How to maintain a high retention rate of contributors in the DAO

Louis Albiverse proposed a framework called the “DAO Community Growth Cycle” in his recent article “Building a Tokenized Community”. He believes that if the DAO is to continue to grow, community leaders need to attract and recruit potential contributors and ultimately involve them. While this model is very insightful, I think this growth cycle needs one more step: retaining contributors.

In fact, the current cryptocurrency market is 100% an employee market. The number of job opportunities far exceeds the number of talented people. How to attract high-quality talent to your DAO has become challenging, but even harder is how to keep them engaged for the long term.

DAOs are different from traditional companies. DAOs enable the fluidity and flexibility of cooperation. But liquidity also makes it difficult for DAOs to retain the people who have always contributed and been influential. Additionally, this fluidity of work poses risks, such as active contributors being frustrated by the performance of those who are less active.

This is why contributor retention is one of the most critical metrics for DAOs and one of the most pressing issues that emerging decentralized organizations must address. The growth, expansion, and mass adoption of DAOs will only follow if the current issue of contributor participation is resolved. When this problem is solved, more and more DAOs will continue to grow due to their long-term contributors, which will also allow their communities to gain attention from people outside the crypto space and attract more new contributors, thus reinforces this positive feedback loop.

The million-dollar question now is how the DAO can retain the best contributors and keep them engaged for the long haul to create a strong enough community. How to use the new tools at your disposal to solve this problem? How can a paradigm shift in how individuals collaborate in a DAO be turned into an advantage?

This article will explore how culture, tools, and ownership can help DAOs maintain high retention rates.

What do contributors want?

In recent years, many researchers have investigated retention, productivity, and supportive cultures in traditional organizations. For example, the key knowledge and models developed by organizational psychologists provide a good insight into the basic elements of a DAO.

While there are many ways to positively increase employee well-being, the following three specific factors have a lasting impact on employee retention in an organization.

  • Culture – Organizations can create a strong culture and share a long-term vision and values ​​with contributors.
  • The right tools – Organizations can give contributors the tools they need and make collaboration easy.
  • Autonomy/Ownership – The organization gives contributors sufficient flexibility and ownership of the project.

Let’s take a closer look at these three elements.


Recent McKinsey research shows that employees at traditional companies leave for two reasons: a lack of belonging at work (51%) and a lack of feeling valued by the organization (54%). In short, in order to retain employees, companies need to give employees a sense of purpose and community.

And that’s exactly what the DAO and Web3 ecosystem can provide.

Traditional companies have long tried to create a strong culture and create a sense of belonging. However, the main purpose of a company is to make a profit, so culture is often ranked after making a profit and gaining new market share.

A DAO, on the other hand, is a virtual space where people who are passionate about the same thing decide to come together to achieve lofty goals. It’s not really about work, it’s more of a culture, because a group of people come together to create what they expect to create. In a DAO, culture comes first and products and projects come second, as opposed to a company.

Internally, because DAOs are designed to lack the hierarchy of traditional entity organizations, they are always committed to supporting and helping contributors through culture and the goals they pursue.

Highly successful DAOs build a strong culture through the following 5 key elements.

  • Shared vision with contributors – Community leaders need to find a common theme that unites community members. Then, a strong vision must be articulated around this common theme and clearly shared with community members. It lays the foundation for a great culture by creating a community where people with common interests learn and grow together with a shared vision.
  • Empower contributors – A successful DAO makes its contributors feel that the success of the project and culture cannot be separated from the credit that comes from everyone. By giving them ownership, you can better attract the best talent and retain the best contributors.
  • Understanding Community Members – Successful DAOs have a deep understanding of community members with different roles and provide them with appropriate tasks. By understanding members’ experiences in different DAOs, it will make it easier to develop incentives, cultivate values, and create events and specific group chat groups.
  • Build Trust – Building a strong culture also builds trust. Not only is it important to build trust among members, but it is also important to build trust with those outside the community. In order to build this trust, the openness and transparency of the Incense Project is necessary. Another good practice is to hire a professional to facilitate communication between teams.
  • Strong Values ​​- The clearer you are about your goals and values, the easier it will be to motivate new members to join in and work together. Contributions will only last longer if members fundamentally endorse the project and share the same values.

