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Three Key Takeaways on DAO Governance | BanklessDAO Weekly Rollup
Catch Up With What Happened This Week in BanklessDAO
Dear Bankless Nation 🏴,
Two weeks away from the official gap week and we can boldly say that the bDAO family deserves a break. We have been relentless this season, putting in the work each day, and making the most of this bear season. This week, we will once again focus on governance because it is an important topic at the moment.
Season 5 planning has kicked off in most, if not all, guilds and projects. With some guilds in the nomination phase for next season’s roles, and others holding elections, the DAO is set for a busy two weeks.
Speaking of roles, the Grants Committee’s election for three members is now on Snapshot. There are four contributors vying for a role, and details about the experience and approach each offers can be seen in the Forum post.
The Community Vote is also on the Forum. This is an opportunity to check consensus on key topics in advance of the Season 5 spec. This community vote is not final; it is simply to test support for various ideas which will be voted on formally on Snapshot before implementation.
Did you miss 0xJustice’s Making Bank episode about DAO governance a few weeks ago? Well, Elemental has you covered with a TL;DL (too long, didn’t listen) in this week’s editorial. He highlights three of the many relevant insights from the podcast that promise to be extremely useful in our pursuit of good governance.
If you’re in pursuit of some good weekend vibes, sit back and enjoy this edition of the Rollup and read or listen to the great content produced by bDAO this week.
🗓 Weekly Recap
🚀 Season 5 Key Dates
July 18 - S5 Spec V1
July 20 - GC Budget Reviews I
July 25 - S5 Spec V2
July 25 - GC Budget Reviews II
July 29 - S5 Spec + Budgets
August 8 - S5 begins with Twitter Spaces
NOTE: Community Vote is ending soon.
Ella Dane has put together an insightful report on the BanklessDAO Community Net Promoter Score (cNPS). This past month we saw a 15 point decrease from the June score — an all-time low. A quick analysis indicates that the main group expressing dissatisfaction are our Level 1 contributors.
One might think that this decrease in satisfaction is associated with people’s willingness or ability to contribute given the recent dip in the price of BANK, but that is not shown in the data.
The results showed essentially zero correlation between members’ cNPS scores and reported reliance on BANK to cover their cost of living. There was very low correlation between an individual’s reliance on BANK and their willingness to contribute to bDAO, and a very low negative correlation between an individual’s cNPS score and their willingness to contribute to bDAO based on BANK compensation.
Here are Ella Dane’s thoughts on the results:
Perhaps what people say is actually true: “I’m here for the mission” plays out in the numbers. It seems to be proof that those that remain contributing to bDAO, while they may have their complaints, are here because they believe in their guilds, their projects and their peers. They are not here because of some mistaken “up only” ideology.
This is an incredible statement about bDAO.
Ella Dane is seeking feedback on the results and ideas for questions that could be included in the next survey to help us identify the cause of this drop in contributor satisfaction. Your comments are welcome on the Forum post.
🎙 BanklessDAO Podcasts
We have prepared a set of questions related to your Web3 journey/experiences, and we’d REALLY like to know your thoughts on the questions asked!
All the questions are optional, and there are no personal info/details being collected. We hope you will choose to take five minutes to answer this survey; it will help us understand you as a bDAO member.
Are you new and lost in the weeds of endless bee-like activities within the DAO?
Do you want to have human-to-human time with friendly DAO contributors to talk more about your challenges as a new member and get some friendly advice?
Well, that's what the New Joiners Session is for. A human-friendly, no-bot-allowed chat session. Join us on July 18, 2022, to learn more about bDAO and how to get involved. Meet mentors who could guide you on your journey into DAO life and other new joiners who’ll become your fellow travelers.
To get plugged in and feel the BanklessDAO vibes, head over to the #calendar channel to RSVP.
Good Morning News is the world's first blockchain-powered decentralized news publisher and we are excited to bring you the news about opportunities to contribute! Subscribers can vote on the daily selection of stories, and anyone wishing to contribute as a writer, editor, or designer is very welcome. Story contributions are paid in PAPER.
