gm and welcome to State of the DAOs!

If you have been working in web3 the past year the first thing we want to say is thank you. This has been a tough year for everyone and it is only by the work of those people with boots on the ground that we can build our way forward.

One of those builders is BanklessDAO member HAshBrown27, who takes a look back at his first year working in DAOs and finds that it reminded him a lot of his freshman year on campus. Working in DAOs can be exciting and liberating, allowing you to explore your freedom and contribute meaningfully to projects you care about. But like your freshman year, it can also be confusing and intimidating as we learn to find our place in this new world. HAshBrown reminds us that it is our intentions that allow us to keep learning and progressing, and that it is important that we take time to reflect on why we are here and what we are trying to build.

Next, we share some great news! Last week our friends over at Impact DAO Media published their online version of the Impact DAO book. In this guide to everything ImpactDAOs, they compiled lessons and insights from 30 founders and contributors to create a book for those who want to start or build their own Impact DAO.

The past six months the State of the DAOs newsletter has collaborated with Impact DAO media to promote their work studying ImpactDAOs. We are proud of the work they have done to bring this guide to life and sharing how crypto is “doing good” in the world today.

Finally, we share the TL;DR on some of the best 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 (HAshBrown27, Seneca52, angelspeaks, Leah_par, Oluwasijibomi, Lucent1, HiroKennelly, siddhearta)

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Web3 Freshman Year

Author: HAshBrown27

My first foray into Web3 began early this year when, after several months of binging on Bankless newsletters and podcasts, I summoned the courage to take my first steps into BanklessDAO (bDAO). Admittedly, I was reluctant to jump into an online community of any kind, much less one full of crypto-obsessed strangers. The more I considered it, however, the more inspired I felt to move beyond my comfort zone for a first-hand experience of a technological and cultural movement in the early stages of changing the world.

Now nearing the end of my first year exploring Web3, it occurs to me that many things about it remind me of my freshman year in college. For one, the DAO’s Discord seems like a large, virtual campus in which I occasionally feel lost looking for buildings and frequently mix up the start times of meetings and classes. For another, I find it nearly impossible to keep up with all the reading. Finally, as exciting as it all is, I still have moments of looking around and wondering if it’s the right place for me. Freshman jitters abound.

Something very different from college is there is no well-defined curriculum. The way I handled this was to look for ways to align my DAO adventure with several intentions I had set for the year. First, I wanted to develop the knowledge and skills necessary to conduct my financial life with cryptocurrencies and related tools. Second, interested as I am in the future of work, I wanted to experience becoming a contributing member of a DAO. Third, I wanted to begin building relationships with other people who shared an interest in the Web3 space. In many respects, I wanted to begin preparing to thrive in the future rather than continuing to hide from it.

First Grades Are In

Intention #1: learning the basics of how to navigate my financial life on the blockchain

My first goal was to gain a practical understanding of the basic skills needed to work with blockchain tools and cryptocurrency. After my first year in web3, I believe I have the basics down. I know how to buy and sell BTC, ETH, and ERC-20 tokens on exchanges and turn proceeds into cash. I have stored funds in hot and cold wallets, both of the custodial and non-custodial variety. I have learned how to send tokens from various wallets and keep my seed phrases secure.

Perhaps most importantly, I have learned how to use “crypto twitter” to pay attention to various thought leaders and be on the lookout for signs of trouble. As one critical example of this, after six months of holding ETH on Celsius, I picked up on various warnings about their business practices and was able to move my holdings out a month before the company’s meltdown.

I still have much to learn but for a freshman arriving on campus with very little knowledge, I am pleased with my progress here. Grade: B+

Intention #2: learning how to competently navigate and contribute to a DAO.

Honestly, as my first full season in bDAO (spring ‘22) approached, and even after three months of lurking, I was so confused by Discord that I wondered if I would ever find my way to making a meaningful contribution. The best approach I could come up with was to follow the advice of others who suggested I join a couple of guilds and make a point of attending weekly meetings. Possessing some education, skills, and experiences relevant to each, I joined the writers and project-management guilds with fingers crossed that opportunities would arise.

In the Writers Guild, I set a goal of being a regular contributor to one of its weekly newsletters and getting an article published. I accomplished each of these goals, joining the front-end team of the DAO’s Weekly Rollup Newsletter and submitting an editorial, ”The Secret Sauce of DAOs”, which was published in early June. I am proud to be published for the first time beyond the obscurity of a personal blog and happy to have checked the box of that goal.

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In the Project Management Guild, its first season as a guild, the roadmap of opportunities to contribute was less clear. Initially, I had an aspiration of teaching a workshop on Liberating Structures and facilitating an Agile retrospective for another guild. Though neither of these opportunities materialized, I was happy with the way I showed up for the majority of our weekly meetings and the consistent, quality attention I brought to the asynchronous conversation in our Discord channel. By attending meetings, and staying attuned to the work of both our talent and education workstreams, I believe I was able to share input at key moments in ways that helped move the guild forward.

