work in practice:

It's really about where you draw the line between what has to be brought to a larger group for a vote versus what we can trust people to take action on in their areas of expertise and allow folks who have the relevant context to actually weigh in on that decision.

One way to think about this is deliberately creating and delegating areas of concentrated authority within a self-managed organization. Can we carve out an area of decision making and have it be the property of the people who are in that team or circle? That way, as long as the decision is within that constraint, they can just go.

And if you can create these areas of concentrated authority, we trust that we have specifically carved out areas for people to be smart, use their judgment, and do what they need to do within guardrails that allow us to stay in a zone of safety. That's when you start to see the actual benefits of a self-managing organization. You don't need to continually bring everything back to a larger group to argue over things that people don't necessarily even understand.

To recognize the difference between consent and consensus is one thing, but to bring forth the fruits of this distinction is another. To be honest, it’s pretty easy to get stuck in the weeds right out of the gate:

It’s clear there is an operational component to these distinctions, one that implicates domains of authority, autonomy, and agency, the circles of consent on which effective DAO governance is built. I realized recently that an ongoing conversation with long-time BanklessDAO contributor links about (concentrated) delegated authority provides a framework for creating an organization that is built to decentralize and scale.

One of links’ operating principles is that you shouldn't delegate responsibility without also delegating the authority to carry out the actions necessary to effectuate the responsibility. This may sound obvious, but if you really think it through it’s actually extraordinarily unusual for responsibility and authority to be delegated together. On a local level, the police have the responsibility for maintaining the peace and the authority to arrest people, but that’s the outlier.

For many jobs, it’s all responsibility with no authority. Consider the service worker who has the responsibility to ensure customer satisfaction but not the authority to deviate from a standard script, or the salesperson who is responsible for facilitating your car-buying experience but has to check with the sales manager to give you a discount. What if you're a social media lead at a project but don’t have the authority to post content without the approval of the founder? Does your authority align with your responsibility?

The Circles of (DAO) Life

BanklessDAO is made up of organizational units: guilds, departments, projects, the Grants Committee, and the main DAO Vault multisig signers, as detailed in the BanklessDAO Constitution. Each of these organizational units can be represented by a circle.

By the social consent captured in the Constitution, there is an understanding as to the responsibility of each organizational unit in relation to the DAO. The Grants Committee is “responsible for vetting all funding proposals and ensuring funded organizational units provide ongoing transparency” while guilds are to focus on “onboarding, education, and community building”.

At the time of formation, the consent of the DAO defined the size of the circle and the purpose of each organizational unit. Over time, the consent granted to a particular organizational unit may change. For example, the Governance Department is in the process of asking for Snapshot-posting privileges, which will be approved or denied on the basis of token-weighted voting, a form of consent-based decision making. If approved, the domain of responsibility and authority granted to the Governance Department increases and the circle grows larger.

Defining the Circles

Authority influences the other two factors: autonomy and agency. Autonomy is only possible when authority and agency are aligned; it’s the idea that an organizational unit or individual is free from outside coercion to effectuate anything for which they hold the delegated authority. Agency though, is more complex.

Agency concerns both delegated authority and autonomy. In a legal sense, agency is a relationship between two parties where an agent has delegated authority from a principal to act on their behalf. In some ways, the Grants Committee is an agent of the BanklessDAO Vault, with the authority to disburse BANK tokens. In other ways, it’s an instrumentality of power, an agent that has both responsibility and authority. In either case, this agency is also determined by consent.

Agency gets really interesting when we look at how circles of consent operate within organizational units. Ideally, the domains of authority are so well defined, and the person within that circle so well empowered, that the DAOist can’t help but discover — or feel brave enough — to pursue their true passion, to unlock their secret heart. It’s been so long that we’ve forgotten just how many hearts bull-market vibes unlock. But that’s an article for a different time and place.

Delegated Voting as Consent-Based Governance

In DAOs we talk about reaching consensus, but what we’re really doing is asking for consent, the chance to try something, to experiment, to discover the frontiers of what is possible, together.

I’ve been around DAOs long enough to know that consensus is not only a rare outcome of decision making, but much like the snowbound Yeti, the facticity of its existence may rest on thin ice. There are ‘No’ votes to accompany many Forum posts, and importantly, most governance tokens lie dormant in a wallet, ungoverned, out of circulation from the decision-making process. How can ‘everyone agree’ if they’re not voting? This brings us back to delegated voting.

If you believe that DAOs are better when governed by consent, in fact best governed only by consent, then delegated voting is a logical way to increase the amount of consent and — paradoxically — the amount of decentralized decision making. The paradox has its limits, of course, as too much delegation becomes a centralization attack vector. One must only look at the grave concerns over Lido, let alone fiat political systems, to understand what’s at stake when we consider token-delegated voting systems.

To help ensure that no single entity controls more than a socially acceptable amount of voting power we can limit the percentage of circulating tokens allocated to a particular delegate and implement basic Sybil defense measures. Having recently become BrightID verified, I can tell you that strong Sybil defense takes little more than 15 minutes, and requires no doxxing. That seems a small price to pay to become a delegate for one of the world’s most widely held social tokens (BANK), currently at over 6,000 HODLers strong. And while I have no illusion that it will be possible to achieve consensus on this idea, I’m hopeful that BanklessDAO finds the experiment is safe enough to try, that is, to have the community give its consent.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

Decentralized Science Landscape Analysis

Authors: Erin Magennis, Francisco Diaz, and Carolina Menchaca

🔑 Insights: The article discusses the findings of a survey conducted by talentDAO and DeSciWorld, which explores the impact of Gitcoin Round 15 funding on decentralized science organizations, particularly DeSci's capacity to address the funding and publishing challenges of traditional science research through open access, inclusivity, and decentralization.

• The report details results from 41 of 82 DeSci projects funded by Gitcoin Round 15, showcasing achievements relating to publications, partnerships, education, events, and product/service launches. The need for funding and specific talents at different project stages are challenges.

• There is a strong correlation between community-building projects and educational efforts. Projects focused on community building demonstrated a high event participation rate, while projects with fewer goal accomplishments achieved more partnerships.

• DeSci actively promotes sharing knowledge and collaboration among its projects, aiming to counter the competitive nature of traditional science. Half of the projects provide resources to enhance understanding, and there is a strong desire for open collaboration and partnerships in the future.

• As the DeSci ecosystem matures, its focus includes transparent definitions, demographic representation information, collaboration guidance, and impact measurement. DeSci is poised to significantly influence the scientific landscape, with opportunities for involvement and contributions across various skill sets and stages of project development.

Exploring DAO Governance: A Empirical Study on Snapshot

Author: ThePASS

🔑 Insights: Crypto leverages cryptography, blockchain, and smart contracts to enable innovative applications like DeFi, NFTs, and DAOs. Snapshot, a prominent off-chain voting platform, aids DAO governance. Analyzing data from Snapshot reveals trends in DAO activities.

• The article provides figures gathered since late 2020 for the number of Snapshot spaces (nearly 20 thousand), proposals (~130 thousand), and voters (more than 2.6 million). While growth is evident, there are still many times more corporations registered than there are DAOs formed.

• The authors assert that the data shows that DAOs are resilient and are not affected by intense market cycles and “black swan events”.

• Included in the data are a number of “nonsensical DAOs” — Snapshot spaces formed for meaningless proposals which have fewer than 100 voters. The authors say the number of actively engaged DAOs is approximately two thousand.

• The data also provides insights into voters, blockchain networks, voting systems, and strategies in use. Notably relevant for this issue of State of the DAOs is the observation that “the percentage of voting power using delegation strategies has seen a significant surge over the past year. … In the long run, delegation is likely to become the default choice for DAO voting strategies.”

From Social DAOs to Social Protocols

Author: 0xJustice

🔑 Insights: The author argues that DAOs should build on value-generating protocols before cultivating broader community engagement. Social protocol design is an approach that pursues trustless coordination systems while expanding our imagination of what a protocol can be.

• Social DAOs can also be called tokenized communities. The typical structure of tokenized communities usually revolves around roles, multi-signature wallets, and some kind of grants program.

• The article proposes a 4-step approach to progressively transforming a community into a protocol, beginning with a handbook, then designing a game cycle, identifying game phases, and breaking the system into components.

• The author asserts the ultimate advantages of this approach are scale, efficiency, and capture resistance, which are aspects that social DAOs must begin to take seriously.

Decentralization From First Principles

Author: polynya

🔑 Insights: Despite its benefits, the author believes decentralization is merely a means to an end. Corruption and censorship resistance need to be increased but not through decentralization, as it is inefficient.

• Public blockchain seeks to increase corruption resistance, censorship resistance, and permissionless access.

• This can be done effectively by gaining high economic security and implementing proofs. These proofs ensure that people running validators don’t need to verify lots of data but a small proof.

• Some novel cryptography and mechanisms can make corruption or censorship resistance harder, for example, smarter slashing deterrents and enshrined PBS.

DAO Spotlight: Gitcoin Grants Round 18

Gitcoin Grants Round 18 is now open with some significant updates and changes to the platform. This round will provide $1M in matching funds for Core Rounds, which include Climate Solutions, Ethereum Infrastructure, Web3 Community and Education, and Web3 Open Source Software.

Gitcoin Grants Stack is the first-ever decentralized, customizable, smart-contract-enabled solution that is designed for communities to collaboratively fund projects that make a difference in the community. GG18 will predominantly run on Optimism in order to manage gas fees, but the Core Ethereum Infrastructure round will operate on Public Goods Network (PGN). Featured Round managers can choose their network preference.

Gitcoin Passport has also recently been upgraded with 6 new stamps and a new scoring algorithm. Passport was created by Gitcoin to defend its grants program from Sybil attacks, ensuring that only real people can allocate funds to projects. To be eligible for the matching pool, you need a Passport score of at least 20.

Support BanklessDAO in the Web3 Community and Education Grant Round

Donate to as many projects as you like — here are a few that help the world go bankless:

BanklessDAO: By funding educational initiatives and nurturing a culture of decentralized governance, BanklessDAO paves the way for global adoption of web3 technologies and principles.

Bankless Publishing believes in the power of decentralized media to provide unbiased information and foster a more informed community.

Bankless Academy is a free-to-use, open source learning platform that caters to the web3 curious.

Bankless Africa recognizes the critical need for accessible and trustworthy crypto education, capacity building, and empowering more Africans to participate in DAOs and web3 projects.

Donate now.

Let's Fund What Matters. Together.

In this issue, read about the impact of social network structures on DAOs with insights from Tjitse van der Molen, who writes that understanding the different architectures of such networks — how people interact, how information spreads, and how influence is exercised — enables a DAO to take proactive steps to optimize communication and decision making.

Stay current with insights from across the DAO ecosystem, including an overview of governance at the Optimism Collective, a look at legitimacy in the context of various DAO governance patterns, musings on DAO data transparency, and an insider’s view of City DAO's community-governed city on the blockchain.

If you’re interested in the idea of taking financial planning onchain, don’t miss the spotlight on PlannerDAO, the first decentralized community of financial planners promoting economic freedom and permissionless access to financial services.

As we head towards a network state, keep up to date with the State of the DAOs.

Contributors: Tjitse van der Molen, Tonytad, angelspeaks, Quilia, Warrior, Vi-Fi, KingIBK, MiuMan, trewkat, Kornekt, HiroKennelly, siddhearta

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

Social Networks and Their Impact

Author: Tjitse van der Molen

Social networks are part of every area of our lives, from friend groups to international trading routes. With the advent and development of technology, the complexity and variability of social networks has increased substantially. Just a couple of decades ago, only the people in your village or neighborhood were part of your social network. Now, it can be every living human being with an internet connection. Before, you'd get your dream job from a friend of your parents. These days you’ll land it thanks to the connection of a recent follower. Social networks are now bigger and broader than they have ever been and they impact every area of our lives.

In this article, we will explore the concept and definition of social networks, their different architectures, and how DAOs can benefit from knowing the shape of their social network. Finally, we will introduce you to TogetherCrew, a tool to visualize the social networks of online communities you inhabit.

What Is a Social Network?

Social networks reflect the way in which human beings interact. The complexity of interpersonal relationships can easily become overwhelming for large groups of people. However, we can learn about how people interact by visualizing all relationships as a network graph.

The Architecture of Social Networks

Because the number and strength of relationships between individuals vary, networks of a similar size can look and impact people quite differently. In some networks, a few individuals will be involved in the majority of the relationships. They're at the center of the network, which looks like a star. For example, the network of an influencer and their followers. Meanwhile, in other networks, the number of relationships is distributed more equally, like among a group of friends. This looks more like a mesh or spider web.

In addition to the distribution of numbers of relationships a person has, these relationships can be strong (e.g. best friend, partner, parent, team member) or weak (e.g. acquaintances, friends of friends). In most cases, frequent interactions signal strong relationships (e.g. the close friends we speak with on a regular basis) and infrequent interactions show weak relationships (e.g. the distant cousin we speak with only at family gatherings).

These differences in the way that people are connected to each other, namely the number of relationships and frequency of interactions, make up the architecture of the network.

The Impact of the Network Architecture

The architecture of the network drives the function, volume, and quality of the interactions people have in their daily life. When fans of a celebrity meet, their topic of conversation is often the celebrity, the person at the center of their network. Conversely, distributed networks will have more distributed topics, for instance in friend groups where everyone has unique interests and perspectives to share. Our interactions shape the network but the network also shapes our interactions.

Understanding the architecture of a network can help you understand how news and information travel through the network (or not), why individuals make certain decisions and how individuals form subcommunities.

For example, in dictatorships, the network is often hierarchical and authoritarian, with the leader at the top of the hierarchy and limited interaction between different branches of the network. To preserve power, the leader makes sure there isn’t too much interaction between departments, ideally creating rivalry between subgroups to limit others from gaining a holistic understanding of the situation. The star-shaped configuration allows the dictator to exercise control over the members of the network and limit their influence.

Meanwhile, in democracies, the network architecture is more diverse, with a wide range of relationships between people, and greater freedom of movement and information across the network. This network architecture allows for more collaborations between individuals, and encourages them to take part in social activities and strengthen relationships amongst each other, facilitating the exchange of ideas.

Not every architecture is good for achieving every goal. Swift action and decentralization often don’t happen together. On the other hand, the exploration of ideas or solutions and centralization tend to be mutually exclusive. Your network architecture should be aligned with your current goals.

Social Networks in Work Environments

In traditional corporate settings, the architecture of the social network is carefully planned and negotiated. For example, job titles are used to signal who can attend certain meetings or access information. The intended network architecture is often hierarchical and centralized, with greater levels of authority and responsibility at the top of the hierarchy. You can easily see this in the thousands of organizational charts posted online. However, the actual network, reflecting with whom employees really talk, exchange ideas, and forge alliances, is often less centralized and less hierarchical. Teams and individuals use other conduits and shape the network to bypass constraints of the intended hierarchy, and get work done or advance their personal goals.

The alignment between intended architecture and the way people actually interact can determine whether a specific strategy will function or not. For example, a strategy relying on strong collaboration across departments will only work if such interactions are actually happening. More granularly, we have seen that high-performing teams are not consistently noisy or quiet, but rather they alternate, going through periods of calm and then bursts of communication. By analyzing the difference between the intended network architecture and the actual network, we can understand what outcomes are likely and be proactive.

The Impact of DAOs on Social Networks

DAOs are changing the architecture of social networks in work environments. First of all, the DAO working environment is different — most of it is digital; there are no physical offices. DAO contributors are spread across different time zones; there is no formal hierarchy; decision-making and actionability is decentralized; and modes of working are highly community-driven, amorphous, and interest-driven. Compensation models also differ greatly from those in traditional working environments. All of these characteristics make DAOs a very different model of working.

While corporations try to constrain the social network through an artificial hierarchy, DAO members are free to access information and decide who to meet, and then what to propose, vote on, or contribute towards.

By taking the decision-making power out of the hands of a single individual or small siloed group and distributing it among a large group of DAO contributors, DAOs are creating more decentralized and distributed networks. These networks encourage greater collaboration and resilience. However, there are challenges too. If a DAO becomes too enmeshed and chaotic, members can feel overwhelmed and lose focus due to all the energy spent managing a large number of relationships.

To ensure that DAOs can optimally reach their potential, TogetherCrew has developed a tool to keep track of the social network structure of the DAO. In that way, DAOs can take action and design their own social networks, in order to effectively advance towards their goals. Below, we’ll describe how.

Design Your Network

To proactively design social networks, we need to understand how the network currently looks and work from there. For this, we use various metrics that provide insight into the current architecture. These metrics enable us to make targeted changes to enable the community's goals, and allow us to evaluate whether or not any changes have had the desired effect.

We primarily use three key metrics:

• Decentralization: How distributed are the relations in your network? Are a few people involved in the majority of the relations or are the relations distributed more equally?

• Fragmentation: Are there smaller subgroups within your network or not?

• Small Worldness: How connected are the different subgroups in your network to each other?

Once we have these metrics, we can then contrast the goals of the community with the current shape of the network, and take targeted action.

Example scenario: The DAO has too many silos. Members only vote on their narrow proposals and there is no progress on the DAO’s mission.

If we have too many silos in our community and we want to increase collaboration and alignment, we'll want to create opportunities for people to meet and create relationships across clusters (improving Small Worldness). Use tools that help members get to know each other like AMAs, intro.ai, randomized coffee trials, or cross-cluster problem solving.

Then we can monitor Fragmentation to ensure we don't go too far and end up with a hairball of a network where people are overwhelmed, and new members struggle to make sense of what's happening.

Finding the right balance for a community requires continuous improvement, and regularly checking the network metrics allows the community to plan effectively and adapt as needed.

Improving the Health of Social Networks

Social networks are an integral part of our lives, impacting our careers and the success of organizations. By understanding the different architectures of these networks, we can gain insight into how people interact, how information spreads, and how influence is exercised. With this knowledge, we can improve these networks and create environments that foster collaboration, resilience, and positive outcomes for everyone involved. With TogetherCrew, web3 community managers and community leaders can now analyze and improve the health of their social networks.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

Optimism’s Governance Is Tuned Into Community

Author: trewkat

🔑 Insights: Optimism is a Layer 2 scaling solution for the Ethereum blockchain which first launched in January 2021 as Optimistic Ethereum.

• In April 2022, Optimism launched the Optimism Collective, which is built to drive sustainable growth and experiment with governance of a decentralized ecosystem.

• The governance structure of the Optimism Collective comprises the Citizens’ House and the Token House. OP Citizens vote on the Collective’s retroactive public goods funding allocation, and OP Holders vote on proposals.

• Token House proposal votes happen in five-week blocks. Proposals that make it through a three-week feedback and review process are subject to an onchain vote in weeks four and five, while proposals that fail to be approved for a vote can be resubmitted in the next five-week cycle.

• The Optimism Foundation takes on the role of collecting feedback during a designated Reflection Period and developing a special set of proposals that address the issues raised.

• The Collective DAO Archives, which is an open-source library of policies and governance processes from 20 different DAOs is another huge body of work to come out of the Optimism Foundation.

Rethinking Legitimacy in DAOs

Author: philh.p2p.eth

🔑 Insights: The article explores the importance of legitimacy in DAOs and how various governance patterns contribute to or threaten the legitimacy of these institutions. The main point is to advocate for multistakeholder governance as a better model for large DAOs, promoting the representation of diverse viewpoints and the protection of different stakeholders' interests.

• Legitimacy is crucial in DAOs, just as in societies, but recent events have challenged the legitimacy of traditional institutions and governance mechanisms.

• Existing DAO governance patterns, such as coin voting, delegates, and workgroups, have shortcomings and often lack true legitimacy due to voter apathy, lack of accountability, and high transaction costs.

• Multistakeholder governance is a more promising approach, already prevalent in traditional political and economic organizations. It allocates voting power to different stakeholder groups (operators, consumers, and producers) to ensure diverse perspectives and minority protection.

• Each stakeholder group can use different consensus mechanisms to determine their voting preferences, based on their role and contributions to the DAO.

• Multistakeholder governance provides a more inclusive and legitimate approach for large DAOs, promoting collective ownership and agency, while avoiding centralized control and predatory behaviors common in centralized platforms.

DAO Data

Author: 0xJustice.eth

🔑 Insights: The promise of DAOs lies in data transparency, where every person, decision, and resource is visible on an open, programmable ledger. However, this vision is not yet fully realized, and various challenges need to be addressed to bridge the gap.