Here's a link to join the Good Morning News Discord.
Three Key Takeaways on DAO Governance
Highlights from the Making Bank Podcast
The BanklessDAO Governance Solutions Engineers (GSE) team has spent several months laying the foundation of guidelines, processes, and shared understanding that will help BanklessDAO adapt and thrive as it grows. On a recent episode of the Making Bank podcast, GSE 0xJustice joined Droste for a wide-ranging conversation on the challenges and opportunities the GSE team is discovering as they tackle this important task.
Here are three big insights from that discussion:
1. It Starts With Source Control
0xJustice has a background in agile software development, and many of the terms and models he uses to describe DAO governance draw upon that experience. He likens the first major challenge the GSE encountered to that faced by enterprises doing new software system integration: the need to collect information from many different places to establish a single source of truth regarding the rules, guidelines, processes, and other documentation.
“We had our governance processes spread across many different sources. We had it on Snapshot. We had it on a wiki. We had it on Forums. To use the analogy of a massive, re-architecture of a software system, the very first step would be to move all of the code into source control before making any changes,” explains 0xJustice.
“What that looks like for BanklessDAO is crystallizing what we have right now in the form of a constitution and community handbook or community manual. And to get everyone to give a thumbs up to say, this is currently what we do.”
“Then secondly, introduce an improvement proposal process … where you say, ‘Here's the current state, this is the change I'm proposing.’ And then the community can make a decision on that. … Changes are not so critical because the community has the opportunity to make a mistake, roll back, and make further changes. It's organic. It changes. The process, though, is non-negotiable. If we mess that up, then there is no real machine to keep running.”
Source control for BanklessDAO governance is version 1.0 of the BanklessDAO Constitution and Community Handbook. The GSE also has laid out a framework for proposing changes to bDAO governance with the BanklessDAO Improvement Proposal (bDIP) template. While the bDIP process establishes a straightforward process of amending the Constitution and Community Handbook, the GSE is striving to have it include broader community feedback and input in the first version. It is currently posted for feedback and member vote for official adoption on the Forum.
2. It’s All About Incentive Engineering
“There are two big streams of data that come into consideration when you think about the health, sustainability, and longevity of the DAO. The one is technical tokenomic-related and then the other is sentiment. How do people feel about the DAO? Are they satisfied? Would they recommend it? What's their experience? If you have strong tokenomics and no one's happy, it won't last. And if everyone's happy but you don't have strong tokenomics, that won't last either. Basically, engineering and crafting changes to the community's operating system via the governance process is the tool to address both of those.”
Compared to the traditional corporate world, the open, permissionless nature of BanklessDAO removes many of the barriers between contributors and opportunities. A person can show up and start contributing to a guild or on a project on day one. The flipside of this is that without a compelling reason to remain involved, anonymous contributors — even if they’re project leads — can disappear without notice.
0xJustice explains further:
“The DAO space is exploding with opportunity. Promise at every corner. And the people's attention space is at a prime. It was at a prime in Web2. It's even more of a prime now because a talented person can go into one of a hundred different places and do their thing.
“We had yield farming in DeFi. We basically have contributor farming in DAOs. Now, DAOs put so much at risk by saying, ‘Here's this project, here's this initiative, the DAO's investing this money in it.’ And we get a quarter to half the way through it, and everyone evaporated because some other promising opportunity came up.”
0xJustice believes it’s vital for DAOs to create two-fold incentives for contributors with both an upside and a downside. DAOs need to ensure that contributors have more of their own skin in the game if they want to participate in the upside of something the DAO is investing in.
“Here’s what it could look like if I wanted a particular position with a lot of responsibility. I stake something of value. That could be locked BANK. It could be ETH. It could be anything. And then, I receive compensation as I fulfill my commission to do this thing. But here's the thing: I have an upside. So as long as I stick around and do my job, I get the income. I also have a downside because I don't just lose that future income if I disappear. I actually lose my stake, too.”