These five elements are highly effective in creating a DAO culture and helping DAOs retain their most valuable contributors.

But building a great culture is only the first element of better employee retention. It will also be difficult to retain active community members without the right tools and enough flexibility.

tools for success

In order for contributors to continue working on the DAO, there also needs to be the right tools.

Fortunately, social tokens, a virtual currency that drives DAOs, have shown significant advantages in using tools to enhance contributor coordination. In fact, there are many new tools available to community leaders to manage the day-to-day needs of their contributors and harness the power of social tokens to make the whole process simple and reliable.

The fact that many actions can now be performed “on-chain”, i.e. secured through the blockchain, by leveraging cryptocurrency mechanisms, further facilitates the entire process.

Multisig wallets are one of the tools that DAO contributors use on a daily basis. A multi-signature wallet is a cryptocurrency wallet that allows you to manage your community’s cryptocurrency holdings and to select a predetermined number of signatures to confirm transactions. To prevent unauthorized access to this wallet, the execution of each transaction needs to be confirmed by multiple team members, so no one can take all the funds, as this requires the authorization of all other members. Multi-signature wallets give contributors ownership and make the DAO treasury open and transparent.

But it’s not the only new tool that really simplifies the daily work of contributors. For example, leaders of traditional companies hold their employees accountable to vote on the company’s future strategic decisions, but this process is complex. There are other solutions today, such as Snapshot. Snapshot is a platform that helps DAO leaders easily set governance power, allowing specific members to vote on proposals.

DAO tools form a huge ecosystem, and in order to retain high-value community members, it becomes critical to mine and use those community-valuable tools.

Communication tools such as Discord, Telegram or Geneva are essential. In fact, McKinsey research shows that open meetings and immersive group meetings are effective at helping employees align their daily work with the mission of the organization. Compared with traditional companies, DAOs need to face the problem of asynchronous communication more. In a DAO, contributors tend to be distributed around the world, and most of them do not work full-time for the DAO. To avoid this lack of communication, it is important to do things like create a channel in Discord, set up weekly meetings, hire a scribe who will take minutes, etc….

In addition to communication tools, workflow tools are also essential since there is no strong hierarchy in DAOs. In fact, in many DAOs today, there is a vicious circle where DAO leaders want members to initiate initiatives, but members don’t know where it makes sense to start, and end up deadlocked. So without a robust workflow, potential contributors quickly become frustrated and ultimately unable to contribute.

To overcome this problem, it is necessary to create guilds (or workgroups) and provide the required accessible documentation within each guild. Weekly meetings, easily accessible task lists, easily accessible documentation with names of guild contributors (people to contact in case of questions), etc. are all necessary for a DAO…currently Most DAOs are still using Google Suite (created for Web2 use cases), so there is room for improvement in this area.

DAO leaders can also set up tools to boost employee confidence, or to encourage behaviors of kindness and support, two key factors that make contributors happy at work. These behaviors are enabled by a Discord bot called


Finally, DAOs must provide autonomy and flexibility, and retain their contributors with the right tools and a good culture.

Few people like gratuitous censorship, and plenty of research shows that autonomy can inspire positive outcomes. Autonomy often comes from a person’s inner voice and control. DAOs are inherently liquid and provide ownership and independence to a large extent.

The flexibility provided by DAOs is also a great advantage, as DAO leaders can provide flexibility for contributors to only work on tasks they like. Contributors can choose to leave after completing a project. The goal of a DAO is not to involve contributors in every project, but to develop a culture and workflow strong enough that contributors can come back at any time.

One disadvantage of DAOs is that, due to the lack of a proper hierarchy, contributors sometimes need to put some work into the project and get it done on time without specific instructions, based on trust in long-term goals and culture.