• DAOs aim for data transparency but face hurdles in making data legible and understandable.

• Projects like ApeSwap, Missio, and Aware Labs are developing tools to enhance data analysis and interpretation for DAOs.

• Interpretive frameworks, such as those provided by SeaLaunch and DAOstruct, are crucial to make sense of existing data before seeking more.

• DAOstruct's verification system aims to promote transparency and security by verifying onchain operations of DAOs.

Inside City DAO, Community-Governed City on the Blockchain

Author: Deepa

🔑 Insights: City DAO made history in July 2021 by becoming the first to own land on the blockchain and govern it through DAO. City DAO boasts of personalities like Vitalik Buterin and Brian Armstrong who became citizens by purchasing Citizen NFTs. In this article, Deepa, with the help of Eric (MemeBrains), revisits the founding of City DAO, the next steps to be taken, and DAO trends in recent years.

• In July 2021, a new legislation took effect, granting the DAO LLC legally enforceable rights in Wyoming, recognizing it as a decentralized autonomous organization.

• Shortly after the DAO Act took effect, Scott Fitsimones tweeted about buying and tokenizing land in Wyoming. This tweet gained traction and attracted an investor who supported his experiment.

• City DAO released NFTs which were sold to the public. These NFTs didn’t represent ownership but gave citizens the power to vote and participate in the decision-making process.

• With the capital raised from the sale, City DAO explored various directions and established guilds focusing on education, operations, mission, media research, and grants.

DAO Pain Points and Paths Forward

Author: MemeBrains

🔑 Insights: This article discusses pain points in the DAO ecosystem and explores potential paths forward to address these challenges. It summarizes a recent BanklessDAO Twitter Spaces conversation involving contributors from various reputable DAOs and organizations, aiming to continue the discussion for these critical issues within the DAO ecosystem.

• There are limited laws and regulations worldwide specifically addressing DAOs and uncertainties regarding governance token classification. The complexity of legal and regulatory issues poses significant challenges in the DAO ecosystem.

• Challenges related to centralized infrastructure and lack of Sybil resistance create vulnerabilities in token-voting systems. This highlights the need to explore solutions like the Internet Computer and zero-knowledge identity solutions.

• More clarity of processes is needed in the DAO space, necessitating the creation of user-friendly DAOs and broad acceptance of onchain entities without the need for specific legal entities in jurisdictions.

• Sustainability model and retention challenges in DAOs mean it’s important to establish a well-defined business model, incentivize full-time commitment, and foster an engaging environment for consistent productivity.

• Voting is mistakenly equated with decision making, while in reality, decision making involves fluid and dynamic processes. Moving forward requires adopting a first-principles-thinking approach and exploring innovative methods like weighted decision-making tables to improve the process.

DAO Spotlight: PlannerDAO

PlannerDAO created the first decentralized community of financial planners promoting economic freedom and permissionless access to financial services. Members are certified digital asset advisors (CDAAs) who are trained to provide guidance and education on digital assets and decentralized finance (DeFi) to investors of all levels.

PlannerDAO is committed to establishing fiduciary standards for financial planners in the digital asset space. They are actively involved in regulatory matters, including providing views and comments to proposed SEC rules that could impact the digital assets space (e.g. the recent custody rule SEC proposal).

How It Works

To become a member of PlannerDAO, you are required to complete eight steps (link your wallet to see the steps). These steps include completing an educational course, passing a test, and proving yourself onchain via a set of blockchain challenges. Once you earn your CDAA marks and become an official member of PlannerDAO, you will be able to create a public profile and help others with their investment and adoption of digital assets.

After successfully completing the membership steps, you will receive a CDAA Membership NFT through the Unlock Protocol. This NFT is used for PlannerDAO community governance and decision making. Additionally, PlannerDAO’s native token, PLAN, is used for experiments like member rewards and non-profit initiatives.

Contributors who join PlannerDAO can access a variety of resources, such as courses, events, podcasts, newsletters, and research reports. They can also network and collaborate with other CDAAs and industry experts. If you are interested in joining PlannerDAO and democratizing access to wealth-building strategies around the globe, you can visit the website or follow them on X.

In fact, it may just be inevitable. Among the many projects working to make DAO governance more engaging and rewarding are the folks at Game7, through Summon. Taking learnings from Massively Multiplayer Online games (MMOs), Summon seeks to transform “DAO governance for the better by incorporating the underlying MMO mechanics into the ecosystem: ingraining fair play, competitive collaboration, and diversified contribution.”

As the team at Summon writes this week, “[b]y establishing a meritocratic system that empowers the most productive and engaged members of the organization, Summon helps any DAO create an environment where people are rewarded based on merit and not financial flexing. This means no one needs to be an early investor to reap the rewards of the DAO’s progress and growth.”

We’ve been governance focused as of late, but as always we conclude with a TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: Summon Team, ab_colours, angelspeaks, Quilia, Warrior, Vi-Fi, trewkat, Kornekt, HiroKennelly, siddhearta

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

Transforming DAO Governance With MMO Mechanics

Author: Summon Team

Effective governance is a challenge that DAOs are yet to solve.

Although promising an equitable and transparent system, DAOs are yet to define effective methods of governance: organizational participation is skewed, with decision making often lacking in efficiency and engagement. There are no clear incentives in current DAO structures, and interests aren’t always aligned, making it difficult to rally contributors to move the organization forward.

However, the principles of Massively Multiplayer Online games (MMOs) can transform DAO governance for the better by incorporating the underlying MMO mechanics into the ecosystem: ingraining fair play, competitive collaboration, and diversified contribution. This approach can revolutionize the way we perceive and operate DAOs, bringing an equal, engaging, and enjoyable dynamic to governance.

Summon unlocks the full potential of DAOs by bringing these principles of MMOs to DAO governance. The platform enables DAOs to reward their communities based on the consistency and quality of contributions. It gamifies DAO participation to enable rewards, non-monetary incentives such as power and influence, and ultimately a more effective form of governance.

Engaging the Gaming Community

Summon’s gamification model is the missing piece of the puzzle in securing active, consistent participation and collaborative decision making among DAO members. Gamification, which is the integration of game design elements and mechanics into non-game environments, is the key to unlocking a new era of DAO community management and engagement. This approach is effective because it taps into our innate desire to level up.

By transforming the often complex and dry process of governance into an interactive, achievement-driven experience that is easy to navigate, we can breathe new life into DAOs, motivating active participation, nurturing collaboration, and cultivating a shared sense of ownership among members. Ultimately, gamifying the DAO experience can foster a vibrant and dynamic ecosystem that thrives on collective intelligence and creativity.

Moving Beyond Monetary Incentives

One of the key advantages of this new way of governance is that it extends beyond traditional monetary incentives. While financial rewards have their place, they do not capture the full spectrum of value that individuals bring to a community. Instead, they incentivize people to buy power and influence, rather than earn it.

With Summon, one token does not equal one vote. Summon gives each DAO member a soulbound NFT that evolves as the member contributes via voting, proposal submission, development, community contributions, and more. By offering status, influence, and power in return for participation, the platform recognizes and celebrates the multifaceted contributions of its community. This approach transforms the DAO landscape by valuing effort, time, and dedication as crucial elements of success.

Meritocracy in Action

DAOs have the potential to dismantle traditional power structures. One of the persistent issues in such structures is the power imbalance between leadership and entry-level workers.

By establishing a meritocratic system that empowers the most productive and engaged members of the organization, Summon helps any DAO create an environment where people are rewarded based on merit and not financial flexing.

This means no one needs to be an early investor to reap the rewards of the DAO’s progress and growth.

Inspiring a New Gaming Paradigm

By showcasing the success and potential of this innovative approach, Game7 aims to impact the web3 community beyond the Game7 DAO. The principles and lessons learned through Summon will be shared with other decentralized communities, promoting collaboration, knowledge exchange, and collective growth.

Gamified governance represents a crucial milestone in the evolution of DAOs. By infusing game design elements and mechanics into organizational design, we unlock the immense potential for engagement, motivation, and collaboration within each community.

Summon showcases the transformative power of applying MMO mechanics to DAO governance.

As we embrace this new paradigm, we pave the way for a future where every contributor has a voice and can actively shape the destiny of the DAO. By embracing gamified governance, DAOs can foster a more inclusive, participatory, and rewarding environment for all contributors.

Summon is a project created by the Game7 community. Learn more about Game7 at www.game7.io and follow them on Twitter @G7_DAO.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

‘This Protocol Is Brought to You By’: An Onchain Model for Web3 Advertising

Author: Mason Nystrom

🔑 Insights: Although crypto is hesitant to embrace advertising, it is one of the best monetization strategies available. Ads are the fundamental building block of the web3 advertising stack.

• The three models set to define the web3 advertising space are onchain ads, token-curated ads, and hybrid ads.

• Onchain ads include NFT ads and affiliate programs. An example is the NFT data aggregator CryptoSlam which experimented with NFTs that grant the owner rights to the banner ad slot on its homepage.

Token-curated ads leverage tokens as an instrument of attention curation. These tokens could be used to govern which storefronts appeared first on the front page of a site, marketplace, or social app.

Decoding DAOs Activity — The Importance of a Multidimensional Data Analysis

Author: SeaLaunch

🔑 Insights: This article emphasizes the transformative impact of DAOs in reshaping collaboration and decision making through blockchain technology. It discusses the rapid growth of DAOs, their diverse categories, and the importance of comprehensive analysis to fully comprehend their impact.

• The dimensions of treasury, governance, and token holders collectively provide insights into the activities and dynamics within each DAO and should be analyzed on a multidimensional level.

• When evaluating DAOs, it is important to consider financial metrics to understand financial health, and governance metrics to provide insights into decision-making processes and inclusivity.

• By taking a multidimensional approach to evaluating DAOs and adopting composite metrics spanning across various dimensions, stakeholders can gain deeper insights, set benchmarks, and understand the interrelationships within a DAO's operations.

• DAO Governance Asset Value (DGAV) is a composite metric that offers insights into a DAO's financial resources, community engagement, and distribution of voting power.

Building the Future Together in Web3 Communities

Author: Boluwatife

🔑 Insights: According to early thinkers on the concept of community, Ferdinand Tönnies, Robert Park, and Emile Durkheim, a community is not just a collection of individuals, but a social entity that has its own identity, values, norms, and culture. There is always work to be done to make yourself happier and to make the web3 space a better place. As Mother Theresa once said, “I alone cannot change the world, but I can cast a stone across waters to create many ripples”.

• Web3 is helping to build communities that are more inclusive, diverse, democratic, and resilient.

• Communities in web3 are not just passive consumers of content but active creators and participants who shape the future of the internet.

• The Crypto Bootcamp Community (CBC) is a group of enthusiasts who want to learn more about the world of cryptocurrencies and blockchain technology.

• One of the notable Bitcoin events in the web3 community is Bitcoin Pizza Day, which commemorates the first documented purchase of goods using bitcoin.

• The Crypto Bootcamp Community’s aim and vision is to promote the adoption of crypto and web3 among African youths.

Your Web3 Wayfinder

Author: trewkat

🔑 Insights: When venturing into web3, it can be overwhelming due to the numerous concepts and platforms. To make the journey easier, Bankless Publishing offers a set of articles that cover web3 essentials, including:

• web3’s key ideas of privacy, self-sovereignty, and public good.

• the differences between CEX, DEX, and DeFi, short for centralized and decentralized exchanges and decentralized finance.

• the basics of cryptocurrency wallets, NFTs (non-fungible tokens), and DAOs (decentralized autonomous organizations).

• blockchain and distributed ledger technology.

Remember, this is just the tip of the iceberg. The web3 ecosystem is vast, and finding your passion within it is part of the adventure.

In this issue we take a first-person perspective on gaming DAOs, looking at the various models in play and loading you up with some examples to check out for yourself. It’s not clear yet whether web3 is infiltrating gaming or gaming is infiltrating web3, but bit by bit we’re seeing gaming guilds and communities awaken to the power of tokenized ownership.

“As the gaming industry continues to grow and evolve, Game DAOs will likely play an increasingly important role in shaping its direction and providing new opportunities. Whether you are a casual gamer looking to connect with others, an investor looking for opportunities in the gaming industry, or an esports fan looking to support your favourite team, there is likely a Game DAO out there for you.”

Also in this issue we summarise some excellent long-form content that is worth your time to read in full. It’s fair to say that the honeymoon period might be over for DAOs. While there is plenty of inherent value in the tooling and processes developed by DAOs, and even the potential for this to assist cooperatives to scale more effectively, challenges remain in the form of contributor working conditions and the ever-present regulatory quagmire. It’s time to consider what works, what doesn’t, what the opportunities are, and what limitations exist for DAOs.

It’s time to take a closer look at the State of the DAOs.

Contributors: BanklessDAO Writers Guild (boluwatife, angelspeaks, Quilia, Warrior, Vi-Fi, Chameleon, trewkat, Kornekt, HiroKennelly, siddhearta)

This is an official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

🙏Thanks to our Sponsor

Game7 DAO

Game7 is excited to launch Summon, our novel DAO governance platform.

Summon is a community LiveOps tool that takes governance to the next level by making it easy for DAOs to measure the contributions of their members, and reward them in ways that go beyond money.

How it works: Each community member mints a Soulbound NFT that evolves as the member contributes to the community, making the NFT upgradeable and unique. As each contributor completes quests and tasks, they earn experience points (XP), which help them move up in rank and unlock features and rewards in real time.

By tracking, measuring, and rewarding contributions, Summon provides decision-making capabilities to those who invest time and effort into the community, as opposed to only those who contribute capital.

The result is a meritocratic governance model that distributes power and governing rights to the most productive members of the community.

👉 Sign up to the Game7 waitlist to experience Summon.

👉 Follow Summon on Twitter.

Exploring the World of Game DAOs

Author: Boluwatife

Web3 is not only revolutionizing finance through DeFi, ReFi, NFTs, staking protocols, and lending protocols, but across the globe, DAOs are being formed around sports, mental wellness, governance and development, wealth generation, and so much more. The convenience and efficiency associated with organizing communities and developing projects in such a decentralized manner holds great appeal to many people, particularly in the world of gaming. Let's discuss what Game DAOs are, take a look at several types of gaming DAOs, and highlight some existing DAOs in the gaming industry.

Just as the term indicates, Game DAOs are decentralized organizations that specifically focus on the gaming industry. They aim to advance decentralized gaming and to empower gamers with greater control over their gaming experience. These DAOs operate on decentralized networks like Optimism or Arbitrum, fostering more transparent and fair gaming environments. Traditionally, game developers and publishers have complete control over game development, rules, and rewards, which often results in an unequal power dynamic. In a Game DAO, however, power is distributed among participants, many of whom are gamers themselves, allowing for more democratic decision making.

Types of Game DAOs

Here's a quick overview of several DAO types in the gaming industry:

• Tokenized Game Asset DAOs allow players to trade and own in-game assets on the decentralized system, eliminating the need for a centralized platform. This fosters a more open and equitable gaming economy where players can trade, lend, or borrow game assets.

• Game Development and Funding DAOs are for developers to pitch and fund game development projects. They allow users to have more input into the game development process, including suggesting features and helping to test new games.

• Game Distribution DAOs are focused on decentralized game distribution. They assist developers in reaching a larger audience by distributing their games via a decentralized platform, thereby reducing the need for centralized game distribution platforms.

• Community-driven Game DAOs are dedicated to building a vibrant gaming community, enabling gamers to connect, collaborate, and play together. They frequently have a strong social element, with members organizing events and activities, exchanging tips and strategies, and assisting one another in improving their game play.

• Investment-oriented Game DAOs seek to maximise financial returns for their members. They put money into gaming projects like game development studios, esports teams, and gaming hardware manufacturers. Members of these DAOs typically conduct due diligence on potential investments and track their performance over time.

• Governance-focused Game DAOs are concerned with influencing the gaming industry's future. They aim to persuade game developers, publishers, and other stakeholders to create games that are more in line with gamers' interests. These DAOs frequently have a strong advocacy aspect, with members participating in campaigning, public relations, and other activities to further their objectives.

• Game Asset Management DAOs aim to manage in-game assets, such as virtual goods, virtual money, and other kinds of virtual property. With the help of these DAOs, players can pool their funds and jointly manage their assets, which can improve pricing, increase liquidity, and lower transaction costs.

• Esports-focused Game DAOs have a vibrant fan base with participants who follow their favourite teams and athletes and participate in online forums and other activities. These DAOs concentrate on assisting the esports communities by offering funding, materials, and other forms of assistance. They offer coaching and training, aid in developing a robust esports ecosystem, and assist players and teams in participating in competitions.

As the gaming industry continues to grow and evolve, Game DAOs will likely play an increasingly important role in shaping its direction and providing new opportunities. Whether you are a casual gamer looking to connect with others, an investor looking for opportunities in the gaming industry, or an esports fan looking to support your favourite team, there is likely a Game DAO out there for you.

Popular Gaming DAOs

Now, let’s take a look at some examples of existing gaming DAOs.

DAOFightLeague (DFL)

DFL is a blockchain-based platform that enables users to participate in competitive tournaments, vote on game results, and contribute to the platform's development. Additionally, DAO Fight League participants can engage in world-first Player versus Player (PvP) virtual reality boxing competitions where they face off against other fighters from around the world.

Star Atlas DAO

This DAO is a multi-tier platform, consisting of player guilds (DACs) and sub-DAOs reflecting factional, regional, and local interests of the Star Atlas game – a “grand strategy game of space exploration, territorial conquest, and political domination”. By locking POLIS tokens, members of the Star Atlas gaming ecosystem can decide how the ecosystem as a whole will be affected. The DAO is governed by seven guiding principles, including excellence, purposefulness, security, openness, and governance as a metaverse activity. Members propose and vote on POLIS Improvement Proposals to improve the ecosystem. The Star Atlas Council, an elected body of representatives, directs the DAO, and the Star Atlas Constitution lays out its guiding principles.

Decentral Games

The Decentral Games DAO is a community-led initiative that aims to bring millions of people into the metaverse. Power is distributed among all token holders through its decentralized governance structure. The xDG token is the governance token that represents ecosystem ownership, with holders receiving voting power and governance rewards in proportion. The Decentral Games Treasury supports initiatives that help the ecosystem grow and holds a variety of crypto assets. Members can help by suggesting and voting on decisions like treasury fund allocations, new game features, and changes.

Treasure Gaming DAO

Treasure is the decentralized DeFi and NFT ecosystem built for virtual world projects on Arbitrum. Every project listed on the platform's marketplace utilizes MAGIC in their respective metaverses, with each community creating its own lore for this resource. In Treasure, token holders ratify essential decisions proposed by the Council and community through a decentralized framework.

Smithy DAO

SmithyDAO is an entity that operates on the Treasure Ecosystem and is built on the Arbitrum network. The MAGIC token is used and provided utility by the DAO. Its main product is Smithonia, a world that supports a hybrid economy of in-game/off-chain currency and resources. The currency and resources are linked to the cryptocurrency ecosystem and the global economy, supporting and promoting both.

Merit Circle DAO

The Merit Circle DAO is committed to combining the limitless potential of blockchain technology with the most recent advancements in gaming to create the next level of captivating gaming adventures. The Merit Circle DAO carries out activities across four verticals, each offering a unique product. Together, these products create an ecosystem that enhances the value of the MC token and the DAO as a whole. These four verticals are:

• Merit Circle investments

• Merit Circle gaming

• Merit Circle studios

• Sphere marketplace

Yield Guild Games

Yield Guild Games is a gaming community focused on providing an equal opportunity support system for players worldwide to achieve more. It began as a lending platform for NFTs and has grown into one of the largest web3 gaming guilds with players from all over the world. As a DAO, they plan on revolutionizing how we play games and laying the groundwork for the next generation of games and gamers using web3 technology.

The Blockchain Gaming Revolution Is Just Getting Started

Game DAOs represent an exciting new future in gaming and blockchain technology. These DAOs have the potential to transform the way games are made, played, and monetized, restoring control to gamers. With the gaming industry's rapid expansion and the increasing popularity of cryptocurrency and blockchain, it is evident that in the years ahead, Game DAOs will continue to be an area of innovation and exploration.

🙏 Sponsor: Game7 DAO is launching Summon, the new, gamified, meritocratic governance tool for DAOs.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

Making DAOs Work

Authors: Laura Lotti, Nick Houde, Tara Merk

🔑 Insights: Working for a DAO involves diverse forms of labor within a flexible organizational structure based on open membership and collective ownership. While some celebrate DAOs as the future of work, their implementation varies greatly, ranging from token-mediated protocols to more traditional company-like structures with on-chain elements.