3. Sub-DAOs Are the Future
The decentralized nature of DAOs is incompatible with most traditional, legally recognized business structures. This makes conducting many of the business activities that are still necessary to do business in the ‘real world’ difficult. For example, most software subscriptions require a credit card or bank account for payment, which are hard for a leaderless, anonymous organization that’s not domiciled anywhere in the physical world to obtain.
“The issue of legal wrappers is super important for several reasons,” 0xJustice said. “Usually how this is framed is we're going to wrap the whole DAO in a legal wrapper. The problem with this, in my opinion, is that it’s frankly not possible. It's not possible practically, and it's not possible philosophically, because the fundamental property of DAOs is they're decentralized and autonomous … There's a ditch here, and if we're not careful, we can fall in that ditch, but if we're smart, we can do stuff in a way that we get all the benefits without the downside.
“This is where the cool part comes in. What you can do, is you can say the DAO is a pure DAO. We're not even going to attempt to put a legal wrapper on it. Any subunits, initiatives, or projects are free to use a legal wrapper for themselves. So Bankless Loans, Bankless Card, or any project can [set up a legal entity].
“The real amazing part comes with this next question. What is the connection between the subunit that has a legal incorporation and the parent DAO? That’s something that no one has cracked or even attempted. Because you need to have the sub-DAO still fall within the governance framework and parameters of the parent DAO or else it's not a sub-DAO at all. … You can have a legally wrapped sub-DAO that has some kind of stake that ties it to the governance system and enables that connection.
“And this dynamic will usher in the next epoch of DAO capabilities. Because up until now, the most a pure DAO can do is manage digital assets. When this connection between the legal sub-DAOs and the parent DAOs is solved, DAOs will own property, buildings, intellectual property, and they will push into the full capabilities of nation states.”
0xJustice also points out that multiple sub-DAOs also offer the flexibility to fit a range of different locations and activities. A parent DAO can set up fit-for-purpose sub-DAOs that are the proper legal entities to do business in certain jurisdictions or own physical assets.
“So now the DAO's using the law and not being used by it. And this brings in the next level of treasury diversification beyond digital assets.”
The full conversation between 0xJustice and Droste is available on the Making Bank podcast. Listen in to hear more details on contributor incentives, why the GSE is such a well-rounded team, the power of directly responsible individuals (DRIs), and more. And be sure to check out the podcast’s other episodes highlighting many other interesting people, projects, and important activities inside BanklessDAO.
Also, be sure to do your part as a bDAO member by reviewing the BanklessDAO Constitution and Community Handbook, and providing any feedback and questions you have. Then vote on the Forum for whether you agree that BanklessDAO should begin using this document as the framework to build the Web3 future.
Remember, governance is everyone’s responsibility.
There are currently three seats open for the Grants Committee’s next term (Seasons 5 and 6). The four candidates are paul🏴#1559, Ap0ll0517🏴#5781, jengajojo.eth🏴#5896 and Bananachain#6171. Check out this Forum post to understand each candidate better. Exercise your right as a bDAO member and vote!
Proposals in Discussion
BanklessDAO members from Peru are looking to establish Bankless Perú, a Spanish speaking node that can set up a local community and incorporate more people to the Bankless movement. Our national context presents opportunities to boost the use of blockchain, DeFi and digital assets through education strategies and particular publicities. The proposal aims are raising the required funds to kick-start this chapter.
Previously, this post would have been called a Temp Check, but we’ve decided to go with Community Vote to reflect the importance of some of the elements. For those who are newer to the DAO, this post serves to collect sentiments on specific DAO-wide topics and inform the Season 5 Specification. Discussion is not limited to the polls included in this post, so if you have an idea or change to propose for Season 5, please include a comment for discussion.
BanklessDAO has several redundant and unused channels, which leads to confusion and noise. These channels need to be condensed or archived. This post is a poll from the Ops Guild to grant permission to simplify the Discord.
✅ Action Items
📖 Vote on the Snapshot election for Grants Committee members.
😎 Tell us about your Web3 journey/experience.