Part of my desire to contribute to the DAO was to be rewarded for my work. When I first joined the DAO in January, I purchased 35,000 BANK (bDAO’s native governance token) in order to become a Level 1 contributor. Although I was happy to make that investment in the opportunity, as I approached Season 4 and gained a better feel for the ethos of the DAO, I wanted to earn my way into the community. Accordingly, I created the goal of earning at least 35,000 BANK, which felt like an ambitious goal at the time.

One of the highlights of my DAO experience so far has been Coordinape, a platform for DAO members to recognize each others’ contributions and to reward those contributions with remuneration and personal notes. I have been fascinated by Coordinape ever since I learned about it a year ago. While I remember thinking how revolutionary it sounded, at the time it did not occur to me that I would one day participate in such innovative, peer-to-peer compensation mechanisms. Now, fresh on the other side of giving and receiving in several Coordinape rounds, I’m happy to share that thanks to it and my guild contributions I have more than doubled my initial goal.

As a part-time student taking it slow I’m finding my way around campus and feel proud of the progress I have made as a contributor. Grade: B

Intention #3: to create meaningful connections with other early adopters similarly interested in the crypto economy and DAO life.

In comparison to the other intentions, this one feels harder to assess. The closest thing I created to a specific goal here was to establish a reputation for being a consistent, positive presence, and for following through on what I say I’m going to do.

While I believe I have made strides here I don’t think my time in the DAO, or body of work produced for it, is yet sufficient to qualify for a reputation, per se. That said, highlights here included my participation in each of the first two BanklessDAO Writers Cohorts. In that work I was proud to have one of my articles voted a weekly favorite and to receive gold medals for publishing 4/4 articles in both cohorts. Furthermore, through the experience of both giving and receiving feedback, I created connections with several people whose work inspired me and I hope to stay in touch with.

Another highlight here has included back-to-back seasons of regular contributions to the back-office work of the Writers Guild. Through this fairly simple work I have had the opportunity to be trained, to train, and work alongside others in ways I have found rewarding. Furthermore, thanks in large part to the consistent leadership of its role holders, I believe the Writers Guild has provided one of the greatest “homes” anywhere in the DAO space. Though a little tough to explain I’d say there is a sense that we are a part of something special together, a shared experience that, for many, will be the glue of connections that may flourish for many years to come.

As grateful as I am for the connections I enjoy, another part of me feels like I’m falling behind as I spend much of my bandwidth playing catch up. Some days that means figuring out new technologies like Discord and Notion. Other days it means reading, listening to podcasts, or following industry news on Crypto Twitter. I am still discovering how this world works and what I have to offer it, often wondering if it moves just a little too fast to be a good fit. This uncertainty shows up on the relationship front where I have not engaged with others as openly and confidently as I am accustomed to in the physical world.

Though I appreciate how I have shown up at times, and have connected with some great people, I have a lot of room for improvement here. Grade: C

A “Cool” Take on BanklessDAO

Much like when I first arrived on my college’s campus many years ago, one word that reflects what I like about web3 is “freedom”. Most importantly to me, I am free to go at my own pace and give my attention to the things I am most interested in. One of my favorite ways to spend time has been attending guild-and-project meetings as a guest where I get to listen in on what they’re working on and how they work together.

Among my drop ins, one of the most memorable was a visit to a Tokenomics Department call led by Icedcool. On the call he shared his recent experiences of meeting former bDAO members at conferences. He spoke of a common occurrence of people approaching him to say, “I loved my time with BanklessDAO. If there is anything I can do to help you guys, let me know!”. He explained further that such people are growing in number every season and spreading throughout the web3 ecosystem. As he talked an analogy occurred to me that cast a new light on why so many people may be drawn here, prompting me to speak up on the call.

“The people you are talking about, and their enthusiasm for supporting the DAO”, I said, “remind me of college alumni, and their relationship with their alma mater”. Soon after that another call participant chimed in saying, “this DAO as university analogy is interesting. I hadn’t thought of it like that before.”

I believe that DAOs, as experiential-learning laboratories to the blockchain world, have many parallels to the physical world university system. As students, whatever our age, we are learning the fundamentals of taking new responsibility for our finances. We are assessing our interests and talents and learning skills that will open paths to our best opportunities to make meaningful contributions. And, potentially, we are building relationships, personal and professional, that will be foundational to the rest of our lives.

For many, 2022 will be a year that lives in infamy for all the chaos in the crypto space. I can only imagine what people must think looking at it from the outside. Will web3 evolve to change the world or be driven by its bad actors off the face of a cliff? It is not for me to say. Either way I have learned a lot of cool stuff and connected with some great people. Whatever the future holds I will be grateful for my time here.