• Surveys analyzing the working conditions of contributors to the web3 ecosystem reveal challenges such as unstable compensation, navigating a decentralized work environment, and unclear on- and off-boarding processes.

• These surveys have limitations in distinguishing contributor types, fostering in-depth conversations, and identifying missing mechanisms for long-term viability of DAO contribution as a work option.

• While contributors are attracted by DAO ideals, the lack of public goods mechanisms and social security poses challenges in realizing the vision. Instead of categorizing DAOs under a single frame, considering them as hybrid forms may provide a more productive approach.

What’s Next? Using ethnographic interviews and a focus group, the team hopes to understand the day-to-day experience of working in DAOs and web3, mapping social mechanisms and value flows to develop new strategies and mechanisms that address contributors' needs and replicate the benefits of legacy social security systems.

Toward Equitable Ownership and Governance in the Digital Public Sphere

Authors: Sarah Hubbard, Connor Spelliscy, Nathan Schneider, Samuel Vance-Law

🔑 Insights: The dominance of major tech players has lead to societal problems such as data privacy issues, mental health crises, political interference, and fake news. This report says attempts to control such harms have not been successful and suggests that technology cooperatives could potentially compete if given access to tooling developed for DAOs.

• Cooperatives have not scaled successfully but could do so with tools to improve voting, engagement, and member compensation.

• Onchain record keeping could help to maintain transparency and accountability for cooperatives.

• Experimenting with funding models being explored by DAOs could help cooperatives compete with corporations.

Blockchain Governance: Accountability in Decentralised Technology Communities

Author: Kelsie Nabben

🔑 Insights: Accountability refers to the procedures and systems that hold people, groups, or institutions accountable for their choices. The author writes that establishing and upholding accountability is essential for establishing trust and legitimacy and fostering effective and responsible governance in public institutions, private organizations, or self-governed communities.

• Accountability sits at the heart of decentralized governance. It occurs at multiple scales between multiple actors and forums. That means it could be different in decentralized public blockchain protocols, DAOs, or liquid staking protocols.

• Trust, legitimacy, confidence, and accountability are essential components of effective governance — hence decentralized technologies defer some administrative and regulatory processes of coordination to software-encoded rules, establishing a system of “trustless trust.”

• Accountability can occur through a blend of social trust-based and regulatory measures. In both blockchain protocols and DAOs, governance depends on both social and technical monitoring, verifiability, and enforcement that occurs both on and off the blockchain.

The Future of DAOs: Trends, Challenges, and Opportunities

Author: Cypherock

🔑 Insights: The article discusses the rise of DAOs and their impact on traditional centralized systems. It explores how DAOs are transforming industries and reshaping governance and decision-making processes, with the trends, challenges, and opportunities that DAOs present.

• DAOs' innovative governance mechanisms will evolve to address scalability, efficiency, and stakeholder participation, enabling decentralization of ecosystems and paving the way for novel economic models through cross-platform functionalities, collective decision making, and tokenized assets.

• The inherent decentralization of DAOs presents legal, regulatory, and security challenges, emphasizing the need for balanced regulation, robust security measures against smart contract bugs, and improved user interfaces for enhanced user experience.

• DAOs enhance financial inclusion by removing intermediaries, fostering tokenized economies with incentive structures. The transparency and immutability of blockchain technology used in DAOs boost trust, accountability, and fairness among participants.

• DAOs' future may involve symbiotic relationships with traditional organizations, leveraging their funding, knowledge, regulatory compliance, and market access to create a hybrid model that combines the benefits of centralized and decentralized systems.

• For a sustainable future, DAOs must address ethical considerations such as inclusivity and diversity in decision making, scalability, and governance efficiency, with a focus on privacy, data security, and dispute resolution mechanisms.

🙏 Thanks to our Sponsor

Game7 is a community formed to accelerate the adoption of Web3 gaming through crowdsourcing, to create public goods that can be owned by many. It’s a home for those who seek to influence, shape and build a better gaming industry, where the interests of developers and players are aligned.

Communities are formed through shared missions, experiences and support. Game7 operates much like a collaborative game. A member’s actions and contributions are measured to unlock influence.

Game7 prioritizes steady growth over short-term profit, enabling teams to maintain focus on building and real impact. The DAO aims to invest its treasury in infrastructure building, tool acquisition, development of the community, and gaming.

The community actively supports open-source software. They created a grants program to fund open-source software development; a way to encourage builders to focus on building without having to worry about funding (or anything other than building). Game7 does not expect financial returns as this is their way of supporting public goods.

Organizing global events so people can connect and collaborate is very important to Game7. The events could range from academic conferences to annual summits and pop-up online events conducted both digitally and in real life.

Game7 recently launched Summon, a tool that allows DAOs to measure the contributions of members and reward them in ways that go beyond money: status, rewards, influence, power. Summon intends to provide a contemporary solution to modern DAO governance by progressively rewarding those who contribute. Summon is a meritocratic governance model and it can integrate with any existing management tool stack. Visit their waitlist and click “Join Now” to sign up for the Game7 community prototype.

Game7 believes everyone has something unique to offer. You can join by organizing initiatives, collaborating with like minded individuals, and building products that benefit everyone.

Join the Game7 community by visiting their Twitter and Discord.

In traditional organizations, decisions-making processes tend to be centralized. Contrast this, of course, to decentralized communities where the regular mantra is that decision making is more inclusive and hierarchies are flatter. And while this may be true in a relative sense, it’s equally accurate to say that DAOs are ripe with centers of soft power.

Understanding decision making in decentralized organizations requires that we measure the relative influence of community members. To do this, researchers at RNDAO have created the Spread of Influence score to measure soft power. As Katerina writes this week, “[t]he Spread of Influence score gives the community a sense of key influencers, whether the larger member base is disconnected, and in general how discussions are undertaken within the community.”

In assessing the results, “[w]hat one should look for is an optimal score, which promotes participative discussion but does not hinder the speed of decision making or overburden members with participating in conversations.” Armed with this information, community leaders can assess the health of a community and take steps to improve decision making processes and help ensure the longevity of an organization.

This week’s DAO Spotlight focuses on Opolis, and organization dedicated to helping DAO contributors thrive, and we conclude, as always, with a TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: Katerina, Chameleon, angelspeaks, Quilia, KingIBK, Vi-Fi, boluwatife, Kornekt, HiroKennelly, siddhearta

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

🙏Thanks to our Sponsor

Game7 DAO

Game7 is excited to launch Summon, our novel DAO governance platform.

Summon is a community LiveOps tool that takes governance to the next level by making it easy for DAOs to measure the contributions of their members, and reward them in ways that go beyond money.

How it works: Each community member mints a Soulbound NFT that evolves as the member contributes to the community, making the NFT upgradeable and unique. As each contributor completes quests and tasks, they earn experience points (XP), which help them move up in rank and unlock features and rewards in real time.

By tracking, measuring, and rewarding contributions, Summon provides decision-making capabilities to those who invest time and effort into the community, as opposed to only those who contribute capital.

The result is a meritocratic governance model that distributes power and governing rights to the most productive members of the community.

👉 Sign up to the Game7 waitlist to experience Summon

👉 Follow Summon on Twitter

Measuring Decision Making in Virtual Communities

Author: Katerina

A community’s progress can be impacted by its decision making process - measuring that process gives Community Managers valuable insights.

Web3 is spearheading the formation of large communities spread across the world, coordinating towards a shared objective. Many of these communities uphold a permissionless or low barrier-to-entry principle and a drive towards decentralization. This impacts decision making by removing central choke points and creating a level playing field for all. It’s all about the community and what the members want.

However, while formal power is largely removed, not everyone is in a position to influence a decision or sway a vote. Informal power — the ability to influence others via conversations — has a strong hold in web3 communities. Knowing how much influence is spread across the community gives community managers insights into how level the playing field really is.

How Decentralized Are Web3 Communities?

Communities that meet and coordinate on Discord normally default to open channels. Yes, some channels are “role-gated”, but that’s more to reduce the noise and help members focus on the conversations that matter to them than to exclude members. In other words, everyone can follow and read up on almost every conversation that is going on. Consequently, it makes sense to abandon the old saying “information is power” in web3. More than ever before, everyone has access to the same information on a subject matter.

But, even if all conversations are technically accessible to all members, it does not mean that everyone has the same opportunity to participate in all conversations. Just think about language issues and time zones; while I sleep, I’m not able to participate in any conversation, and hence, I cannot influence the outcome of such conversations. Of course, I can chime in once I’m up, but that might be too late.

More importantly, conversations on Discord are transient. Everything is searchable but with every new post it becomes harder and harder to find out who said what, to review the different arguments members brought to a discussion, and trace the path from “let’s talk” to “let’s do this.” Some members will always have more social status than others and their opinion may sway others, making them pivotal in shaping a proposal and deciding its outcome.

While who-knows-who is less important in web3 with communities defaulting to open communication, informal power still matters. Informal power refers to a person’s ability to influence the thinking and decisions of others. These are the coaches, coordinators, mentors, and leaders of communities. You may not recognize them in a web3 community by their title but by their position in the community’s social network.

Using Social Decentralization to Understand Informal Power Distribution

In TogetherCrew’s community health tool, we measure how conversations are either spread across the community (decentralized) or led by a small group of members (centralized). The thought behind this is that participation in conversations matters for shaping the future of the community and of the members participating in the conversation. That’s why we labeled the metric: Spread of Influence.

Our underlying philosophy is that the communication structure of a community can impact how connected members feel with it and also how it evolves. The Spread of Influence score gives the community a sense of key influencers, whether the larger member base is disconnected, and in general how discussions are undertaken within the community.

And of course, we are mindful that mere participation in conversations does not have to be beneficial for the community or necessarily positive. Just imagine the classical web2 legacy company example of a loud manager dominating the team meeting with their monologue about what should be done.

What the Spread of Influence Score Can Tell You

The Spread of Influence score should be interpreted in the context of the size of a community. What one should look for is an optimal score, which promotes participative discussion but does not hinder the speed of decision making or overburden members with participating in conversations.

In a community with a high Spread of Influence score, there are no decision making choke points or weak links. There might be some members who are relatively more active than others, but, more or less, interaction is spread equally. However, if the members have divergent views, the decision making can take time. Also, if there is an external shock (e.g., new regulation or changes in the market), it is likely that the community might struggle to react and adapt because there is no central informal leadership. And additionally, for outsiders, the community might look disorganized as it isn’t clear who is in charge.

If the Spread of Influence score is too high, harming your community’s progress, here are some actions you can take:

• Assign oracles or expert councils for certain topics (example: Polkadot’s Fellowship Manifesto).

• Create onboarding quests to help new joiners figure out how to contribute (example: MetaGame’s Engaged Octo paths).

• Audit your channel structure and create topic or unit-specific channels. This will nudge members to contribute to their favorite topics while being less distracted by other conversations happening at the same time in other channels.

On the other end of the spectrum, if a community has a low Spread of Influence score, there is a group of members who are driving the conversations with limited input from others. Other members might read what is being posted but do not share their knowledge or opinion on the discussed topics.

Consequently, the discussions and decisions do not leverage the collective knowledge and perspectives of the community, and there is a possibility that contributors feel undervalued or unheard and will reduce their involvement with the community over time. They may also feel that the community is evolving into something they cannot relate to. Eventually, the community’s future will depend on the central members' activity and goals.

If the score is too low, here are some actions you can take:

• Give members responsibility over specific work areas or label them as experts and direct conversations to them.

• Showcase community members' expertise and work within and outside the community to help members become familiar with one another and connect with themselves.

• Host community-powered problem-solving sessions or longer hackathons to get people talking with one another.

If you want to know your community’s Spread of Influence score and find ways to improve resilience and member satisfaction, our community health analytics tool, TogetherCrew, is your best ally.

Deploy TogetherCrew for your community!

Or contact their team to learn more.

🙏 Sponsor: Game7 DAO is launching Summon, the new, gamified, meritocratic governance tool for DAOs.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

DAOs Could Get Official Standing Under Proposed California Law

Author: Jason Nelson

🔑 Insights: This article discusses a bill that has been introduced in California that aims to establish a legal framework for DAOs. The Assembly Bill 1229, introduced by Assembly Member Matt Haney, has gained support from prominent crypto investment firm Andreessen Horowitz and the Crypto Council for Innovation.

• The bill would amend the state's corporate code to include DAOs, blockchain networks, and smart contract protocols. If passed, it would enable DAOs to incorporate in California, pay taxes, and provide better protection for participants in the web3 economy.

• The bill seeks to educate fellow assembly members on blockchain technology and DAOs, with the goal of creating certainty, legitimizing this organizational type, and ensuring appropriate taxation.

• This movement comes at a time when government officials are increasingly focused on cryptocurrency, with greater scrutiny and regulations being implemented. Assembly-member Haney emphasized the significance of keeping up with technology changes in order to retain California's position as a global technology leader.

Web 3.0: Decentralized Governments

Author: Dmitry Mishunin

🔑 Insights: The article examines the concept of decentralized governments in the context of web3. It explains how decentralized platforms have paved the way for the exploration of decentralized governments, highlighting examples from big IT corporations. It discusses the advantages and disadvantages of decentralized governance, emphasizing transparency, equal participation, and resilience as benefits while acknowledging challenges such as complexity, scaling, and regulatory issues.

• Decentralized governments operate through digital regulation and are already being implemented by IT corporations, functioning under the authority of a Board of Directors.

• Blockchain technology and smart contracts play a crucial role in creating reliable, transparent, and decentralized governing systems for web3 governments.

• Advantages of web3 governments include decentralization, resilience against corruption, equal participation in decision making, and transparency of processes and outcomes.

• Disadvantages include complexity, requiring participants to have a certain level of tech fluency, scaling issues, difficulties in conforming to traditional regulations, and challenges in assigning liability in the absence of a centralized authority.

• Resolving these issues may involve measures such as providing education on decision-making processes or introducing a CEO role, but the most appropriate implementation of decentralized governance is still a subject of discussion.

Grants 101: Standing up a Grants Program in Web3

Author: Annika Lewis

🔑 Insights: Through your engagement with web3 you most likely would have come across grants programs such as those run by GitCoin or Optimism. If web3 projects offer any signal of what’s to come, it’s clear that grants are likely to be an important component of the future of work.

• Identifying and articulating clear goals sets the foundation for the right structures to be created.

• RFPs are an inspiration for future grants projects.

• The most common alternative to a committee is an in-house grants manager or grants team.

• Establishing expectations for timing, responses, and overall metrics is key to a good grantee experience.

• Web3 is nascent, both program managers and grantees are all figuring it out as they go.

DAO Spotlight: Opolis

Opolis is a DAO that empowers independent workers to design their personal work arrangements and have access to benefits that are usually reserved for corporate employees. Opolis aims to create a more egalitarian and flexible global employment framework, where workers can choose who they work with, where they work from, and how much they earn.

Opolis is built on Ethereum and uses smart contracts to automate employment processes and transactions. Opolis members can create their own employment entities (EEs) and join existing ones based on their preferences and needs. EEs are self-governing and can set their own rules and policies. Opolis also offers a marketplace where EEs can find and collaborate with other EEs or clients.

Opolis has its own governance token, WORK, which is used to participate in the DAO's decision-making and reward distribution. WORK holders can vote on proposals, suggest improvements, and earn dividends from the platform's revenue. Opolis also has a utility token, OPOL, used to pay for services and fees on the platform.

Opolis is more than just a platform; it is a community of independent workers who share a common vision of creating a better future of work. Opolis believes that work should be an expression of one's unique creativity and values, not a source of stress and exploitation. By joining Opolis, independent workers can enjoy more freedom, flexibility, and security in their work life.

Want to know more about this project? Check it out on:

👉 Twitter

👉 Website

🙏 Thanks to our Sponsor

One of the great hopes for DAOs was that they would give contributors a greater say in the organization’s decisions, that regular people would be able to help guide an organization. Indeed, we spend a lot of time talking about incentive alignment and bottoms-up governance, but many DAOs still use one-token one-vote models, plutocratic systems designed to reward whales over regular community members. There has to be a better way.

Fortunately, many are innovating in this area, ideating how to bring community participation, reputation, and other metrics into the voting equation. Game7 is one such platform.

As Game7 writes, “Soulbound tokens, experience points, and building meritocratic online communities offer effective solutions to address the pressing challenges confronting DAOs by promoting long-term engagement, incentivizing contribution, and ensuring fair distribution of decision-making power among community members.”

As always, we conclude with a TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: BanklessDAO Writers Guild (Game7, angelspeaks, Quilia, KingIBK, Vi-Fi, Tonytad, Kornekt, HiroKennelly, siddhearta)

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

🙏Thanks to our Sponsor

Game7 DAO

Join the Web3 gaming revolution at the 3XP Gaming Expo powered by Game7!

The event will feature esports tournaments, immersive gameplay, and networking opportunities for industry pioneers. Connect with potential partners and investors during a showcase of the best Web3 games.

When: June 8-9

Where: Pasadena Convention Center.

Get your tickets today!

👉 Game7 is extending a 15% discount to the Bankless community! Use discount code: Game7@3XP15 to claim it. This early-bird discount is only available for the first 300 people, so don’t delay!

👉 To learn more, visit 3XP.gg and follow on Twitter @3XPgg.

👉 For more information, please contact info@3xp.gg.

Gamifying DAO Governance

Author: Game7

Imagine entire industries being governed by the stakeholders they have the most impact on. Imagine the transformational effect this would have on the entertainment industry, the financial sector, and even the government.

Decentralized autonomous organizations present an opportunity for all of us. These organizations are rethinking what it means to contribute to a community. They are a revolutionary, novel approach to creating decentralized and democratic organizations that introduce transparency and trust into systems that have often been unclear, untrustworthy, ambiguous, and broken.

Take the financial industry: centralization can often create opaque environments where individuals lack visibility into how their funds are being managed or used. A DAO can address this absence of transparency by creating a decentralized lending platform, where individuals can lend and borrow funds without the need for a trusted intermediary. Furthermore, it can be designed to automatically enforce rules like borrowing and lending rates and repayment schedules which are visible to everyone.

With the hope for building a better future comes the many challenges that must be solved. One of the primary challenges DAOs face is voter apathy. Many members join DAOs because of the thrill that comes with being a part of something new and the excitement that comes with being able to influence change in an organization, something usually only afforded to senior-ranking officials and executives in the centralized world. This enthusiasm is short-lived though, as people are met with complex user interfaces and procedures and a lack of incentives for participation. This, coupled with how easy it is for wealthy members to manipulate the governance process, has led to increasing frustration for many DAO members.

Whales, who can be described as a small number of people or entities that hold a significant amount of voting power by way of governance tokens, have long been criticized for making DAOs more centralized. This group has the ability to sway the outcome of a vote, regardless of the wishes of the majority of contributors.

Soulbound tokens, experience points, and building meritocratic online communities offer effective solutions to address the pressing challenges confronting DAOs by promoting long-term engagement, incentivizing contribution, and ensuring fair distribution of decision-making power among community members.

‘One Token, One Vote’ - A Broken Model

The ‘one token, one vote’ governance model is based on each individual having one vote for every token they own. The model is fragmented and ineffective. It incentivizes people who have more money to buy more votes, replicating one of the biggest challenges with centralized organizations. By introducing experience points (XP) to a governance system, the system begins to move away from the notion that money equals power. XP is earned and not bought, thereby incentivizing members to contribute in meaningful ways to achieve a higher rank.

Imagine a world where as each contributor completes works, tasks, and quests, they earn XP which can help them unlock features and rewards in real-time. Contributing to a DAO becomes like a game, and the difficulty that comes with onboarding and engaging in DAOs is abstracted away.

By tracking, measuring, and rewarding contributions via XP, DAOs can track, measure, and reward contributions and provide decision-making capabilities to those who invest time and effort instead of those who only contribute capital.

Putting the Soul in DAOs

While DAOs can use various tools like voting platforms and discussion forums to collect data on participation, these tools often do not provide a complete picture of an individual’s level of engagement. For example, members may participate in discussions or contribute to the DAO in ways that are not easily traceable or measurable, such as providing support or guidance to other community members.