There is a fine line between being overly flexible and under-flexible, and this line may vary across DAOs based on their contributors and their culture.

Flexibility also needs to be supported by ownership. The core team should hand over ownership of the project to contributors, let them vote on important decisions and future tasks, and allow contributors to invest in the DAO and take ownership of the company by taking stakes. In Web3, incentives are critical.

In the end, I want DAO leaders to reward their contributors with native tokens. Having tokens is like having in-game ownership and skins. By doing so, the DAO leader can attract and retain contributors with more ownership stakes.

structural pattern

On top of all these management practices, there are some good structural models that can be built to retain contributors. In the second part of this article, we will explore the two main patterns and how they can help DAO leaders.

Reward Mode (PUSH Mode)

The reward model is designed to convince them to stay with benefits and rewards.

A good example of this pattern is what the Nouns DAO is doing. They are working on an experimental attempt to improve the on-chain avatar community. There, there will be a new avatar every day, and then you need to win the auction to get it.

Since 100% of the auction proceeds are sent to the Nouns DAO, Nounders will choose to reward themselves with nouns. For the first five years of the project, every 10 nouns (#0, #10, #20, #30, and so on) will be automatically sent to the founder’s multi-signature wallet to be attributed and shared with the project’s founding members ( 10% of supply in the first five years). This inspired the founders of Nounders to execute the project as a long-term plan.

This model also provides stability for long-term contributors, which is a great advantage in an uncertain space like Web3.

Another great example is what the leaders of Forefront are doing. Through the liquidity mining program, they allow core contributors to invest in the DAO with a vesting period of 1 year, which means that contributors cannot withdraw funds within a year. By doing so, they incentivize contributors (and now investors) to work hard and allow the project to grow.

The last example is what the Global Coin Research community is doing. The community is divided into three levels (pioneer-alpha-gold), and the minimum number of tokens to enter each level increases step by step. Every month they reward their members proportionally according to their tier, incentivizing them to become Gold members and hold their tokens long-term.

This structural model is also conducive to accelerating the distribution of ownership, that is, “as soon as possible to distribute a certain number of tokens into the hands of high-value contributors”. Through this model, DAO leaders also increase the ownership of contributors and further decentralize the community.

As Jess from Seedclub said. The scarce resource in web3 is talent. Ownership is a competitive advantage.

Membership mode (PULL mode)

In the Pull model, instead of giving out rewards to incentivize people to stay, you incentivize community members to become contributors and put in some work to make the DAO grow.

This is the model chosen by the Friends With Benefits community. They set up a membership system to access their community. Membership is focused on ensuring the longevity and health of the community, making FWB a place that members call home. Each season, they raise the minimum number of tokens to enter the community, actively push members to participate in their chosen team, become a contributor, and receive tokens for their work.

Of course there are other models and initiatives that need to be explored. For example, I haven’t seen any DAOs that offer some kind of reward for long-term members. A portion of the treasury should be allocated to members who are not part of the core team, but contribute long-term. There is also a good way to keep contributors by paying them above the market price. This is what the Cabin DAO is doing, because their work is high risk, so they try to pay above the standard market rate as much as possible. If your token is volatile, its salary should be much higher than the FAANG base salary.

in conclusion

In a recent article by Packy McCormick, he explained that “people compatibility” is one of the four components of Scenius. As he puts it, “If clusters of geniuses of the past were local commerce and trade centers, then the Internet is the world’s trade center. Bringing people from all over the globe together in a larger arena will have an impact beyond imagination.”

Furthermore, we cannot underestimate the impact of bringing people from all over the world together to work together in a whole new way, powered by a new set of tools and social tokens. DAOs have the potential to change the world by collaborating and accelerating innovation. However, this bright future will only be possible if these DAOs can retain their high-quality talent over the long term.

In order to retain these high-quality talents, it is recommended to apply the management and structure we explore in this article and continue to explore and practice this new way of cooperation.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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