Actions steps

📖 Read 7 Essential DAO Skills | State of the DAOs

⛏️ Dig into 4 Simple Steps on How to Join a DAO

🎧 Listen Recommended Tips for Going DAOn the Web3 Rabbit Hole | Anay Sim from RabbitHole

Impact DAO Study

Impact DAOs Research + Book project is a decentralized, collaborative and open source project. The goal of the project is to publish a book on Impact DAOs that provides information, wisdom, and insights for new web3 entrants. To learn more about the project visit the Gitcoin grant page. If you’d like to follow their work they’ll be regularly sharing their learnings and DAO builder interviews on ImpactDAO Media. You can also follow the hashtag @ImpactDAOs on Twitter.

Why Impact DAO Book?

Who is the book for, why we wrote it, and how to read it

Web3 is more than the mainstream narrative portrays it to be.

It’s not about building a better portfolio but building a better world. This is why the founders of the web3 world are called “builders,” and this is the goal that motivates them.

Nonetheless, mainstream perception is shaped by mainstream media. This book is, therefore, our attempt to share a different story that remains largely untold and unheard, even though it is already beginning to shape the future.

The origins of this book can be traced to the founding of Ukraine DAO, an organization that seemingly appeared out of nowhere and raised $7 million from 3000 people on the internet thanks to the power of cryptocurrency. The initiative was entirely volunteer-run and made use of almost every web3 tool available to raise funds for Ukrainians suffering the effects of the Russian invasion.

The speed at which the DAO was formed and the effectiveness of its execution demonstrated a new, practical way of achieving ambitious goals for the benefit of a large number of people. Individuals combining in cyberspace and around a shared purpose to solve societal-level problems.

We were curious enough to dig deeper into this new model of doing good. We saw the potential of web3-enabled collectives like Ukraine DAO replacing the traditional nonprofit structure to become a norm for solving problems of every order of magnitude.

So, my friend, this book is for you.

You don’t need to be a crypto expert, a crypto advocate, or even crypto-curious.

This book is worth reading if any of the following apply.

You think crypto is a scam and nothing more. Dive into this book to learn how talented folks are building amazing coordination systems and having a far-reaching, positive impact in the world.
You have heard of crypto but do not know about the broader web3 landscape. Why is it that young people are engaged, and dreamers are inspired, and technologists, humanists, climate activists, and futurists are feeling the buzz? What makes it so attractive for them to build in it? Read on to find out.
You are interested in what doing good will look like in the future. Learn why nonprofits are not the answer to solving large-scale societal problems and how ImpactDAOs will replace them. The new model provides a brand new efficient way of doing good.
You’d like to know how DAOs are upending the traditional company. What does the future of work look like? How can you prepare yourself for it? It’s all covered here.

Why we wrote it

Our goal with this book is to provide a reliable snapshot of the current state of DAOs. There are a lot of misconceptions floating around, commonly held and re-iterated in prominent conversations within the web3 community. Unfortunately, this has led to a somewhat blurred narrative forming around the DAO concept. We wanted to set out the facts on ImpactDAOs, sourced directly from the DAO builders themselves.

To gather the knowledge for the book, we interviewed 30 of these builders. Conversations were held on a 1:1 basis for at least 60 minutes, aiming to receive insights from the Founder and the Contributor’s perspective. We were particularly interested to understand the Contributors’ view, as we believe the Contributor Economy will play a prominent role in humanity’s future.

The selection process that led to choosing 12 final DAOs to include in our study took one month. We prioritized experienced DAOs who had acquired learnings that others could benefit from.

The final list of 12 Impact DAOs spanned three categories - Enabler DAOs (enabling Impact DAOs making direct impact), Social Impact DAOs (helping the vulnerable), and Climate DAOs (helping the environment). The final group includes some of the foremost examples of “crypto doing good” in the world today.

In addition to conducting intensive research on our target group, we formed an Impact DAO of our own (ImpactDAO Media) to acquire hands-on DAO-building experience. As of the time of writing, this DAO is five months old, and we have learned many first-hand lessons about establishing and growing a DAO. Additionally, living the “DAO life” also helped us ask pertinent questions to our interviewees about this process, from seeding to scaling and the challenges therein.

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How to read it

Chapter 1 begins the book with a basic overview of the DAO concept, where it comes from, and where it is heading.

Chapter 2 digs deeper into Impact DAOs, a subset of the broader DAOsphere, with the core purpose of bringing about a positive impact on people and the planet.

Chapter 3 covers the 12 Impact DAOs that we studied, how they operate and how they “DAO.”

Chapter 4 provides an overview of the learnings and emerging patterns across the 12 DAOs, based on our conversations with the 30 builders.