Soulbound tokens (SBTs) can help address this problem. SBTs are often referred to as digital identity tokens and are meant to represent a person’s online identity. They can’t be sold or traded and are bound to one person. Instead of issuing governance tokens that can be bought, sold, and traded, SBTs can be assigned to DAO members and act as membership cards. In this scenario, when DAO members contribute to the community by completing a task and earning XP, their SBT can be upgraded, giving them more access, influence, and power within the community. The NFT is upgradeable and unique and serves as a status symbol within that community.

A Digital Meritocracy

In meritocratic societies, individuals achieve positions of power and influence based on their abilities, talents, and achievements instead of wealth and social status. Those who show the highest level of excellence are continuously rewarded with more responsibility and decision-making power.

The result of implementing SBTs and XP into DAO governance is a meritocratic governance model that distributes power and governance rights to the most productive members of the community. When you see a user’s XP, it’s clear that they’ve contributed to the ecosystem, and they’ve earned rather than bought their influence.

This approach helps ensure that decisions are made by those who have the greatest knowledge and experience in a particular area, leading to more informed and effective decision making.

Meritocratic DAO governance also encourages a more diverse range of voices and perspectives, as members with different backgrounds and areas of expertise are given an equal opportunity to contribute. This promotion of a more fair and equitable distribution of decision-making power leads to a more efficient and effective DAO ecosystem.

The Way Forward

For millennia experiments have shaped society, ultimately leading us to its current state — a world built to benefit few. DAOs present an opportunity to change this for the better and create a future run by network states — decentralized communities that will band together to strive for more transparency and accountability.

To achieve this we need to make DAO participation more seamless, more fair, and more enticing — not just for the early adopters but for everyone. This can be achieved by using XP and SBTs to gamify the governance process. The result is a society built on merit, one where each contributor is incentivized to solve the challenges ahead, and excited to contribute to a better future.

🙏 Sponsor: Game7 DAO is launching Summon, the new, gamified, meritocratic governance tool for DAOs.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

Collect The DAO Anthology by Quorum

"The DAO Anthology" is a collaborative publication released by Quorum, a metalabel formed by Samantha Marin and Brandon Nolte, who originally were individual creators with their own podcasts and newsletters on DAOs.

The DAO Anthology showcases a selection of influential essays exploring the theory, practice, and future of DAOs, contributed by a total of 21 writers and supported by an overall team of 25 people. Among the selected essays include several BanklessDAO alum, including Samantha Marin, frogmonkee, 0xJustice, and siddhearta.

The zine can be purchased in two ways: firstly, as an on-chain record for 0.045 ETH, which includes a digital version and a claimable physical print copy. Alternatively, a physical copy of the zine can be bought for $44 USD using traditional payment methods like a credit card.

Cabin Launches the First Network City

Author: Jackson Steger

🔑 Insights: Cabin has launched a network city, linking 20+ properties around the world with a shared culture, economy, and governance system. Prior to launch, the Cabin community developed a global network of nature-immersed properties. With the belief that a network city is the most suitable way to enable members to live surrounded by other kind, thoughtful, creative, open-minded, playful, and generous people, they offer a continuous a la carte menu of co-living and work-stay exchanges across the globe. The aim is to rewrite the rules for how members coordinate, connect, and live with each other.

• Cabin neighborhoods are designed to cater to remote workers and creators who love nature.

• Check out the Network City Center, which includes Cabin Citizenship, City Directory, Cabin Census and a Town Hall.

• Cabin Citizenship is free if you attend a Build Week at a Cabin neighborhood or hold 1,000 CABIN.

• Cabin Citizens receive exclusive access to co-living and residencies in the City Directory and collectively curate the list of neighborhoods that make up the network city.

• Participating can earn you roles, passport stamps, and tokens that give you privileges, reputation, and governance rights.

Understanding the Advantages and Disadvantages of DAO Voting Schemes

Author: Jyotrimoy Barman

🔑 Insights: Decision making is an important process in DAOs, and many decisions are made through voting. Because different voting schemes have their advantages and disadvantages, DAOs need to be well informed about these differences to be able to choose one that best suits their needs.

• In token-based quorum voting, a certain percentage of voters must participate and vote in favour of a proposal. This method favours those with more tokens.

• Quadratic voting is a way to vote that takes into account the intensity of a preference, not just the preference. This method enables proposals with a small number of passionate supporters to have a chance of funding, and it lessens the power of whales.

Other voting methods include weighted voting, reputation-based voting, and conviction voting.

Introducing Centaurs: Blazing New Trails in AI DAOs

Author: Autonolas

🔑 Insights: Centaurs is a new product in the Autonolas ecosystem that combines human members with an AI co-pilot to enhance decision making and execution through AI DAOs.

• Centaurs offers the potential to accelerate decision making and improve effectiveness in decentralized organizations by integrating AI-backed processes, enabling faster consensus and collaboration.

• Centaurs' unique plugin architecture also facilitates wide code distribution, Autonolas tokenomics participation, and it offers developers enhanced opportunities for growth and collaboration.

• Likewise, Centaurs introduces innovative features that enhance organizational efficiency, including AI-driven content generation and CentaurBots' ability to assist with decision making, performance evaluation, strategy suggestions, and intelligent distribution of ownership and rewards. Its functionality spans from social media posting to crypto protocols and web2 apps, catering to diverse use cases from finance to entertainment and beyond.

Centaurs in embracing the undeniable potential of AI-powered DAOs, and opens the door to unparalleled innovation and efficiency.

Governance Series: The Gold Standard of Decentralization

Author: Premia Finance

🔑 Insights: This article explores the concept of decentralized governance and emphasizes the importance of finding a balance between off-chain and on-chain governance infrastructure, and highlights the need for a hybrid approach that combines the strengths of both methods to achieve better decentralization and more effective decision making.

• Decentralization can be measured in multiple ways, with on-chain governance being the closest to achieving sufficient decentralization.

• On-chain governance allows for seamless execution of proposals in a trustless manner, transparency, and permanence of voting, making it suitable for critical processes like treasury allocation and protocol upgrades. However, limitations include low voter participation, scalability issues, and high costs, which are being addressed through gas rebates and gasless voting options.

• Off-chain governance mechanisms, such as Snapshot, complement on-chain governance due to their simplicity and composability features, but they lack the trustless and objective nature of on-chain governance.

• Projects like DELV (Element Finance) and Optimism's Agora are implementing on-chain governance to enhance decision making and decentralization, while addressing challenges like voter fatigue and limited scalability.

While on-chain governance has its challenges, combining off-chain and on-chain mechanisms can foster participation and strike a balance between decentralization and practicality.

🙏 Thanks to our Sponsor

In 2022, Impact DAO Media completed a study of twelve Impact DAOs, and they are gearing up for an even larger study this year. The first study found, among other things, that “Impact DAOs tend to emphasize relationships, community, and aligning around values over financial gain…. [and] Impact DAOs rely on a mix of web3 and web2 tools. Web3 tools are for governance and decentralized payments, while web2 tools are still the go-to tools for collaboration and communication.” Sounds familiar.

In addition, Impact DAO Media has launched an Impact DAO course and are building out fiat-space communities to bring awareness around the power of these new organizations. Impact DAO hopes that by “understanding their DNA and enabling their growth, we can help shape a more sustainable and equitable future for all.”

This week’s DAO Spotlight focuses on ReFi DAO, an organization dedicated to rejuvenating the planet through a global regenerative economy, and we conclude, as always, with a TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: BanklessDAO Writers Guild (Seneca52, Boluwatife, KingIBK, Warrior, Quilia, Vi-Fi, Feems, Kornekt, Trewkat, HiroKennelly, siddhearta)

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

🙏Thanks to our Sponsor

Game7 DAO

Join the web3 gaming revolution at the 3XP Gaming Expo powered by Game7!

The event will feature esports tournaments, immersive gameplay, and networking opportunities for industry pioneers. Connect with potential partners and investors during a showcase of the best web3 games.

When: June 8-9

Where: Pasadena Convention Center

Get your tickets today!

👉 Game7 is extending a 15% discount to the Bankless community! Use discount code: Game7@3XP15 to claim it. This early-bird discount is only available for the first 300 people, so don’t delay!

👉 To learn more, visit 3XP.gg and follow on Twitter @3XPgg.

👉 For more information, please contact info@3xp.gg.

The Evolution of Impact DAOs

Research and Education Help Build a More Sustainable and Equitable Future

Author: Seneca52

Impact DAOs are the youngest category of DAOs. While they have diverse objectives, they share a common purpose: to coordinate individuals online to make a real-world impact on people and the planet.

As the world faces increasingly complex and interconnected challenges, Impact DAOs offer a new model for collaboration and collective action.

By studying their structures, operations, and achievements, we can learn valuable lessons that can help us shape a more sustainable and equitable future.

Impact DAO Media: Origins

In 2022, Impact DAO Media conducted an intensive research study on twelve mature Impact DAOs, focusing on groups that met specific criteria.

These criteria included being purpose-driven (integrity) and having been in operation for at least five months (longevity). In other words, we wanted to understand how real Impact DAOs that actually worked - worked!

So what did we find?

The DNA of Impact DAOs

This initial study revealed a host of valuable insights, and some general principles that broadly applied to all the DAOs studied.

• Priorities: Impact DAOs tend to emphasize relationships, community, and aligning around values over financial gain.

• Design: Organizationally, Impact DAOs are distributed, remote, transparent, and use collective governance to achieve consensus on key decisions. The structure and size of core teams and contributors depend on the DAO’s goals and level of maturity.

• Technology: Impact DAOs rely on a mix of web3 and web2 tools. Web3 tools are for governance and decentralized payments, while web2 tools are still the go-to tools for collaboration and communication.

• Leadership: Impact DAOs are not leaderless – they have leaders, but not bosses.

• Tokenomics: Tokenomics can incentivize participation, raise funds, and align member interests. However, it is also an evolving science and should be pursued with the mission of the Impact DAO foremost in mind.

• Recruiting: Filling roles in Impact DAOs often takes place within the community, but specialized roles may use traditional channels.

• Decentralization: Impact DAOs are on a journey towards decentralization, learning and improving every day.

The Evolving World of Impact DAOs

One year on, we are gearing up to launch a bigger and better study into the evolved world of Impact DAOs.

Our early research shows that the space has grown phenomenally, with over 100 Impact DAOs that have been operating for one year or more. Impact DAO builders often design from first principles, and so the governance model is constantly evolving.

The second phase of Impact DAO Research will study 16 DAOs carefully selected from an initial, crowdsourced list of over 70 Impact DAOs. To reflect how the space has developed, we’ve expanded the list of categories.

• 🚀 Enabler: Meta DAOs providing infrastructure support like training, funding, and resources for impact-focused projects.

  • E.g. Gitcoin (funding), LexDAO (legal), and Impact DAO Media (research).

• 🌱 Climate: Climate DAOs focus on mitigation efforts in agriculture, carbon credits, land regeneration, and natural asset tokenization.

  • E.g. Klima DAO (carbon credits), Kokonut DAO (agriculture), Basin DAO (land restoration), and United Species DAO (community resilience)

• ❤️ Social Impact: Social Impact DAOs work to improve lives through social and financial inclusion, hyper-local mutual aid, and humanitarian aid.

  • E.g. Human DAO (financial inclusion), Impact Market (UBI), Ukraine DAO (disaster management), and Pact DAO (hyper-local city-based mutual aid).

• 🧬 DeSci: DeSci DAOs concentrate on scientific research, funding, and innovation across various disciplines, including longevity and synthetic biology.

  • E.g. Vita DAO (longevity), Valley DAO (synthetic biology), FrontierDAO (fusion and Ag tech).

• 🌐 Network State DAOs: Emerging Impact DAOs are built around network states, emphasizing highly aligned online communities and real-world asset acquisition.

  • E.g. DAOs that have acquired real-world assets such as City DAO, Cabin DAO, and Kift DAO.

The Future

The legendary management consultant Peter Drucker is credited (along with a number of other people, which is always a good sign) with the famous saying, "The best way to predict the future is to create it."

We are excited to announce the launch of an Impact DAO course, designed to educate and empower those interested in creating, joining, or contributing to Impact DAOs. The course will cover essential topics such as DAO fundamentals, governance models, and best practices for building successful Impact DAOs.

In addition, we are establishing a network of Impact DAO nodes to serve as local hubs for community-building, knowledge sharing, and collaboration. Led by advocates and trainers, these nodes will raise awareness about Impact DAOs and provide guidance to aspiring founders and contributors.

A crucial part of the Impact DAO nodes initiative will be organizing in-real-life (IRL) events and spaces, fostering connections among Impact DAO enthusiasts, and promoting collaboration on impactful projects. We hope to see you at one of them!

Pioneering a New Era of Collective Impact

As Impact DAOs continue to evolve and grow, it's essential to continually reevaluate the current and potential future trends in the space. This may include exploring the role of regulatory frameworks, the integration of artificial intelligence and machine learning, and the development of more advanced governance models.

Impact DAOs represent a powerful force for change, transcending traditional limitations and embracing a new era of collective impact. By understanding their DNA and enabling their growth, we can help shape a more sustainable and equitable future for all.

🙏 Sponsor: Game7 DAO is launching Summon, the new, gamified, meritocratic governance tool for DAOs.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

A DevOps Interpretation of DAOs

Author: 0xJustice

🔑 Insights: Examining the idea of DAOs from a DevOps perspective, this article highlights the developments in technology and possible uses for DAOs. It notes how "Everything-as-Code" (EaC) and other current technological advances are extended by DAOs, and it analyses the advantages of programmable agents, programmable property, and programmable contracts within DAOs.

• DAOs are an outgrowth of technology trends such as "Everything-as-Code," which treats all aspects of software development, operations, and infrastructure as code, resulting in systems that are repeatable, scalable, de-risked, auditable, and version-controlled.

• DAOs are organizations reduced to their most basic interface, similar to abstract APIs, allowing mathematically pure models of organizational functioning and control.

• Programmable agents, programmable property, and programmable contracts are some of the technical features of DAOs that enable trustless programmability, the replication of governance systems, the creation of tokens with intrinsic value, and the creation of on-chain organizations governed by impenetrable smart contracts.

• In the enterprise space, DAOs can complement traditional big tech by extending collectibles, loyalty programs, private access, and stakeholder engagement, providing a continuum of stakeholder ownership and empowerment.

Delegate Election: An Analysis

Authors: Butterd.eth, Lajarre

🔑 Insights: This analysis reviews recent events out of Aave, where the community held an election to select a delegate for a three-month term. TokenLogic emerged as the winner of the Snapshot election, followed by StableLab, and Fire Eyes. Some takeaways include:

• The Voting Power Whales, who are the top holders of voting power, significantly influenced the election outcome, as observed on the election dashboard hosted on Flipside. A detailed Pivotality Report revealed that Blockworks Research would have been elected if the Voting Power Whales had not participated.

• A Sankey diagram reveals that most candidate delegates did not cast a vote, except for Flipside Crypto, who evenly distributed their votes across TokenLogic, StableLab, FranklinDAO, Blockworks Research, ConsenSys, and Curia, excluding themselves. Additionally, Llama allocated their votes to TokenLogic and Flipside Crypto.

• An analysis of the election revealed involvement from new holders and non-participating holders, indicating that a large number of relatively new AAVE token holders who were not accustomed to on-chain governance actively participated in the proposal.

An Interview With a DAO Money Grabber, How They Are Draining Treasuries

Author: Makoto Takahiro

🔑 Insights: Some DAOs have received recognition for stacking up funds in their treasuries. However, as expected in an autonomous organization, not all of the participants of the DAO have pure intentions. Some of them (known as money grabbers) relentlessly use various tactics to deceive and manipulate the system, and eventually siphon funds from the treasuries.

This article provides a detailed interview with an anonymous money grabber who explains how and where these malicious activities are carried out. Among the revelations:

• The ‘actor’ explains their crypto background and highlights the importance of presenting themselves as a positive contributor looking to better the DAO, whereas they strategize on how to exploit the gaps and weaknesses present in the community.

• The interview also discusses how these actors infiltrate the system, participate in governance, and invest their time and resources to build trust with the community admins.

• Overall, the story showcases the challenges that many DAOs face in an attempt to ensure security and protect their integrity.

• Going forward, there may be an increase in the need for decentralized communities to find ways to prevent scammer contributors from draining their treasuries.

Economic Models for Tokenized Communities

Author: Jihad Esmail

🔑 Insights: DAOs are primarily concerned with the funding of community projects to increase a brand or mission. However, how tokenized communities reach economic sustainability is not prescribed by their form. Experiments with new and old economic models will be absolutely critical to their development and proliferation.

• The treasury diversification model has proven to be the most straightforward path to liquidity for many communities.

• Perpetual auctions can offer a predictable and transparent pricing mechanism, helping to attract investors and maintain a healthy market for the token.

• Subscription access tokens can encourage users to participate more actively in the community, driving value and fostering growth.

• A one-time payment structure may not provide a sustainable revenue stream for the DAO, and early adopters may have disproportionate influence over decision making.

• Effective due diligence and risk management are crucial in a project-based ownership-sharing model, as the DAO must carefully evaluate each project's potential before committing funds.

DAO Spotlight: ReFi DAO

ReFi DAO is a network that aims to rejuvenate the planet through a global regenerative economy. The organization envisions a future where local startup communities acquire land and tangible assets to create a net zero economy by 2050, in line with the Paris agreement. As a founder-led startup community, ReFi DAO is dedicated to creating a new culture at the intersection of climate action and web3 technology, where trust and coordination enable real-world impact. To achieve this goal, ReFi DAO is developing a new protocol that will allow anyone to participate in this culture and collaborate towards a more regenerative future.

Currently, Earth is faced with the crises of climate change, biodiversity loss, and social injustice. This all points to the fact that there is a deeper underlying crises. It also shows that the economic system that we have designed is no longer serving our needs. Luckily we have been forced to think of new ways to solve our problems, and individuals, groups, and institutions are pitching in to help in any way they can, working to prevent us from reaching a complete biosphere breakdown.

To address the pressing issues facing the planet today, ReFi DAO recognizes the need for a fundamental redesign of our currency, aligned with their core pillars:

• Promoting climate stability by reducing and eliminating greenhouse gas emissions through carbon markets.

• Restoring ecosystems by promoting biological diversity, which can be traded on carbon market infrastructure.

• Instituting social justice by building regenerative local economies that prioritize community well-being.

ReFi DAO has established a thriving ecosystem that has attracted top-tier founders, hosted numerous events, onboarded many groups, closed deals, and garnered support from over 30 like-minded investors. Through this journey, the organization gained a critical insight that proved key to realizing their vision of regeneration at scale: by bringing together all the pieces of the puzzle, they can create a global network that is rooted in local startup communities, working together to take collective action towards a regenerative future.

To know more about the community, visit their website and follow them on Twitter.

🙏 Thanks to our Sponsor

Among the issues with current models are that there is little flexibility as to how proposals are submitted and reviewed, reviewers don’t tend to be subject-matter experts, and funding workstreams are often a DAO’s most centralized point of administration and can be rigid in the application of their rules and policies.

These funding practices can make it challenging for those tasked with funding projects, and stressful for project leaders who just want to launch an initiative they believe can benefit the community. DAOs need a way to allocate capital to projects that is both efficient and responsive to the needs of builders and the community, and that’s why Gitcoin built Allo.

Allo is an on-chain platform that allows DAOs to run a number of different types of grants rounds, from seed and seasonal rounds to Quadratic Funding and retroactive funding rounds. This week’s editorial, written by members of the Gitcoin team, illustrates why Gitcoin believes that “[u]sing Allo to solve the problem of efficient allocation of a community’s capital will unlock contributor potential in ways no one can currently imagine, ensuring capital gets into the hands of the right builders.” 🥰

This week’s DAO Spotlight focuses on Rocket Pool Oracle DAO, a select group of Rocket Pool node operators who help manage the administrative functions of the decentralized staking protocol. And we conclude, as always, with a TL;DR of some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: BanklessDAO Writers Guild (0xZakk, Azeem Khan, Boluwatife, Warrior, angelspeaks, Quilia, Vi-Fi, Tonytad, Kornekt, Trewkat, HiroKennelly, siddhearta)

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

🙏Thanks to Our Sponsor

Game7 DAO

Game7 is excited to launch Summon, our novel DAO governance platform.

Summon is a community LiveOps tool that takes governance to the next level by making it easy for DAOs to measure the contributions of their members, and reward them in ways that go beyond money.

How it works: Each community member mints a Soulbound NFT that evolves as the member contributes to the community, making the NFT upgradeable and unique. As each contributor completes quests and tasks, they earn experience points (XP), which help them move up in rank and unlock features and rewards in real time.

By tracking, measuring, and rewarding contributions, Summon provides decision-making capabilities to those who invest time and effort into the community, as opposed to only those who contribute capital.

The result is a meritocratic governance model that distributes power and governing rights to the most productive members of the community.

👉 Sign up to the Game7 waitlist to experience Summon

👉 Follow Summon on Twitter

Funding Public Goods DAOs With Allo Protocol

Empowering Communities Through Responsive Allocation

Authors: 0xZakk and Azeem Khan

If you’ve been following Gitcoin, you’ve probably seen a variety of announcements coming out about Grants 2.0, the Grants Stack, and this thing called Allo. Our tagline at ETHDenver was, “Gitcoin is evolving.” There are practical reasons for this evolution. Vitalik Buterin called Gitcoin a central pillar of the Ethereum ecosystem. But after going through a quick rollercoaster of emotions — excitement, anxiety, joy — we looked at our AWS bill and realized we were overdue for some technical changes.

We also knew that Gitcoin could be more than Quadratic Funding and the Gitcoin Ecosystem rounds we know and love. We’ve distributed more than $50 million through our grants program, with an estimated global financial impact of $29.2 billion. We also distributed $41,500 to small businesses in Boulder, CO as part of the city’s COVID relief program. Past Gitcoin grantees include names like Uniswap, Optimism, and Dune Analytics. They also include Kotani Pay, Somleng, and AEDES from our round with UNICEF Innovate.

All that is to say: there’s something bigger happening here.

What Keeps Communities From Growing

Let’s take a big step back and re-examine how crypto has helped communities form and grow.

Crypto has proven to be an extremely effective tool for forming communities — bringing people together around a shared mission and pool of resources. ConstitutionDAO, Krause House, CityDAO, LinksDAO — all of these organizations raised vast sums of capital directly from their communities to help fulfill the purpose of their organization: buy a copy of the U.S. Constitution, a professional basketball team, fiat-space real estate, and a golf course. Not to say these were perfect cases, but it’s pretty remarkable to think that a DAO now owns a golf course.

Once a community has formed, crypto gives them a great set of tools for keeping community resources secure. Tally, Snapshot, Safe, and Governor Bravo help keep community resources SAFU, but anyone who’s run a large web3 organization knows there’s something missing. Why does it sometimes feel so hard to unlock members of a community towards goals they want to achieve? When it happens, it feels like catching lightning in a bottle: The BoysClub Zine took over Twitter the same weekend as the SVB banking crisis and SXSW.

As a community member, why is it so hard to just do the thing that you’re really excited about doing for your community? You come into a community full of excitement about their mission, you have a great idea to move the mission forward, and have to grind away at figuring out who has the budget to support your project. You just want to make great art, but what’s a little bureaucratic gaslighting among friends?

Allocation: The Missing Piece

In their current form, tokenized communities can’t reliably make progress towards their missions because there is one really important piece missing: there’s no meaningful way to allocate capital. Current governance systems are designed to keep capital safe, which serves a very different purpose from smartly deploying capital to fulfill a mission. What’s needed is an ecosystem of on-chain tools for allocating capital towards the things we care about. This is the next evolution of Gitcoin and the purpose of the Allo Protocol.

We see early signs of this in two places. First, the Airtable- or Notion-based grants programs that have sprung up in some larger communities, like Lens and Aave. These siphon off a portion of capital into a multisig and make it available through small grants. Second, Nouns has created the most marvelous fork of Governor Bravo that lets them run funding rounds. While the daily auction mechanism is a great innovation, the success of Nouns really comes back to how easy it is for an excited builder to get funding.

Allo Protocol (and the Grants Stack) will let anyone run a Gitcoin-style Quadratic Funding (QF) round, but it can do so much more than that. Create multiple pathways for community funding: a small grants program to seed new ideas and a quarterly QF round to fund and signal the importance of them. Integrate Allo directly into your existing protocol to reward a certain behavior (i.e. minting) and create an alternative incentive structure to staking rewards. Allo makes all of this and more possible.

Before we go any further, it’s important to clarify the distinction between Allo and the Grants Stack. Gitcoin built Grants Stack on top of the underlying Allo Protocol. We see the Grants Stack as an important tool for web3 grants-giving organizations, of which there are hundreds. We built Grants Stack to have three separate portions: one for builders, one for program managers, and another for donors. We predict that community-driven decision making using Grants Stack will soon go much further than just web3 grants programs.

In the Grants Stack current form, we’ve only built out the portion where people can use it to do Quadratic Funding, but fear not because we’ll be bringing Direct Grants and Quadratic Voting to the platform later this year. This increased functionality will enable communities even further.

Allo and Your Community

The key to Allo is its ability to help communities make decisions about capital allocation. Now that it’s easy to do on-chain, we expect that communities will develop many ways to fund projects within their ecosystem.

To drive the point home, let’s take a community like BanklessDAO as an example to explore four different funding models available through Allo:

1. Seed Round: A small grants program that seeds new media initiatives. If someone wants to launch a podcast solely focused on web3 and the upcoming presidential election in the United States, they’d apply here to get started.

2. Accelerator Round: An accelerator round meant for new media initiatives that are off the ground and in a growth stage. Grants in this program are larger and paid out in milestones. The team working on the election podcast applies and is awarded a grant to scale the work they’re doing.

3. Quadratic Funding Round: A Quadratic Funding round to signal community interest and distribute advertiser funding. In addition to being able to directly sponsor initiatives, advertisers can put funds into a pool that is matched by the DAO. The community then votes in a QF round each quarter to determine how the pool should be distributed. That election podcast is a grantee in this QF round and receives a large portion of funding, which allows them to continue working and now become self-sustaining.

4. Retroactive Quadratic Funding Round: A Quadratic Funding round to retroactively award driving growth of the overall Bankless brand. Let’s say all the Bankless media initiatives are published to a platform that enables minting of each piece of media, whether that’s a newsletter or a podcast. At the end of each quarter, all that minting data is used in a QF round to retroactively distribute a pool of funds. Assuming the election podcast went viral a few times and those episodes minted out and introduced a lot of new people to web3, accordingly, the election podcast team will be awarded a large grant in this round.

Here we have four different kinds of grants programs, funding different kinds of projects, in different ways — a plurality of funding mechanisms within a community.

There are two things here that are valuable to the Bankless community. First, Allo is interoperable with existing on-chain governance systems. So, the community can vote to allocate grant funds into a Safe where a committee controls how it is distributed in rounds or the proposal encodes all of the specific variables for who operates the round and what the parameters are for it. Second, because these grants programs all happen on-chain and within the Allo protocol, they’re fully auditable and transparent (not hidden in an Airtable somewhere).

Allo Empowers Communities

Through conversations with Gitcoin’s partners, it’s become evident that Allo is a much-needed tool in the web3 ecosystem. Using Allo to solve the problem of efficient allocation of a community’s capital will unlock contributor potential in ways no one can currently imagine, ensuring capital gets into the hands of the right builders. And we’ll be here enabling it. Empowering communities and the individuals within them is why Gitcoin exists, and we’re excited to help enable the future of grants funding.

Actions steps

📖 Read: DAOs as Self-Funded Startups | State of the DAOs

⛏️ Dig into What is Allo Protocol?

🙏 Sponsor: Game7 DAO is launching Summon, the new, gamified, meritocratic governance tool for DAOs.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

Decisions in DAOs - What Causes the Pain?

Author: RnDAO

🔑 Insights: Decentralized autonomous organizations are supposed to be decentralized — decisions can/should be made without relying on a single person or group. But with open discussions leading to noise, delay, and anger, what must DAOs do to get the best possible outcomes in their decision-making processes? RnDAO’s decision-making research unit started a study on this, and here’s what they found out:

• Good decisions come from a closed debate. When decision making is left open, there is a lot of interaction which leads to noise and leaves specific problems unresolved. Letting an expert group handle it makes things faster and produces better results.

• Although closed decisions are beneficial, they hide flaws that the public could have spotted, and the public gets locked out of meaningful discussions that could further improve proposals.

• The tension between open discussions and closed debates puts the DAO at risk. Since open discussions resonate with the initial purpose of DAOs, finding the root cause of the conflict, noise, and anger is necessary.

State of DAO Funding

Author: Ryan Holloway

🔑 Insights: DAOs have appeared as a more decentralized and democratic option for traditional organizational governance and decision making. Like any other organization, DAOs must distribute resources effectively to achieve their long-term visions, and regardless of the current trend, DAOs will continue to invest time into exploring ways to attract and retain top talent:

• DAOs can use working groups to optimize their strategies to achieve their evolving visions, but on the flip side, there can be aggressive competition for resources among working groups.

• Throughout 2022, $102 million was allocated from the DAOs’ treasuries to internal DAO labor. Of this funding, over 58% went to Product & Development expenses, with the second highest category being Growth (22%).

• Groups within the Community category emphasize fostering a strong and inclusive community centered around the DAO's protocol.

• To improve accountability, which is one of the issues DAOs face, strict and standardized performance metrics for working groups must be enforced.

Navigating the Murky Waters of DAOs

Author: bpetes.eth

🔑 Insights: DAOs are ever-changing realms that pose obstacles when dealing with issues of power dynamics, trust, and organizational arrangement. This article examines the drawbacks of DAOs' methods, emphasizes the significance of trust, and delves into techniques needed to maneuver around obstacles.

• DAOs are gaining popularity for their transparent governance and token-based power distribution, but they face challenges related to power and trust. While they offer new possibilities, their implementation requires careful consideration of power dynamics and trust issues.

• Making information available to the community and creating a clear and accessible structure that maps the power distribution within the DAO can help strike the right balance between agility and transparency.

• Creating a power distribution map documenting the relationships between stakeholders, roles, and decision-making processes is crucial to understanding and improving trust in a DAO. Regularly updating and sharing this map with the community can help maintain transparency and trust, fostering a healthy DAO environment.

• Tokenizing the structure of a DAO can lead to a more transparent system of power distribution and create trustless power and value flow. Role-based NFTs can be assigned to contributors to enable automated reputation, decision making, and access to value flows that foster trust and collaboration within the community.

• The effectiveness of a DAO’s on-chain and tokenized structure depends on whether it promotes effective decision making, efficient allocation of resources, and a balance between individual autonomy and collective goals while embracing the playfulness and creativity of the community.

Introducing Governatooorr: An Autonomous AI-powered Delegate for DAO Governance

Author: Valory AG

🔑 Insights: Governatooorr is a revolutionary project that aims to merge AI with web3, providing a simple, durable, and adaptable platform for developing AI-powered web3 apps. It is also an autonomous, AI-powered delegate presented as a "salve" to governance apathy through the use of Open AI’s ChatGPT. Governatooorr is being hosted on Propel.

This project implements AI to make it so humans no longer need to read governance proposals for voting and decision-making processes.

• Governatooorr allows token holders to delegate their governance token in a DAO, indicate their general voting preference, and then these preference aggregates are used to create a prompt for ChatGPT to vote on the holder’s behalf.

• Governatooorr provides an intriguing platform for exploring how to model AI-powered web3 apps to solve governance problems in organizations.

• The models implemented for creating Governatooorr, ChatGPT and Autonola, both enable Governatooorr to analyze governance proposals and choose voting options based on pre-set general options, while still maintaining full-stack decentralization.

DAO Spotlight: Rocket Pool Oracle DAO

Rocket Pool is an Ethereum-based protocol that provides a decentralized staking network. The goal of this protocol is to offer ETH holders flexibility in staking, reduce centralization risks, and offer incentives for participation

Rocket Pool is built to serve two main user groups: those who want to stake their ETH and run a node in the network, and those who just want to participate in tokenized staking by owning Rocket Pool’s non-rebasing liquid staking derivative, rETH.

The Rocket Pool Oracle DAO is made up of a group of select Rocket Pool node operators who are responsible for the administrative duties required by the protocol that cannot be achieved by smart contracts. Access to this DAO is by invite only.

To learn more about Rocket Pool, visit their website or follow them on Twitter.

🙏 Thanks to Our Sponsor

This week, Bruvton, a university student and budding DAO contributor, reflects on his time at university and discusses how DAOs have provided him with a whole different kind of education, one that can’t be found within the confines of brick and ivy. Through his work in DAOs, he has built global friendships, learned how decentralized technology works, and pushed himself in ways not possible at university.

As Bruvton writes, “Without diving into the world of DAOs, my conventional education would feel empty. My old limits have been pushed, and the time I am investing in myself now will pay dividends in the future. On top of that, the memories I've made and the people I've met will always have a place in my heart. No matter how I think about it, it feels like what I’ve gained for myself and can contribute to others is unlimited. Universities have not tapped this vast potential.”

This week’s DAO Spotlight focuses on a new group of token engineers setting the standard for our industry, and we conclude, as always, with a TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: BanklessDAO Writers Guild (Bruvton, Warrior, angelspeaks, KingIBK, Vi-Fi, Tonytad, Kornekt, Trewkat, HiroKennelly, siddhearta)

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

🙏Thanks to our Sponsor

Game7 DAO

Game7 is excited to launch Summon, our novel DAO governance platform.

Summon is a community LiveOps tool that takes governance to the next level by making it easy for DAOs to measure the contributions of their members, and reward them in ways that go beyond money.

How it works: Each community member mints a Soulbound NFT that evolves as the member contributes to the community, making the NFT upgradeable and unique. As each contributor completes quests and tasks, they earn experience points (XP), which help them move up in rank and unlock features and rewards in real time.

By tracking, measuring, and rewarding contributions, Summon provides decision-making capabilities to those who invest time and effort into the community, as opposed to only those who contribute capital.

The result is a meritocratic governance model that distributes power and governing rights to the most productive members of the community.

👉 Sign up to the Game7 waitlist to experience Summon

👉 Follow Summon on Twitter

DAOs and the Future of Education

Exploring Collaborative Learning and Alternative Career Pathways

Author: Bruvton

As centers of learning and distributed information systems, DAOs provide a playground for university students to practice newly acquired skills and while gaining both tangible and intangible benefits that go beyond a university education, and even web3.

Knowledge is priceless. It is the basis for individual freedoms and no matter how much we think we know, there is always opportunities for growth. As a tool to improve our society, we cannot rely only on university education. In order to meet the challenges of this century, we need a culture of learning that brings people into new depths of experience and understanding. DAOs are one of the ways of organizing communities around learning, and could replace a standard university-style education.

As a student myself, I am given a steady flow of information. It’s up to me to use this opportunity to build my own view of the world and to discover my truth. Majoring in philosophy has taught me a lot, but it’s a discipline that leaves out some of my core values. Plato, Aristotle, and Saint Augustine seem to have forgotten to consider decentralized, distributed ecosystems and open-source alternatives to finance. Go figure? Joining a DAO was my gateway into discovering the values of such ecosystems.

It wasn’t easy at first. I had a passion for writing and an interest in web3 that my classes couldn’t fulfill, but freelance work terrified me, and my lack of experience and a portfolio made me feel doomed. Nonetheless, I dove in head-first and searched for opportunities in the web3 ecosystem to help me learn more about this innovation. I hope my experience will encourage others to follow a similar path.

Learning As You Go

When I first joined BanklessDAO, I was lost. A warm welcome was waiting for me in the Discord server, but within seconds, I was overwhelmed within a labyrinth of channels and guilds, roles and gateways. I stumbled into the Writers Guild where my first assignment was dropped into my open hands. I had to write about something I knew nothing about, and had no idea where to start. After receiving some friendly guidance and simple advice, I was able to organize an interview with someone whose excitement for DAOs was instantly infectious. My fear turned into excitement as I absorbed as much information as I could, and before I knew it, I submitted my first article.

It only got better from there.

Working with an editor for the first time was exciting. I had never received such detailed feedback on something I’d written, especially not from any of my professors. By working in a DAO, I had direct contact with professional editors (they sometimes deny it, but I hope they accept this compliment). By the time it was published, I had learned an entirely new subject and gained skills and experience that my degree would have never afforded. I still learn something new with every article I write. No matter what field you are in, if you join a suitable DAO, you are sure to find help beyond what you could have ever imagined.

Leveling Up

Writing those articles was merely a gateway into a new world. The DAO guided me to push my boundaries, sometimes with one-on-one help from people who knew what they were doing. In no time, I became a master at navigating the Discord channels and finding resources and information. I was becoming a citizen of a nation that was once foreign to me, a master of a tide that had once left me drowning. On top of those opportunities, I had the privilege to join a high-level writing cohort that encouraged me to publish my own content. It was a workshop that would have been far beyond my means if it was not funded by the DAO.

By participating in the Writers Cohort, I was able to meet new people with similar interests and a lot more experience. The doors to new DAOs were being opened to me, and I was exposed to fields and topics beyond my already widening scope of the frontier. The best part of this experience is that it’s open to everyone! Even if you don’t write often, it’s an experience that you don’t want to miss. Be sure to keep an eye out for the next BanklessDAO Writers Cohort.

Contributor Benefits

I will admit, my attraction to DAOs wasn’t completely because of my love of knowledge. While I hungered for information, I also hoped for some material benefits. I wanted to invest in cryptocurrency, but as a student living in a foreign country, working a traditional job seemed nearly impossible. Working around my schedule was hard enough, but my lack of knowledge of the local language was crippling.

Contributing to a DAO accommodates all of these difficulties. I can work on my own time, I’m exposed to an international group of people, and I get paid directly on chain. I’m literally financially incentivized to do something I love and live new experiences in a way that helps to solve my dependence on traditional banks and expensive remittances.

As I continue to grow as a contributor, I’ll be able to take on more tasks and responsibilities. My ability to adapt and solve problems will evolve to a point that I could make more meaningful contributions to projects and teams in the DAO. I’m setting up my future in something I’m passionate about and I’m front-running the fields of a fresh frontier.

A Lesson for Universities: Built for Building

I am riding on the new wave of the financial system, growing and adapting alongside the technology. Though they have much to improve, I believe that DAOs are here to stay. As we continue to refine our skills, advance our missions, and welcome new explorers, our ideas will flourish. When I look back at how much I've improved in less than one year, I am filled with hope for the future trajectory of people like me. It pains me that I almost missed out on this experience.

Without diving into the world of DAOs, my conventional education would feel empty. My old limits have been pushed, and the time I am investing in myself now will pay dividends in the future. On top of that, the memories I've made and the people I've met will always have a place in my heart. No matter how I think about it, it feels like what I’ve gained for myself and can contribute to others is unlimited. Universities have not tapped this vast potential. Students like me need to understand the impact DAOs can have, both on systems and individuals.

DAOs provide knowledge and understanding in a distributed, decentralized way to those who seek it. On top of that they provide a new way to seek freedom, to earn an income, and to grow together. I can’t help but wonder what universities would be like if they embraced web3 technology. On-chain grades, incentivized participation and contribution, and a system where students help to set the curriculum would be revolutionary for many young learners. We are a long way from bringing the best of web3 to traditional education, but as long as university students continue to explore all that DAOs have to offer, it won’t be long until we see an IRL DAOversity near you.

Actions steps

📖 Read DAOs as Playgrounds for Growth and Development | State of the DAOs

⛏️ Dig into The 5 Skills Every Successful DAO Contributor Needs to Cultivate by Samantha Marin

🎧 Listen DAO Toolkit Series: Being Proactive and Problem Solving | Brandon & Sam

🙏 Sponsor: Game7 DAO is launching Summon, the new, gamified, meritocratic governance tool for DAOs.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

DAOs, DACs, and On-chain Org Design: A DAC Manifesto

Author: 0xJustice.eth

🔑 Insights: Vitalik famously wrote in 2014 that DAOs are not-for-profit entities while DACs are for profit. From this, we must ask ourselves how can nonprofits be sustainable in web3? What if public goods funding dries up? In this article, the author articulates a DAC Manifesto, a siren call to builders eager to press into the next generation of digital organizations.

• Value before Community. Build the product, then create the community. Don’t decentralize until your product has value.

• Coordination Games over Governance. Organizations should move as much coordination, which you can think of as their business plan, on chain as possible.

• Self-sustainability over Grants. It’s essential to create sustainable business models, not rely on grants and the benevolence of others.

• Renovation over Reinvention. On-chain organizations should learn from organizational history and successfully businesses.