Chapter 5 contains a look ahead into the future of work and doing good.

The Appendix acknowledges the contributors and the various production teams engaged in the bookmaking and a web3 and DAO glossary that breaks down all common terms in this subculture.

We hope you enjoy this book and are as inspired and excited to build the future as we are.

Mint on Mirror this iconic article from the book, The Definitive Guide to Impact DAOs and help us grow the Impact DAO movement.

The Team

Impact DAO Media

Ecosystem Takes

🔥 and 🧊 insights from across the DAO ecosystem

On-chain vs Off-chain Governance

Author: TwinFin

The degree of decentralization in web3 is based on how blockchain components are incorporated into governance. Understanding the best governance framework for your DAO is key to a healthy organization.

On-chain governance allows voting results to directly change a protocol’s codebase. The Tezos blockchain adopted on-chain governance to make itself self-upgradeable. They follow the proposal-exploration-promotion step where proposals are submitted, voted upon, and uploaded. Though on-chain governance guarantees better decentralization, it is not always the best choice.

Off-chain governance requires that an off-chain entity executes the will of the people. Off-chain governance helps minimize onboarding costs and foster participation, however it still requires human coordination at the execution level.

Most DAOs end up using a combination of on and off-chain voting to foster participation and gradually move towards decentralization.

Crypto doesn't have a UX problem

Author: mhonkasalo

Let’s face it, the crypto user experience can be pretty bad. It is easy to think that it is the UX that is holding back adoption, but the truth is that crypto is still not useful enough. This article focuses on what can solve adoption: making crypto fun and having the right incentives. As adoption increases, the product will gradually evolve and get better.

A Culture of Intimacy: a thesis for building enduring web3 communities

Author: Steph Alinsug

One of the foundational functions of a DAO is community building, but many people who work in DAOs are more concerned about building numbers and metrics than building connections. Building a community cannot be done without intimacy. Connections can built built in many ways, but among them developing a sense of empathy and mutual trust is important.

Intimacy can be built by making use of a shared language, challenging assumptions, and focusing on situational awareness. A community is an aggregate of multiple narratives, but strong connections between members creates alignment across these diverse perspective. Communities built on connection, empathy, and trust are more likely to endure difficult times and more likely to thrive in the future.

Introducing: Voting Validation

Author: Nathan VDH

DAOs, DeFi protocols, and NFT communities use a variety of tokens or NFTs to serve as voting power. This means the amount of token an address holds determines the impact of its vote on proposals posted on Snapshot. However, while voting is important, ensuring it is carried out in a democratic way is more important. This is where voting validation comes in.

Voting validation helps communities decide on who can vote on a said proposal by gating the voting process with Gitcoin Passport. This helps to assure that votes are casted by real humans and not bots. By adopting this strategy, you unlock possibilities for your DAO, including quadratic voting; which helps to reduce the voting power of whales, and give smaller users a bigger say in governance.

DAO Spotlight

Author: Lucent1

Metropolis, previously known as Orca protocol, is a community that offers a platform for DAOs to build, manage, and work on pods. They help create a permissions map for DAOs such that they can be discovered and accessed by leveraging the use of pods.

What are Pods?

Pods are gnosis safe multi-sigs with a permission layer for managing signers. Think of pods as interlocking building blocks for DAOs. They can be used to flexibly connect working groups into a single governable network.

Pods turn DAOs into highly networked, legible organizations by defining and connecting hubs of activity in organizations. Metropolis therefore, is a lightweight permissions wrapper around a Safe multi-sig wallet.

They envision DAOs as cities. They believe that if DAOs are cities, then the entire DAO landscape can be likened to something of a metropolis.

Why Metropolis?

Not every DAO has access to pods, which is why Metropolis has opened up beta access to a select group of DAOs. With access to the pods in Metropolis, DAOs have the opportunity to:

Have all their Safes in one interface.
Manage signers with zero fuss.
Give their Safe an identity.

With this beta access, DAOs are allowed to enable the pod module for existing safes and can also build new pods. However, it is important to note that Metropolis smart contracts do not interact with, or have access to, the assets in any DAOs's Safe. The contracts can only manage who is a signer on the Safe.

Metropolis contracts have also been independently audited by Consensys Diligence, Quantstamp, and the internal auditors at Safe.

How is a Pod Accessed with Metropolis?

In the case of pods, access to a pod is authorized through membership NFTs. These NFTs act like an office keycard. When you swipe into your office, your keycard is validated against a set of permissions to see whether or not you have access. Changing key cards is as simple as updating office access permissions.

Metropolis airdropped a Built permit NFT not long ago to select groups of organization and this gave DAOs full access to Metropolis.

Learn more about pods, access, integration and more using Metropolis here. Also get more update on Metropolis via their Twitter handle, @0xMetropolis

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