• Modules over Monoliths. We should be framing on-chain organizations according to their capabilities, and trade offs are key.

The Sequence: Product, Protocol, Community

Author: Rafa

🔑 Insights: Organizational design has undergone several evolutions, and yet another is in sight. New companies are seen integrating blockchain components and extending their functions into a digital ecosystem consisting of a product, protocol, and community.

• Individuals view products or protocols as the anchor of organizations. However, a community can also be the primary anchor as they participate in the organization’s success and survival.

• Community goes beyond potential sources of revenue; it is the network of agents within which a particular organization operates.

• Organizational leaders must factor in all three components of a digital ecosystem to develop a complete strategy. The opportunities and risks associated with the organization will depend on its sequence, development, and integration.

• Three of the most common sequences include tooling (which is founded on a product roadmap), protocols, and DAOs, which are started by establishing a community.

The DAO Governance Conundrum Part II

Author: Leo Paturel

🔑 Insights: Fyde and Snapshot published a research article on the governance structures of DAOs. This article provides a valuable resource for individuals looking to understand the current state of DAO governance. Various aspects of DAO governance, such as voting mechanisms, proposal numbers, and participation rates, with over 6,000 unique data points, are also covered.

• Data on the 200 largest DAOs were collected and organized into five tables with different categories, including basic information about the DAO, Snapshot data, treasury holdings, Tally data, and aggregated governance data on both on- and off-chain proposals.

• The article examines the voting behaviors of the top 200 DAOs and finds that while over 25,000 proposals were submitted with an average of 139 per DAO, the average participation rate was 20% and there was no significant correlation between DAO size and participation rate or success rate.

• The article offers access to DAO governance data through a publicly hosted Supabase Postgres database and CSV format. The Supabase database requires a public API key and provides instructions for accessing the data using JavaScript, and the article includes a quick demo on how to query the data using Supabase's methods.

Building Psychological Attachment — Not Just Ownership — Into Web3

Author: Li Jin

🔑 Insights: Crypto projects frequently experience transactional, mercenary, and fleeting user interest despite actual digital asset ownership. It is important for crypto and web3 projects to leverage psychological ownership. This will improve user retention and promote enduring ecosystems.

• People develop a psychological attachment to products they have invested themselves in, be it their time, energy, effort, or money. Having a form of control and agency over a product can also promote psychological ownership.

• Products that distribute tokens to users can turn them into actual shareholders with potential governance or economic rights, further enhancing their sense of psychological ownership.

• Psychological ownership in the crypto space can result in positive behaviors like active participation and long-term retention, while low psychological ownership may lead to low engagement in governance.

• Leveraging the combination of asset ownership and psychological ownership can lead to faster growth and long-term success in crypto projects.

DAO Spotlight: Token Engineering Commons

Token Engineering Commons is a group of engineers, scientists, researchers, educators, ambassadors, philosophers, AR/VR game designers, digital nomads, activists, artists, edgewalkers, and pioneers who create sustainable and ethical designs for token ecosystems. In a broader sense, they are an organization that handles collectively-held resources designed for individual and collective advantage. They achieve this by focusing on integrated-systems design and the tools used to design and confirm tokenized ecosystems.

The creation of ethical, secure, and diverse economic systems that benefit societies is at the heart of Token Engineering Commons. With their two-layer system, they are on a mission to become a Schelling Point for the token engineering society. Their economic layer is set up to financially support projects that uncover, grow, and increase the most suitable practices for engineering safe tokenized economies, while their social layer aims to connect the token engineering field around the ethical principles, measures, mechanisms, and methodologies that materialize as the developing field of token engineering progresses.

Their strong value system permits their commons to function from a human-centric, prosocial perspective, prioritizing the progression of token engineering over short-term profits. They promote a radical open-source ethos, transparency, and accountability in their members. Another fascinating thing about this community is that it established engineering practices for the coming generation of decentralized economies.

To be a part of the community, check out the Token Engineering Commons on Discord, Forum, GitHub, Gitbook, Medium, YouTube and Twitter. You can also review their calendar of events.

🙏 Thanks to our Sponsor

Share BanklessDAO

Many DAOs have relied on the incumbents to get work done, these tried and tested tools like Snapshot, Sesh, Coordinape, Collab-Land, and Safe. DAOs that do their work on chain tend to use AragonOS or Compound’s Governor Bravo with Boardroom, and some are trying other tooling by Commonwealth and others. Of course these tools have many upstart competitors, but the piecemeal approach to tooling, combined with the immutable nature of the blockchain, has made it so the DAO tooling conversation continues, in nearly every corner of the cryptoverse.

Aragon is the OG DAO tooling platform, helping communities build together since late 2016. This year, they released what may be their most ambitious offering yet - AragonOSx. With this new release, Aragon is bringing flexibly to DAO governance and operations, but more importantly, a mindset that says DAOs work best when they are mutable - that is, when they can respond to changes within the DAO and the ecosystem.

In this issue, Samantha Marin, a BanklessDAO alumni and an emerging leader at Aragon, provides us with the details of this new DAO OS. As she writes "No one can predict what the organizations of the future will look like. So, Aragon has built a completely free and open-source tech stack that anyone in the world can leverage to build their organizations. With the powerful and modular OSx, you can build anything you can imagine! And the simple, no-code front end makes it easy to launch a DAO and start experimenting with governance at the speed of software.”

Whoa.

As always, we conclude this issue with a TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: BanklessDAO Writers Guild (Samantha Marin, Warrior, KingIBK, Quilia, Vi-Fi, Tonytad, Kornekt, Trewkat, HiroKennelly, siddhearta)

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

🙏Thanks to our Sponsor

Game7 DAO

Game7 is excited to launch Summon, our novel DAO governance platform.

Summon is a community LiveOps tool that takes governance to the next level by making it easy for DAOs to measure the contributions of their members, and reward them in ways that go beyond money.

How it works: Each community member mints a Soulbound NFT that evolves as the member contributes to the community, making the NFT upgradeable and unique. As each contributor completes quests and tasks, they earn experience points (XP), which help them move up in rank and unlock features and rewards in real time.

By tracking, measuring, and rewarding contributions, Summon provides decision-making capabilities to those who invest time and effort into the community, as opposed to only those who contribute capital.

The result is a meritocratic governance model that distributes power and governing rights to the most productive members of the community.

👉 Sign up to the Game7 waitlist to experience Summon

👉 Follow Summon on Twitter

Building Mutable Organizations on an Immutable Blockchain

How Aragon OSx Took Inspiration From The Early Operating Systems That Revolutionized Computers

Author: Samantha Marin

The blockchain is immutable — you can’t change the past state of anything within it. You can add new entries to the blockchain by signing transactions but you can’t change old entries.

Although this makes DAOs more resilient and transparent, it can be a problem, because they can’t easily change. Like the blockchain, these digital organizations have traditionally ended up being immutable. Until now.

Historically, if you deploy a token-voting DAO on the blockchain, say through an original AragonOS contract or Governor Bravo, you can’t change your mind later and decide to go to allowlist wallet voting, NFT voting, delegated voting, or a new governance model that hasn’t been discovered yet. You’re stuck with what you started with, unless you migrate to an entirely new contract, which is risky, cumbersome, and time-consuming. Depending on the setup of your DAO, it might even be impossible to migrate and evolve!

But if there’s anything we’ve learned in the past seven years of DAO evolution, it’s that organizations must be able to adapt and change. If organizations can’t experiment and evolve, they will fail.

Aragon set out to solve this problem by powering every DAO with an evolving permission management system.

But before we get into that, let's talk about operating systems.

What’s an Operating System?

An operating system is what makes your computer run. Mac OS, for example, is the operating system that all Mac computers use. The operating system acts as the intermediary between the hardware and software of your computer. It operates as a permission management system, essentially allowing programs (apps you install on your computer) to run by granting permissions to them. You can have multiple apps on your computer at once, and when you don’t need an app anymore, you uninstall it.

This feels completely normal to us today, but we’ve come a long way.

In the early days of computers, each program was the entire system. You couldn’t run multiple programs at once. Computers were built with a single program in mind. There was no way to install a new app or program — you had to reprogram your entire system to do so. Not to mention that these computers were the size of refrigerators and not very practical.

Qualities of computers in the 1970s:

• A single program was the entire system

• One program for every architecture

• Not possible to install programs (you would need a new architecture for that)

• To edit it, you need to reprogram the entire system.

A New Paradigm in Operating Systems: Linux, Mac OS, and Windows

Then came operating systems like Linux, Mac OS, and Windows. These were revolutionary because of their adaptability. You don’t need to update the entire system to make a change: you simply update the app.

A modern operating system works like this: there is a trusted kernel at the center with unrestricted resource access to tools like the camera, microphone, screen, and disk. The kernel is the central component of the operating system and has full control of hardware systems.

Then, there are several untrusted programs that request access to the shared resource. A program might be Google Chrome, the Mail app, Discord, or any other application you install on your computer.

Every app you install needs permission from the operating system to function, and, depending on the permissions you have set up, it succeeds or fails.

In short: operating systems manage permissions to untrusted apps.

For example, when you install Discord, you need to give it permission to access your camera and microphone. However, you can choose to block access to these tools.

With an operating system at the core, there’s no need to reinstall the entire OS to make one update in an app. You simply update the app itself.

This was revolutionary for the development of more advanced applications. Without operating systems, we wouldn’t be able to do anything that we can with computers today.

The DAO Frameworks on Blockchains Operated Like Early Computers

Blockchains are a paradigm shift in so many ways. But the original DAO frameworks on top of them operates much like those refrigerator-sized computers of the 60s and 70s.

To edit a set of smart contracts you’ve deployed on the blockchain, you need to reinstall that entire deployment. This makes development slow, opens up security risks, and makes developing smart contracts very high stakes.

Redeploying a contract whenever it needs an update is also expensive, because you need to pay gas fees every time you add a new state into the blockchain.

DAO frameworks on blockchains today:

• are like the original computer programs before operating systems

• need to code and redeploy custom contracts to get what your community needs — there’s no way to easily install and uninstall new features.

The Problem: Organizations Struggle To Adapt on an Immutable Blockchain

DAOs struggle to adapt because they need to update their on-chain deployment every time a major change — like altering their governance structure — is made.

Let’s go through Aragon’s approach to building OSx and the entire stack on top.

The Solution: Build an Operating System For DAOs

When building OSx, Aragon took the approach of trusted kernel plus plugins — just like the operating system that revolutionized the computer.

The plugin is a smart contract external to the DAO that can do things on behalf of the DAO only when permissions are granted.

The DAO vault, or treasury holding all of the DAO’s assets, is the trusted kernel at the center. For plugins to interact with those assets — such as to withdraw, swap, or stake — they need to be granted permission.

The plugins can be untrusted, meaning it doesn’t matter who builds them or what they contain. This is because the plugins aren’t baked into the DAO itself with full permissions to the vault; they’re external to the DAO’s vault, just like applications are external to a computer’s operating system.

This means the plugins can also be “unplugged,” or have permission revoked. This is similar to uninstalling an app on your computer.

Every DAO is a permission management system at its center, managing how the vault, which can contain assets or other information, is accessed. This permission management system is what grants and revokes permission to the external plugins.

The Aragon OSx protocol was built with the UNIX philosophy in mind: small, composable building blocks that can be rearranged into many different types of organizations. DAOs will mix and match plugins to build any type of logic their DAO needs.

In the image below, you can see the assets in the DAO’s treasury, like ETH and DAI. A layer of permissions separates those assets from the plugins below, which need to request access from the DAO to interact. So, in order for the “withdraw” function to execute, it needs to go through the permission layer.

Developers can choose how they want to design their plugins. The plugins can be upgradeable, making it easy to change and install new versions. Or, they can be immutable, so they’re not changeable later on.

Much like the apps you use on your computer and phone, developers are in control of how they design plugins. Aragon is providing the operating system and the basic functions DAOs need to operate, but builders like you are expanding applications and functionality on top!

Oracles: Permission Filters to Bring More Precision to Permission Management

We can take DAO permission management one step forward with oracles, which are like permission filters. An oracle “talks” to the blockchain to give it information from the outside world. For example, a blockchain can’t know what the price of gold is. So if you wanted to tokenize gold on-chain, you would need an oracle to constantly tell your contract what the price of gold is.

DAOs can use oracles to make their permission management more specific. For example, a DAO might want to grant permission to swap tokens on the Uniswap plugin, but only if the transaction is under $5,000 in value. The DAO would use an oracle to add logic to the plugin, basically customizing it to the DAO’s unique needs.

Oracles could become a key part of many plugins in the future.

How to Access the Power of Aragon OSx

There are a few ways to tap into the power of Aragon OSx for your DAO. Aragon has built a tool for every type of builder.

For No-code Builders: Aragon App

Aragon App: the no-code front end to Aragon OSx. Build a DAO in minutes without writing a line of code. The Aragon App is built with user experience first.

For Engineers: Aragon OSx

Aragon OSx: You can build a fully custom DAO with Aragon OSx by installing the plugins you need, and even creating your own! Aragon OSx includes an SDK, allowing you to deploy a custom DAO with just a few lines of code. You can use Javascript, so no need to be a Solidity engineer to use the SDK. The Aragon SDK is framework agnostic and we’ll be launching clients for other programming languages in the future. Check out the developer portal to get started.

Enabling Organizations We Can’t Yet Imagine Today

No one can predict what the organizations of the future will look like. So, Aragon has built a completely free and open-source tech stack that anyone in the world can leverage to build their organizations. With the powerful and modular OSx, you can build anything you can imagine! And the simple, no-code front end makes it easy to launch a DAO and start experimenting with governance at the speed of software.

We don’t have the answers, you do. We create tools to help you build the new forms of organization and coordination the world so desperately needs.

We can't wait to continue building better, together.

Start building your DAO and claim your dao.eth subdomain on the Aragon App today! Or, stay in touch by subscribing to our weekly newsletter and following us on Twitter and Lens.

Samantha is the Content Editor for the Aragon Growth Guild and the writer of the Quorum newsletter. She got her start in web3 in the Writers Guild at BanklessDAO.

Actions Steps

📖 Read Updating the DAO Operating System | State of the DAOs

⛏️ Dig into DAOs, DACs, and On-chain Org Design: A DAC Manifesto | 0xJustice

DAO Spotlight: Game7 DAO

Game7 is a community formed to accelerate the adoption of Web3 gaming through crowdsourcing, to create public goods that can be owned by many. It’s a home for those who seek to influence, shape and build a better gaming industry, where the interests of developers and players are aligned.

Communities are formed through shared missions, experiences and support. Game7 operates much like a collaborative game. A member’s actions and contributions are measured to unlock influence.

Game7 prioritizes steady growth over short-term profit, enabling teams to maintain focus on building and real impact. The DAO aims to invest its treasury in infrastructure building, tool acquisition, development of the community, and gaming.

The community actively supports open-source software. They created a grants program to fund open-source software development; a way to encourage builders to focus on building without having to worry about funding (or anything other than building). Game7 does not expect financial returns as this is their way of supporting public goods.

Organizing global events so people can connect and collaborate is very important to Game7. The events could range from academic conferences to annual summits and pop-up online events conducted both digitally and in real life.

Game7 recently launched Summon, a tool that allows DAOs to measure the contributions of members and reward them in ways that go beyond money: status, rewards, influence, power. Summon intends to provide a contemporary solution to modern DAO governance by progressively rewarding those who contribute. Summon is a meritocratic governance model and it can integrate with any existing management tool stack. Visit their waitlist and click “Join Now” to sign up for the Game7 community prototype.

Game7 believes everyone has something unique to offer. You can join by organizing initiatives, collaborating with like minded individuals, and building products that benefit everyone.

Join the Game7 community by visiting their Twitter and Discord.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

Governance and DAOs

Author: Polynya

🔑 Insights: There are inconsistencies about whether DAOs or the traditional models serve the goal of decentralization or public ownership better. It is not impossible for traditional organizations, such as cooperatives, to use blockchain and smart contract technologies to become more efficient. This questions the necessity for creating DAOs.

• One of the main self-inflicted setbacks that DAOs battle is adopting the rudimentary methods of organization. There are three suitable models for DAOs to emulate — public companies, local governments, and cooperatives. Each of these models are dependent on the type of protocol in use.

• DAOs may also thrive more in systems that employ flat meritocratic structures coupled with layered management where needed.

• Another effective prospect for DAOs is cooperatives. The key to this system is that instead of plutocratic token-gated voting, there will be a democratic one-user-one-vote by builders in the community.

Regardless of the experimentations with the different DAO models to improve democratization of ownership, a DAO is still in need of a functioning and efficient organizational structure.

Solving The DAO Data Problem

Author: Traver Normandi

🔑 Insights: Identity and decentralized social graphs enable DAOs to improve their data and workflows. New on-chain tools are helping DAOs collect detailed data beyond the range of web2 organizations and current DAO tools.

• Acquiring information can be difficult due to a lack of infrastructure, admin permissions, and incompatible data across platforms. An on-chain DAO stack would allow composable applications to leverage one core database: the blockchain.

• On-chain identity uses a single credential to deliver a user’s on and off-chain identity across the entire DAO tool stack. After its regularization, DAOs can adopt these identities to wield authority amongst valued stakeholders.

• On-chain transactions create data layers used by DAOs as leverage between contributors and the organization. This enables transparency and obliterates information asymmetries, making DAOs accountable.

• As a result of the on-chain governance cost, data solutions that transmit identity across on-chain and traditional web2 rails are currently being worked upon.

Multiplayer Creation: Unlocking Participatory Media

Author: 1kx.eth

🔑 Insights: Working in isolation while trying to satisfy the artistic needs of an audience has been the norm for creators. But with the emergence of web3, they can have a community participate in the creative process by connecting with individuals that align with their values, sourcing ideas within the community, and obtaining constructive feedback that could guide future projects.

• Multiplayer creation is the transformation of the creative process enabling multiple individuals to participate in one or more stages of the creative work.

• The individuals involved in this process participate in either of these stages: formation, coordination, production, value distribution, or post-release.

Multiplayer creation tools can transform a consumer into a creator and increase the quality of art released as it encapsulates the creativity of different individuals — turning on-chain interactions into a form of self-expression.

Hyperstructures

Author: jacob

🔑 Insights: Hyperstructures are crypto protocols that can run for free and forever, without maintenance, interruption, or intermediaries. They are free, unstoppable, permissionless, expansive, valuable, and credibly neutral. Builders and participants are also rewarded for creating and contributing to a Hyperstructure that serves society for many years.

• Creating ownership and governance in Hyperstructures should only be done where it is absolutely necessary.

• Hyperstructures are created to power not just one interface, but millions of interfaces.

• With web3, we can restructure the utilities of the internet of the past 40 years outside of private control, and create entirely new ones that seemed impossible before.

• For the sake of progeny, we must create Hyperstructures in their purest, most free, and most beautiful forms.

Progressive De/Centralization: A Playbook for Building Decentralized Applications

Author: kydo

🔑 Insights: Progressive decentralization is becoming increasingly popular in the crypto industry, though concerns have been raised about its efficacy. This playbook introduces a set of actions that builders can use to promote decentralization without directly breaching legal standards.

• The initial step is creating a protocol and product allowing contributors to give feedback without the hassle of regulatory challenges.

• It is also necessary to formalize the protocol development procedure and give the protocol foundation ownership.

• The product development process should be organized in the manner of a traditional business.

• A token might be introduced to manage the protocol development process.

🙏 Thanks to our Sponsor

There are many ways to experience community outside of the web3 space, but perhaps there is no better distillation of what it means to be a member a community than those feelings associated with rooting for a sports team.

Last year, State of the DAOs shipped an edition devoted to the intersection of web3 and sports, exploring how groups of fans are coming together to use web3 tech to crowdsource funds to purchase sports teams. This week, we offer a follow up article that explores the fate of WAGMI United, one of the first professional sports organizations to be bought by web3 enthusiasts and powered by a decentralized decision-making model through the use of NFTs.

The takeaway may be that while web3 technology is amazing for empowering fans, it’s important to have a broad sense of an industry and how it best works. As we work to integrate web3 tech into new industries, we must remember that it’s not a replacement for tried and true methods, but a way to augment those to up everyone’s game. And that’s a win for teams, for fans, and for crypto adoption.

After catching up on WAGMI United, take a look at the TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: BanklessDAO Writers Guild (KAF, Warrior, KingIBK, Quilia, Vi-Fi, Boluwatife, Kornekt, Trewkat, HiroKennelly, siddhearta)

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

🙏Thanks to our Sponsor

Game7 DAO

Game7 is excited to launch Summon, our novel DAO governance platform.

Summon is a community LiveOps tool that takes governance to the next level by making it easy for DAOs to measure the contributions of their members, and reward them in ways that go beyond money.

How it works: Each community member mints a Soulbound NFT that evolves as the member contributes to the community, making the NFT upgradeable and unique. As each contributor completes quests and tasks, they earn experience points (XP), which help them move up in rank and unlock features and rewards in real time.

By tracking, measuring, and rewarding contributions, Summon provides decision-making capabilities to those who invest time and effort into the community, as opposed to only those who contribute capital.

The result is a meritocratic governance model that distributes power and governing rights to the most productive members of the community.

👉 Sign up to the Game7 waitlist to experience Summon

👉 Follow Summon on Twitter

Is There Still Hope for Crawley Town?

How the Struggles of WAGMI United Highlight the Need for Unity and Community Support

Author: KAF

As a lifelong football fan and supporter of NFT technology, I am saddened by the situation WAGMI United is currently facing and would like to contribute in any way possible.

To give you some context, nine months ago, a group of web3 investors bought Crawley Town, a storied football team in England. Everything sounded promising and they were set for an exciting season ahead.

Unfortunately, things have not gone very well for them.

Despite all the negative news, their recent win over one of their direct rivals gives players and fans a glimmer of hope.

Let's see what happened.

How Has Crawley Town Fared This Season?

As a lifelong football fan and supporter of NFT technology, I am saddened by the situation WAGMI United is currently facing and would like to contribute in any way possible.

To give you some context, nine months ago, a group of web3 investors bought Crawley Town, a storied football team in England. Everything sounded promising and they were set for an exciting season ahead.

Unfortunately, things have not gone very well for them.

Despite all the negative news, their recent win over one of their direct rivals gives players and fans a glimmer of hope.

Let's see what happened.

How Has Crawley Town Fared This Season?

Co-founder of WAGMI United, Preston Johnson.

In April 2022, Crawley Town football club was purchased by WAGMI United after failing to acquire Bradford City. WAGMI is a group of American entrepreneurs and web3 investors with no prior experience in football, including influencers Gary Vaynerchuk and Daryl Morey, the president of the Philadelphia 76ers.

They arrived with grand promises, pledging to transform Crawley into the "Internet football team," providing fans with a significant voice, revolutionizing the broken way sports clubs are managed, and boldly taking League Two Crawley to the Premier League.

However, managing a football club proved to be more challenging than they anticipated.

It's been nine months, four managers, and half the season, and Crawley sits near the bottom of the table, fighting relegation.

The club has made headlines in the national and international press for all the wrong reasons – especially around Christmas and the New Year when the club got rid of star player Tom Nichols and fan favourite Glenn Morris, manager Matthew Etherington left after just 32 days in charge, and owner Preston Johnson sat on the bench away at Stevenage.

The owners' disconnection has caused the fans to rightfully explode, as can be seen through the #WAGMIout hashtag on Twitter.

Have NFTs Been the Cause?

The answer is Yes and No; let me explain.

As a fan of the Real Racing Club, I've experienced similar situations with corrupt presidents and controversies that didn't involve NFTs. In fact, many football clubs have seen fans become fed up with their management, as seen with the recent example of Manchester United.

Crawley Town's poor decisions cannot be blamed on web3 technology. The root of the problem may be a lack of understanding or experience with European football culture.

The fans and owners began on a sour note and as the saying goes, "a bad beginning leads to a bad ending.” According to co-owner Hunter Orrell, there were several areas where alternative actions could have been taken.

WAGMI United owners may have attempted to reinvent the wheel because successful ownership models already exist, such as Real Madrid's system where the “socios” hold decision-making power without the use of NFTs.

In sports, success depends on unity among fans, coaching staff, management, and players. As a player, you know the power of local supporters' chants on the field. To achieve this, it's essential to have a deep understanding of the sport and a strong connection with the community, especially for smaller teams like Crawley.

While web3 technology presents potential advantages for football, it's crucial to maintain some of the game's traditions. WAGMI's failure to embrace the web3 culture in Crawley may have contributed to their lack of success.

All this being said, I believe football can be ruthless as winning is everything. To keep fans happy, teams simply have to win.

Hope Prevails

Not everything is lost.

The recent victory against a direct relegation rival, Harrogate Town, has sparked a renewed sense of hope and optimism among the supporters.

With 12 games remaining in the season, the possibility of remaining in League 2 for another year has once again become a viable option. Each upcoming match is a critical final that must be approached with utmost determination and focus.

As the next game falls on Saturday, March 18th, I would like to take this opportunity to extend my best wishes and good luck to the team.

As a community, we often talk about the importance of collaboration and working together to achieve our goals. This is one such moment where we can show our support. Although mistakes have been made, it's vital to provide constructive support rather than criticism and insults.

The consortium has been clear with its intentions from the start, they are here for the long haul and they want it to be a success. So, let's unite behind the team to help them avoid relegation, and once the season concludes, evaluate what went wrong to make necessary improvements.

WAGMI!

Actions steps

📖 Read DAOs Give Fans a Sporting Chance | State of the DAOs

⛏️ Dig into web3 projects aim to create engagement between fans and sports leagues | Rachel Wolfson

🙏 Sponsor: Game7 DAO is launching Summon, the new, gamified, meritocratic governance tool for DAOs.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

Community Health - An Imperative for Web3 Communities

Author: peth

🔑 Insights: The web3 space is full of uncertainties and challenges and this makes monitoring the health of communities paramount. Communities consist of individuals who come together to interact and share a common goal. There are factors that drive community health and others that inhibit it. Overall, keeping track of community health is vital to the growth of decentralized organizations.

• Challenges surrounding participation and engagement in web3 spaces have increased the need to look into community health.

• Community health is essential for web3 communities to survive and thrive, while those who neglect it will scatter and fragment.

• A community is composed of multiple layers, including individuals, subgroups, cliques, and the broader ecosystem. These layers serve as the basis for gathering data to evaluate community health.

• Striking a balance between an overall community ethos and vision while nurturing sub-groups for enrichment and diversity is essential for maintaining a healthy community. A community is healthy when it meets members' needs, promotes relationships, advances collective goals, and exists in a healthy ecosystem.

An Introduction to: “Governance as Conflict: Constitution of Shared Values Defining Future Margins of Disagreement”

Author: BlockScience

🔑 Insights: While seemingly contradictory, conflict is a valuable tool to optimize the functioning of any organization or group. A group of individuals with similar goals adopt certain structures and governance mechanisms that translate, directly or indirectly, the members’ choices.

As the organization continues to achieve its goals, certain situations arise, such as loss of individual autonomy and an increase in distinctiveness of member preferences. These two end results coalesce into disagreements, debates, and eventually conflict.

Conflict can be mitigated by:

• Constitutionalizing and streamlining the set of values and ideals that make it to the organization.

• Dealing with conflict using system division tools such as parallel systems, horizontal and vertical systems, subsidiary units and more.

Conflicts can be resolved by:

• Integrating the court system in modern-day organizations for resolving differences. This protects the interests of individuals from majority ruling.

• Using computer-aided governance solutions by utilizing machine learning.

Me and My Digital Self

Author: Samantha Marin

🔑 Insights: The idea of a digital spirit and an algorithm more robust than oneself is fascinating. When we hop onto the internet, we tend to create a smarter, prettier model of ourselves, sometimes to the extent that is not really us anymore. To see the bigger picture of the DAO space more easily and to help navigate the often scary digital world that we live in, it’s helpful to view digital identities as tools used by people.

• The chronically online are the chronically lonely people.

• IRL spaces are insufficient in supplying the needs of humans to see and be seen.

• DAOs are drawing rooms for digital identities with different inspirations.

• The motivations of digital identities create the direction for the DAO.

Bankless Academy - A Gitcoin Passport Case Study

Author: Rohit Malekar

🔑 Insights: Certain actors exist who access social platforms on the internet with false identities. There is a need for a structure that detects such actors and denies them access to the platforms. This case study assesses how Bankless Academy utilizes Gitcoin Passport to stop malicious actors from earning educational credentials.

• Bankless Academy is an open source and freely accessible educational platform that offers lessons to web3 users. Upon completion of the lessons, users can mint on-chain badges,  indicating progress in the lessons.

• Gitcoin Passport enables users to link their credentials from web2 or web3 sources, like a Google or Twitter profile, or an ETH balance or Snapshot history. Having presented a trusted credential, users can get a stamp generated on their passports without storing any of their data.

• While integrated with Gitcoin Passport, Bankless Academy users were required to have some stamps to claim the badge for each lesson. This gives users unique identities, preventing sybil attacks.

• The stamp requirements of Bankless Academy show an increase in the average Gitcoin Passport score of participants before implementing the mechanism.

Structure Without Capture

Author: Dave Ehrlichman

🔑 Insights: DAOs are falling short of their potential because, like all non-hierarchical organizations, they don’t have a structure to delegate roles, responsibilities, and authorities to get things done. Structure without capture means adopting “structure legos”, which are fit-for-purpose structures that unlock new capabilities in DAOs and is a way to give the structure its place within the self-organizing organism of a DAO.

• In DAOs, there is no mechanism to assign or ensure that the right people are claiming responsibilities. This is the tragedy of responsibility commons.

• Hierarchies create structure with capture.

• DAOs have evolved to take a network approach to coordination and favor collective decision making over unilateral control.

• Means of delegating or revoking roles and authorities in a way that still reinforces decentralization of power is needed to address the tragedy of the responsibility commons in non-hierarchical organizations.

DAO Spotlight: RnDAO

Author: Boluwatife

RnDAO is the abbreviated form of Research n’ DAO. It is a decentralised organisation that acts as an innovation center with a mission to empower human collaboration by operating as a groupware-focused enterprise builder that puts research first.

RnDAO is a DAO, funded by other DAOs, to develop research and tools to help the DAO ecosystem grow and reach its maturity. RnDAO believes that DAOs are an ideal part of web3 and the space has significant advantages. Some of the advantages are tapping into raw talent, risk mitigation, and a generous feedback loop, but to do this, and implement this seamlessly, DAO tooling is important. DAO tooling in this sense isn't something purely physical or tangible. It could be:

• Software applications, procedures and methods, or an accepted pattern of behavior

• Frameworks as mental simulations that can be implemented to design tools and processes

• Deep research into the knowledge and 'know-how' of the DAO ecosystem to ensure the application of adequate practices

RnDAO works as a research and development DAO. As it stands there are still no DAO experts, but RnDAO provides us with the opportunity to use tools to augment DAO processes.

How They Work

RnDAO plans on addressing the tooling process and knowledge gap in DAOs by drawing ideas from web2 joint initiatives. As envisioned, projects are developed through knowledge sharing and collaborative enterprises, which can lead to a model that enables a decentralized and collaborative ecosystem.

RnDAO’s vision is to have an "inter-DAO R&D Lab and Ecosystem hub combining deep Governance and organizational Design expertise with Human-Centered Design, to offer collaborative R&D and community."

Join the Community

If you're interested in knowing more about how this works, connect with them on Twitter or read the various published articles they have released on their Mirror page.

🙏 Thanks to our Sponsor

Community health is essential for the success and longevity of a DAO. A healthy community leads to increased engagement, resilience, and adaptability, allowing the DAO to develop and grow towards fulfilling its purpose.

Currently, community leaders don’t have good metrics to assess the health of communities. Low-impact web2 metrics like followers, likes, and retweets are insufficient to gauge member engagement or identify deep insights into the needs of a community.

This week, we take a look at a new community health framework developed by TogetherCrew, a project incubated by RnDAO. Their practical and simple dashboard gives community leaders insight into the functioning of the various human systems within the DAO, allowing them to respond to high-impact data on how the community operates, its communication patterns, member behavior, and sentiment.

Next, we take a look at Meta-Governance, a new service being offered by the BanklessDAO DAOStewards. Meta-governance is governance-as-a-service, offered to other DAOs or web3 communities. Meta-governance is intended to strengthen community governance procedures with services ranging from passive interventions like voting on Snapshot, to active interventions like drafting proposals and engaging in forum discussions.

Finally, we want to highlight the work of our new sponsor Game7 DAO. This week they are launching Summon, their new DAO governance platform at ETHDenver. Summon is designed as a meritocratic governance model that distributes power and governing rights to the most productive members of the community. By tracking, measuring, and rewarding contributions, Summon gamifies the contributor journey to build a healthy community around engagement.

Building a healthy community is a crucial aspect of the success of any organization. From tools and services to incentives, we are here to share various approaches that can be utilized to foster a thriving community, helping to drive the growth and sustainability of a DAO.

Contributors: BanklessDAO Writers Guild (Ashish G, Sandeepdas, Lucent1, Quilia, Vi-Fi, angelspeaks, HiroKennelly, siddhearta)

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

🙏Thanks to our Sponsor

Game7 DAO

Game7 is excited to launch Summon, our novel DAO governance platform at ETHDenver this week.

Summon is a community LiveOps tool that takes governance to the next level by making it easy for DAOs to measure the contributions of their members, and reward them in ways that go beyond money.

How it works: Each community member mints a Soulbound NFT that evolves as the member contributes to the community, making the NFT upgradeable and unique. As each contributor completes quests and tasks, they earn experience points (XP), which help them move up in rank and unlock features and rewards in real time.

By tracking, measuring, and rewarding contributions, Summon provides decision-making capabilities to those who invest time and effort into the community, as opposed to only those who contribute capital.

The result is a meritocratic governance model that distributes power and governing rights to the most productive members of the community.

If you’ll be at ETHDenver, come to the Game7 booth (#670) and chat with the Summon team.

👉 Sign up to the Game7 waitlist to experience Summon

👉 Follow Summon on Twitter

A Science-Based Approach to Community Building

By Ashish G

How a team of data scientists, DAO governance experts, and DAO enthusiasts are developing an innovative framework and community building tool to diagnose the health of DAOs

In the middle of 2022, a team of DAO enthusiasts came together with a shared hypothesis that DAOs are essentially flying blind when it comes to building real communities. The team believed that the existing DAO tools were only offering basic audience-related metrics that were developed for web2 projects and that the existing community tools did not provide the insights required to develop effective communities to underpin DAO-led projects.

As a start, the team decided to understand potential users perspectives and undertook market research with web3 community leaders. The findings of the research reiterated the team's hypothesis. It showed that community leaders worry about a range of issues related to their communities, such as the health of their community, member engagement, and how members identify with the community, and they wanted to get more detailed insights into member activity. The team also studied the existing DAO tools and confirmed that there is a gap between the needs of community leaders and the tools available. While community leaders want deep insights, the existing DAO tools mostly tracked low-impact metrics, such as retweets and number of community members.

This insight led to the formation of TogetherCrew. The project is being incubated at RnDAO, an entity with the mission to empower humane collaboration through the dual approach of research on DAOs and venture building for new DAO tools.

A Better Way to View DAOs

To develop a web3-native tool, the TogetherCrew team decided that it needed to start from the fundamental question of how we should view a DAO community. In September 2022, the team released a whitepaper that proposed community should be viewed as nested systems that interact and depend on each other:

1. Individual members

2. Relationships among members

3. Cliques

4. The community

5. Ecosystem

The whitepaper further proposed that a DAO's health is the aggregation of the health of these nested systems, just as a person's health is an aggregation of the health of many organs, which themselves are aggregations of the health of cells. Therefore, to measure a DAO's health, one needs to measure the health of these individual systems and then intelligently aggregate the insights. The framework has resonated with the web3 ecosystem and the project has received support from marquee projects such as Aragon, Aave, Polygon, MetaCartel, Near, and Celo.

What Is a Healthy DAO Community?

The TogetherCrew team proposed that for a community to be healthy, each of the subsystems needs to be healthy. And collectively, the DAO should advance its goals in the short term, while building resilience and adaptability for the longer term. Therefore, a healthy DAO:

1. Satisfies the needs and aspirations of its members.

2. Promotes healthy relationships and functioning subgroups.

3. Advances its goals.

4. Shows the capacity to be resilient and adaptable to shocks.

Our tool measures parameters of the individual systems to evaluate their health. And an aggregation and analysis dashboard provides a view of the overall health of the community.

From Data-Rich to Insight-Rich

DAOs live online and have a large data footprint, but this data has not been effectively harnessed yet. To add to the challenge, the current analytics techniques were developed for social networks or traditional organizations.

TogetherCrew is developing an analytics tool that ingests existing data from a DAO’s digital properties and requires minimal effort by the DAO community team to implement.

The team’s 'magic sauce' is implementing and interpreting network science measures in the context of the digital platforms that DAOs use.

With this approach, the TogetherCrew team can convert the firehose of DAO data to a dashboard that provides practical insights into the different aspects of a community's health. The dashboard provides measures on how a community operates, its structure, its communication patterns, member behavior, and sentiment. It provides community leaders with lead measures and layered insights into their operations.

Case Studies

The TogetherCrew team has done a range of DAO evaluations. This includes a contributor community of around 100 members, to a product community with nearly 50K members. To illustrate how DAO leaders can derive a wide range of insights and recommendations through deeper analytics, a few examples are shared below:

A DAO wanting to understand the impact of governance on its community - The TogetherCrew team studied the aftermath of a protracted discussion around a contentious vote, across a range of measures. At an aggregate level, the Project was operating well, but members reported feeling burnt out. In terms of sentiment, while the members still believed in the project, they were feeling less connected to other members of the community. There was also an increase in the number of disengaged members. This analysis by TogetherCrew provided some targeted action points for the DAO leadership team.

A DAO wanting to be more resilient - The TogetherTeam undertook a sensitivity analysis that simulated the impact of some active members dropping out from the DAO. The simulation showed that the communication structure could potentially break down if these members were missing. While the DAO was currently healthy, it needed to build a wider base of core community members to ensure its resilience.

A contributor DAO facing scaling challenges - An analysis by TogetherCrew showed how the DAO was missing out on development of domain leaders and project-focused subgroups

Science-Based Community Building

While it is still in its early days, these implementations have reaffirmed the benefits of a science-based and web3-native community building tool. The TogetherCrew team believes that its tool will play a pivotal role in the future of community building. The tool will endow community leaders with new superpowers to help them understand the root causes impacting community performance, track KPIs, optimize member onboarding and activity funnels, strengthen member engagement, support vital members, and automate tasks.

If you would like to understand more about the tool or explore an implementation for your DAO, check their website or join their Telegram group.

Actions steps

📖 Read How do we measure community health in DAOs? | RnDAO

⛏️ Dig into How to build, manage, and grow your DAO community | Aragon

📚 Learn DAO health: 9 starter metrics | TalentDAO

🙏 Sponsor: Game7 DAO is launching Summon, the new, gamified, meritocratic governance tool for DAOs.

Governance-as-a-Service

Author: Sandeepdas

When it comes to organizing web3 communities, governance is critical. The fundamental ethos of decentralization drives the idea that governance of web3 communities should be owned, managed, and conducted by the community members themselves — and no one else. Giving away this important responsibility to an outsider, or a group of outsiders, is not a welcome move, and some believe it signifies a governance failure on the part of the community in question. Dire predictions of “outsiders being mercenaries” who will destroy the community frequently crop up. This thinking goes even deeper, wherein any form of compensated governance is considered a taboo.

Amidst the widespread prevalence of this thinking, we are starting to see changes in the way DAOs are governing themselves. In BanklessDAO, we have started to provide governance-as-a-service, or “meta-governance,” to partner communities.

Meta-governance can be simply defined as governance services offered to a DAO or non-DAO web3 community by a group of governance experts. These services exist on a spectrum and can range from something as comprehensive as running the whole governance function of a DAO to something more light touch, which can involve helping to draft and finalize governance proposals for community members to provide feedback and vote on. This spectrum of services can be defined as an “active governance to passive governance” spectrum, where “active” means more in-depth involvement, and “passive” tending towards more light-touch involvement.

Here is an example of the kind of active and passive meta-governance activities that outside governance experts can conduct. This is by no means exhaustive because the nature of governance itself in web3 is a highly dynamic field.

External parties who can participate in the governance activities of a web3 community can come in different forms, with some being more common than others. These include:

• DAOs participating in the governance of other DAOs (common)

• A group of governance experts working as an entity participating in the governance of a DAO or web3 community (quite a few instances)

• An individual participating in the governance of a DAO or web3 community (rare)

After understanding who can participate and in what capacity, we need to understand how they participate. The most common method of governance participation in a DAO or a web3 community is voting via the DAO’s or community’s token. If the DAO or community does not have a token, then the polling is simply a tally of votes (for, against, abstain). Meta-governance is more concentrated towards governance using governance tokens (the ones that the community uses to vote with) and less so when the polling is done simply by counting votes. This is driven by the fact that external governance expertise is needed when a web3 community is large and complex, and not so when it is small and can be easily managed by the community itself.

The above definition holds true, but will continue to evolve over the next few years as DAOs start inviting non-DAO entities to participate and vote in their governance processes. Imagine the complexity and dynamism when entities like web3 VCs, angels, and web2 institutions start participating in governance. Some of this is already happening, which includes a16z’s controversial vote on a key Uniswap governance proposal.

As active and passive meta-governance gains adoption, we will see the emergence of delegates or external parties that represent groups of people. A “delegate” can be a DAO, an individual, or a group of governance experts. Each delegate is given a share of governance tokens for voting on governance proposals. There are both simple and complicated ways of allocating these tokens to delegates. When a delegate is voting on a DAO governance proposal, it means an external party has been granted voting rights.

Since 2022, there have been some meta-governance moves in web3.

The momentum behind meta-governance is now strong. DAOs and other web3 communities have dropped their egos and have started to realize the value of involving external governance experts in shaping and strengthening their governance framework and processes. As external parties start to bring more value to governance, the perception that they are “mercenaries” will gradually disappear.

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

Games Over Governance: Recentering DAOs on Coordination

Author: 0xJustice

🔑 Insights: The topic of governance dominates discussions on DAOs, but the effectiveness of DAOs is dependent on the strength of coordination. If DAOs are appropriately structured as decentralized game engines they can bring the chaos of governance and the coordination dilemma into order. This can be achieved by building with coordination at the center and only adding governance as needed. With this in place, other steps can be taken which includes:

• DAOs should reward outcomes, not activity. These rewards can act as incentives even as web3 is patterned towards partnership. This pattern should not be neglected since it is a fundamental basis of DAOs.

• DAO coordination games should incentivize continued playing and not require any player's perpetual involvement by being self-sustaining and encourage beneficial replication. This can be done by creating graduated contribution rewards and encouraging on-protocol game replication.

• Governance cannot be eliminated, but a balance that harnesses the advantages of automation and programmability must be pursued. Using the multiplayer game structure to attain coordination, the games could take any form, and there doesn't need to be one single game of the DAO.

Seeking a Revamp of the Concept of DAO

Author: eaglelex

🔑 Insights: The concept of DAOs as the future of business and work has been undoubtedly brought into question during the bear market. Basic DAO accounting has shown DAOs to be highly inefficient when it comes to revenue generation and managing costs. Nevertheless, the concept of “DAO” stays alive and is more vibrant as builders and tech enthusiasts continued to work on innovative tooling, treasury management systems, and new ways of coordinating efforts. For DAOs to continue to thrive, they need to focus on:

• Developing reliable governance models that newcomers can adopt is essential to the future success of DAOs.

• Decentralization is key in fostering a credible narrative for the future.

• Framing a viable and efficient connection between the legal entity and the governance expressed on-chain is a legal challenge in DAOs.

• Adopting a bottom-up approach is a possible solution to help developers and communities in DAOs.

Top 5 Impact DAO Categories Explained

Author: Deepa

🔑 Insights: Impact DAOs are decentralized autonomous organizations whose core purpose is to do good for the people and the planet. They occur in five major categories:

• Enabler: These DAOs enable impact through training, funding, and other infrastructure support.

• Climate: These are DAOs engaged in climate change mitigation. They focus on agriculture, carbon credits, land regeneration, and tokenization of natural assets.

• Social Impact: If a DAO’s mission is to improve the lives of people, then they fall under this category. Their operations vary from social and financial inclusion, hyper-local mutual aid to humanitarian aid.

• DeSci: DAOs involved in scientific research, funding, and innovation own this category. DeSci DAOs can be further categorized into research publishing, funding, or scientific innovation incubators based on the nature of their core activities.

• Network State DAOs: These are the newly emerging category of Impact DAOs formed around network states which are highly aligned online communities with a capacity for collective action.

Building DAOs as scalable networks

Author: Rowan Yeoman

🔑 Insights: DAOs have been quick to experiment with was to restructure in order to preserve their potential and to reduce complexity, but the self-governing property of DAOs has been difficult to scale.

SuperBenefit is a body of explorers who have been working on redesigning DAO governance both on the small innovation scale and also on the larger network scale. Their goal is to construct DAOs as analytic units that consists of similar networked nodes, which can develop into scalable complex systems.

The core design is structured around a two-house governance system which divides into three arms of governance: governance at the community scale, governance at the operational scale, and governance at the team scale.

The model is designed around the observation that people come together around an inspired idea and build on it in the early catalyst stage by sharing governance tools and proposals. As the project develops it slowly evolves to a scalable governance structure. This model of governance will eventually leverage the effective means of carrying out governance across a network.

🙏 Thanks to our Sponsor

Subscribe now

We are still in the early days of understanding DAOs as a business model and need to keep experimenting to determine the best way to organize and govern ourselves.

One of the biggest challenges has been finding a business model that works. DAOs have had to grow up from their early days as a chat group with a shared bank account. This model might have worked during the bull market, but we have witnessed how poor treasury management and a lack of a coherent business model can bring a DAO to its knees during the bear.

This week, Azeem explores one possible model that might allow DAOs to thrive: a fusion of a startup and a hedge fund. Like startups, DAOs are well equipped to act on a specific mission or product and they need capital to get started. Hedge funds understand how to raise capital and generate returns for holders for the long term. By effectively managing the DAO treasury, they would allow the DAO to do what it does best: collectively act towards a shared goal.

A hybrid model that combines smart capital with the build-fast culture of startups might just be the solution we need.

Contributors: BanklessDAO Writers Guild (Azeem Khan, Warrior, kenichi, Teafeh, BOBOtoTHEmoon, HiroKennelly, siddhearta)

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

DAOs As Self-funded Startups

Author: Azeem Khan

After spending the last year working in DAOs, I’ve come to a conclusion I’ve yet to see anyone publicly discuss, despite many agreeing in private: most successful DAOs combine the smart capital deployment and management associated with hedge funds with the build-fast culture of startups.

It’s not that people are afraid to say it; it’s that they are just starting to see that it’s true. Traditionally, hedge funds and startups have been two very separate entities — hedge funds may even capitalize startups. But in the world of DAOs, where capital and creation are largely intertwined, it’s as if they’re two important divisions of the same organization. The problem is that few, if any, DAOs have been successfully run that way. Looking to the future, I believe the most successful DAOs will be run using this model. Bull markets don’t last and diversifying assets under management in a way such that it creates more runway for projects will be an integral step to allowing DAOs to mature in a crypto native way.

DAOs As Chat Groups With Shared Bank Accounts

The early iterations of many DAOs were built around this idea of having a group chat with a shared bank account. Communities cohered in Discord servers and then started spinning up ways to monetize their work to create a treasury. Some of these communities decided they would launch a native token. Maybe those tokens were airdropped to original community members, or perhaps they were put on the open market for people to purchase. Other communities did an NFT sale, and the token was then used to gate a Discord server. Token gating wasn’t always a requirement to join the community, but was one method used by many groups to create a sense of status — or community, depending on who you talk to — that drove the price up, making people want it even more. While different in a sense, both native tokens and NFTs enabled the DAO to accumulate a certain amount of shared funds that could be used by the community.

Whether native tokens or NFTs, the tokenization of the community enabled some DAOs to have treasuries valued at over a billion dollars, which is a shocking amount of money for a group chat, no matter how you want to spin it.

The Rise of NFT Communities

The early iterations of these internet-native organizations as chat groups led to DAOs that were formed to sell NFTs, often a 10,000 PFP collection. Besides keeping some of the NFTs in the community treasury, many of these DAOs also set up their smart contracts so that they would receive royalties each time an NFT was bought or sold, whether the price was going up or down. Royalties accumulated quite quickly for some of these DAOs, leading to well capitalized organizations with sustained revenue. Moonbirds is a great example of this new kind of project that combines fundraising with community building.

Why is this important? Unless the intent of the DAO was to collect and grow a large treasury and manage it appropriately, most of these successful DAOs were in a very interesting position. In a matter of no time, they were sitting on eight- and nine-digit treasuries, but there was often not a single person with decision-making power who knew what to  do with all that money.

DAOs Need a Business Model

Traditionally, if you’re a group or organization that decides they want to raise a very large sum of capital, you’ll likely have extensive plans for what you’ll do with the capital. This is fundraising 101. That wasn’t the case with these DAOs though. They sold the idea of a startup, community, or animal jpegs to people, and often made small fortunes in the process.

You might be wondering why is that a bad thing? Well, it’s not bad when you’re in the middle of a bull run and everyone thinks the price of your NFTs or native tokens will continue soaring forever. But that’s not how reality works. The euphoria always ends.

In the last couple of years, people were living in the middle of that euphoric period. A lot of these organizations weren’t set up in a way to maximize on the windfall, nor did they have any business model to guide financial decisions. If they had a coherent business model, then a bear market, like the one we are in now, wouldn’t matter as much - they could survive the drop in euphoria. These DAOs would be so well funded and capitalized they would be able to execute their mission knowing money was in the bank. Instead, many DAOs have had their treasuries decimated. This isn’t to say all DAOs are failing. DeFi DAOs like Uniswap, ENS, Gnosis, Lido, Frax, Aave, and some others are sitting on treasuries worth as much as or even many times more than Jay Z’s net worth.

DAOs As Startups

This is where DAOs tie back to being like a startup. A group of people get together around a shared mission, think of an idea, create something to sell, go out and sell it, receive money in the process, and then have a treasury.

The key differentiator is startups are holding a stable currency, like dollars. Maybe they went out and raised $30 million, but once that money was in the bank, it’s going to more or less have the same value a year from now, minus expenses. Where they need to focus is on making sure their burn rate works out in a way that makes sense. When startups are sitting on cash, they don’t ever have to worry that their pile of ETH or tokens may go down in price by 40% in a week, or that their stablecoins will collapse to zero, as we saw with UST last year. How can you run a company over the course of years if you don’t know how much money you will have next week? Imagine when Truepill raised $142 million in 2021, they woke up a month later to see that value had shot down to $60 million. In most instances that would lead to the failure of a company. Why would it be different for a DAO?

That’s the situation so many DAOs found themselves in this past year. They had treasuries that would have lasted forever, it seemed, but are now making cuts across the board. Could this have been prevented? Maybe not entirely, though I do believe had these DAOs onboarded more traditionally finance-minded people who understood web3, things could have played out very differently.

DAOs As Hedge Funds

If the treasury and the product/community of these DAOs were broken up into two separate divisions, run by entirely different people with different, relevant skills, the outcome might have been very different.

In hedge funds, the strategy is to raise large amounts of capital, and then work to increase that money over time. Essentially, they actively manage pools of capital with a variety of strategies. Sometimes those things are risk averse but often it’s more creative. They do things like buying assets with borrowed money or trading derivatives in an attempt to beat the market average. With the finance side in place, the product team could have continued executing the roadmap laid out for their communities. It would have been the best of both worlds, capital and community.

There were so many amazing opportunities DAOs missed out on in this last bull run. Massive treasuries have dwindled to almost nothing, with prices down across the board for all native DAO tokens. Liquidity is running low too, so trying to sell large amounts of those tokens wouldn’t even work, meaning those treasury numbers are misleading because any large sale would crash the token price. Then there are the NFT projects whose sales are down, their floor prices are lower, the price of ETH is a fraction of its all-time high, and on top of that, there’s a global recession that may drive things down even more. Wow.

Imagine if there had been people at these DAOs with a clear strategy rather than just staring at the numbers, wondering what to do with all that ETH. What if they worked on doing things like treasury diversification to make sure they were holding assets other than their native token or ether. Maybe they would have transferred some of those holdings into stablecoins to have a runway based on their burn rates. And treasury management doesn’t have to involve token swaps - managing buy and sell pressure on a token would have been possible with enough planning.

I know that there were companies out there trying to do this. It’s just that most of them were extremely unsuccessful, as they were too caught up in the euphoria themselves. Other times the organizations didn’t even think to manage their treasury at all, which leads us to where we are now.

One of the more exciting ideas could have been going down the mergers and acquisitions route. What if major voting rights to DAOs started to get bought in strategic ways? Even the notion that tokens and NFTs aren’t tied to equity, but you’re not precluded from raising strategic capital later on, is an amazing concept. Waiting until you’ve found product market fit would enable you to later sell equity in your company to strategic partners — like a gaming company deciding later on to only take money from Epic Games and Sony. It’s a fascinating thought experiment to say the least. The possibilities were endless, and that’s why in the future the smartest and most well-run DAOs will all be building on these business models.

Professionalizing Capital to Help Community

In hindsight, this all makes sense, but it was hard not to be caught in the moment during the bull run. The fervor caused a mania I suspect won’t happen again though.

In the future, the divisions of the DAOs will be separated as they are now in any other industry. Finance professionals from the traditional world interested in web3 will emerge with ideas on how to confidently maintain or grow treasuries to allow DAOs more runway. The tech teams building products to ship to the masses will be working on their own, removed from treasury worries. But all these teams will be working synchronously towards the same end, which will result in a never-before-seen fusion of startups and hedge funds happening within the same organization.

This future will truly shake things up.

Actions steps

📖 Read Why Decentralization Matters | Chris Dixon

⛏️ Dig into Crypto’s Business Model is Familiar. What Isn’t is Who Benefits | Jesse Walden

🧭 Explore The Best DeFi Business Models | Ben Giove

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

DAOs are not corporations: where decentralization in autonomous organizations matters

Author: Vitalik Buterin

🔑 Insights: DAOs have often been criticized for being inefficient and that they won’t compete with traditional corporations until they can optimize decision making. In this article, Vitalik argues against the ideal by posing three significant areas where the impact of decentralization is essential.

• Decentralization for making better decisions in concave environments: When making convex judgements, decentralizing the process can quickly result in confusion and poor compromises while relying on the wisdom of the crowds can produce greater results when judgements are concave. DAO-like systems with a lot of different input contributing to decision-making can be very sensible. In fact, those who perceive the world as being more concave in general are more inclined to see the necessity for decentralization in a wider range of situations.

• Decentralization and censorship resistance: A DAO or protocol must be able to function and defend itself despite external attack, including from huge corporate entities, as censorship resistance is the most commonly stated rationale for decentralization in crypto.

• Decentralization as credible fairness: DAOs have more to learn from the design of sovereigns (political science), not the design of corporate governance, because they do not have a sovereign above them and frequently explicitly engage in the business of providing services that are typically reserved for sovereigns. Predictability, robustness, and neutrality are valued over efficiency in scenarios where DAOs are performing nation-state-like tasks like providing fundamental infrastructure.

DAOs could revolutionize how startups are run

Author: Josh Drake

🔑 Insights: This article walks us through how crucial decentralized decision-making is in the web3 ecosystems. DAOs can revolutionize how startups run as their structures and values complement that of startups.

• Sole decision-makers can slow down critical decisions or cause a deviation from the company’s goal. There should be an encouragement of decentralized decision making as people get to participate irrespective of financial status, beliefs or ethnicity.

• DAO members are empowered to express concerns about how the DAO should run in terms of treasuries, governance, and operations.

• Individuals can access previously reserved opportunities and get incentivized to work together when they utilize decentralized networks as a part of a DAO structure.

More than semantics: “crypto” vs. “web3” is about what will be decentralized

Author: Jesse Walden

🔑 Insights: People often use crypto and web3 interchangeably, but the words we use matter.

• Web3 is a more inclusive and expansive term that expands on the foundations of crypto.

• Crypto is typically used to refer to distributed assets and protocols.

• Web3 focuses on advocating for the decentralization of consumer products.

• The future imagined by web3 is one of progressive decentralization, but this doesn't mean that all platforms supporting access to new ownership experiences will be owned like co-ops by their users.

Future of Venture Capital: Understanding the Rise of DAOs and their Implications

Author: Shubham Pandey

🔑 Insights: The article discusses the impact of the emergence of DAOs on traditional Venture Capital (VCs). DAOs could improve the current VC model by increasing diversity of funded ideas, decentralize decision making, and improve access to public capital.

• With the annual returns of VCs steadily growing, there has been an increase in numbers, especially in Asia. Also, in 2021, there was a 108% increase from the year before, with the growth of dollar volume invested around the world has risen to 92% YoY in the last ten years.

• In contrast to the VC centralized economy decision-making process, DAO VCs are based on communal decision-making and governance. It functions as a self-sufficient venture network for both startups and end customers. They are an innovative platform that enables retail investors to access the cryptocurrency market and gives start-ups access to a vast pool of investors.

• In recent years, the use of DAOs and the adoption of hybrid financing models is bridging the gap between VCs and DAOs, bringing more funding and participants into the crypto space. Despite DAOs' potential to replace VCs, they present a new way to diversify the crypto space and allow more significant participation by retail investors.

DAO Spotlight: PoolTogether

Author: Warrior

PoolTogether DAO is a protocol grant funded by MakerDAO. Since its launch in July 2019, PoolTogether DAO has been promoting financial health by encouraging prize savings. With over 12,000 members, each member can earn prizes by simply depositing funds in the protocol.

PoolTogether is built on the concept of “prize-linked savings account” and “no loss lottery” where you have the chance to earn prizes for depositing funds. It is a no loss lottery because if you don’t win a prize, you still have your deposit.

The prizes earned are funded by the accumulated interest from the funds deposited in each pool. Your chances of winning are directly proportional to the amount you deposit, so the higher the amount you deposit, the higher your chance of winning. As long as your funds stay in the pool, you can win. Members can withdraw deposited funds anytime.

There is an emphasis on maintaining security, simplicity, and speed of execution. Maker funded the first ever professional third-party security audit and there have been at least two more security audits since then.

PoolTogether DAO uses a token named POOL. It is solely used in governance of the protocol. The POOL token holders can make and vote on proposals regarding changes in the protocol. The total token supply is 10,000,000 POOL with the token being freely distributed to members.

PoolTogether DAO aims to help millions of people achieve financial security using the decentralized and open-source protocol. However, there are risks associated with its usage. The users are solely responsible for their deposit’s safety while interacting with the protocol.

The PoolTogether protocol was upgraded from V2 to V3. The new release comes with additional features such as:

• Larger prizes

• Deposit rewards for everyone in the pool

• Referral rewards for helping the pool grow

• New asset types, yield sources, and prize distributions for pools

• Instant eligibility for prizes

• Provable randomness with ChainLink VRF

• No admin keys for prize pools

The V2 pool is no longer accepting new funds, only withdrawals can be made.

To learn more about PoolTogether DAO, visit their website and follow them on Twitter.

Subscribe now

Starting in February, we are going to be featuring a weekly meta-governance section in State of the DAOs. At a high level, meta-governance is the name we’ve given to the practice of DAOs participating in the governance of other DAOs. On the ground, it’s contributors working hard to help further a mission and better the ecosystem.

As an introduction, we decided to sit down with ChatGPT and see what insights it could offer into the current state of DAO governance. TL;DR - ChatGPT would make an amazing DAO contributor.

As one would expect, it had some solid answers. When it came to why governance is important, it pretty much nailed it: it’s about alignment and direction. When describing the differences between on- and off-chain governance, it provided a useful example to illustrate the advantages and disadvantages of each. Regarding the major challenges facing DAOs, again, it really seemed to understand some of our struggles.

Perhaps the most insightful exchange was what role ChatGPT thinks AI could play in the future of DAO governance. You’ll have to read on for ChatGPT’s hot take on how AI could integrate itself into DAOs. So thanks ChatGPT — and see you in the halls of Discord.

After our DAO governance conversation, we share the TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.

Contributors: BanklessDAO Writers Guild (angelspeaks, Leah_par, KingIBK, Oluwasijibomi, Quilia, Vi-Fi, HiroKennelly, siddhearta)

This is the official newsletter of BanklessDAO. To unsubscribe, edit your settings.

Subscribe now

Talking DAO Governance with ChatGPT

The following unedited transcript was set with the following parameters for voice and tone: use friendly language as well as metaphors and examples for difficult points.

Why is governance important in DAOs?