“Everything is Meme”, this sentence was especially popular during the period when MemeC.oin broke out. As a self-esteem “SmartMoney” in the past, I didn’t understand this sentence very much. The characteristics of researching made me pay too much attention to details and solutions when choosing a project. This has led to the development of the bad ailments that it’s not okay to look at this, and it’s not okay to look at that. But it didn’t change my mind until the appearance of People. I suddenly wanted to do something like this. I started to understand and study DAO from 0, eliminate previous prejudice against DAO, analyze the problems of DAO from the perspective of the builder and Give a solution.
Why do we need DAO?
DAO is a very broad term. Different articles I have read have different interpretations of DAO. This is essentially a definition of DAO in different categories. In fact, DAO is a new form of organization or production relationship.
On the basis of decentralization, different teams and individuals establish a collaborative organization.
In summary, DAO has:
Autonomy: Any determined rules are automatically executed based on a decentralized system, and are not transferred by personal will. This is very suitable in some scenarios that require high credibility. For example, project parameter referendums involving major user interests, changes to the rules of project token circulation and unlocking, etc., all need to be jointly decided by the DAO in the form of DAO voting and be automatically executed in accordance with the established results.
Decentralization : The development, evolution, and decision-making of any DAO are based on a decentralized ecology, not restricted by supervision, and not centered on certain core interest groups. DAO should conform to the basic principles of openness, transparency, fairness and fairness from the beginning of its establishment. . This is very attractive to some people with common interests and common values. Taking ConstitutionDAO as an example, in accordance with the established donation rules, ConstitutionDAO has completed a decentralized project that is not limited by region, regardless of identity, and no core interest groups. Iconic event. The basis of all this is due to the trust foundation given to users by DAO and the common values of ConstitutionDAO users.
If you are a web3 builder who pursues freedom, obeys the rules, understands and supports the basic principles of distribution according to work, then DAO is really suitable for you.
The problem with DAO
However, after reading many DAO articles and even participating in some DAO organizations, we often find some key issues:
- DAO is very inefficient in terms of organizational efficiency, and the high cost of communication and collaboration makes it difficult for DAO to complete some complex collaborations.
- The organizational form of the DAO has no legal basis, and the rights and obligations of the DAO have not been fully supervised.
When facing the above problems, we need to make some basic divisions on the types of DAOs. The reason is that different types of DAOs have different requirements for collaboration. The premise of raising questions is to clarify the scope of the problem.
So from the perspective of collaboration complexity, I will divide DAO into the following categories:
Under normal circumstances, the scenario of primary collaboration requirements is sufficient, and ConstitutionDAO is a good example.
Intermediate collaboration requirements play a very good role in some mature DeFi projects, such as curveDAO. Even due to the maturity of curveDAO, new types of attacks against DAO have also appeared. Although the attack behavior is wrong, this also proves the DAO community governance model. It has been respected and recognized by more and more users.
However, in more complex scenarios, the governance efficiency of the existing DAO will seriously affect the progress of the incident. This has also led to the fact that the degree of decentralization of a large number of decentralized products is not high. In essence, a large number of projects are still operated and decided by a specific company. Even sushi created a community project with no VC and no pre-mining mechanism, and there have been many negative incidents of centralization so far. The soul man resigned, and the head of the Asia-Pacific market publicly questioned Sushi’s centralization of power.
With so many problems, does it mean that DAO can only complete partial transformations when facing complex scenes? For example, the governance of communities with primary and middle-level needs, and corporate governance with high-level needs?
I think it is not. The problem is not that DAO is not feasible, but:
1) DAO’s infrastructure is too weak
I tried a number of DAO tools, including DAO creation tools such as Aragon, DAOstack, Colony, Haus, and some DAO Tools such as GNOSIS, Snapshot, and Superfluid.
It is found that most of them are only for some simpler needs, such as voting for donations, fund management, etc. Unable to handle advanced collaboration needs.
2) The community does not fully understand the importance of DAO.
The more emotionally charged the market is, the higher the cost of user education will be. This means that a large number of users do not have enough patience to understand the importance of DAO, which also leads to users’ lack of interest in decentralized autonomy.
The second problem is easier to solve. In two cases, users will take the initiative to accept a higher threshold:
(1) Black swan incidents occur. For example, DeFi projects are stolen frequently, and the reason for the theft of a large number of projects is often the stupid problem of private key leakage, and even phishing hackers will look at those who frequently submit code on github. Of developers, sending them phishing emails and messages. The end result is frequent leaks. This kind of problem is easy to solve, you can have administrator rights, but be sure to multi-sign management. This is also one of the responsibilities of the DAO, and a decentralized management structure will greatly enhance security.
(2) Economic benefits prompt users to complete learning. DeFi has a high threshold at the beginning. I carefully calculated it when I contributed to some early projects in 18 years. For a real little white, it is from login to investment to completion. The complete process of exiting and monetizing requires an average of 16 steps. I once doubted the feasibility of DeFi, but the wealth-making effect caused by liquid mining has led to an explosive growth of DeFi users. Imagine that with the blessing of the Web3 hotspot, DAO can rekindle everyone’s interest.
But the first problem is more difficult to solve, because when facing complex collaboration relationships, the DAO infrastructure needs to consider too many points, and few teams can completely sort out all the content that needs to be prepared during the entire collaboration process. There are too many “interfaces” involved, and more in-depth thinking is needed to make the best design.
1: Forward deduction
To deal with complex collaboration issues, we first need to determine the various variables and minimum units of collaboration, such as organizational structure issues in complex collaboration, revenue distribution issues, rights management issues, contribution determination issues, etc. Every question is a big variable, which contains various segmentation variables.
Take the organizational structure as an example. The organizational structure involves many small variables such as the level, authority, responsibility, and obligation of different functions. From the company level, if you want to take into account all aspects of complex collaboration, the difficulty is about the same as formulating a complete company charter, management system, and personnel system.
Therefore, it is difficult to directly give the complete variables and minimum units from the beginning, but from the perspective of product design, perfect requirements are not achieved overnight, and continuous improvement and evolution are required. Therefore, we can change our thinking and start from the actual situation, use reverse thinking to deduce some existing clear requirements, and minimize them as much as possible, so that the newly added requirements in the future will not be restricted by the initial design and enhance the scalability.
2: Reverse deduction
(1) Set up a sufficiently complex collaboration scenario-“Establish a community autonomous DeFi protocol starting from 0 in the form of DAO.
(2) Sort out all the functions needed to design, create, and operate a DeFi project.
In the picture above, I sorted out the complete functions required to operate a DeFi project. Among them, there are three types of decision-makers and seven types of executors. The number of people in each function changes according to demand.
(3) Subdivide the main work of each function again
(4) Pricing for various functions and jobs
The number marked at the end of each job is the determined price (thinking about it, everyone has different pricing principles, take a look)
So far, the content written above is enough to drive a centralized company to develop a new project. Because the centralized company has internal autonomy, does not require transparency in management, does not involve Token, and does not need to be complicated for the community, there is no need for DAO.
But decentralized organizations need to consider more. The first additional consideration is the level of decision-making and structural issues.
(5) Set the decision-making level and structure of DAO
An emerging DeFi project faces greater market competition, so different development stages should have different decision-making structures. The earlier the development, the more concentrated power should be, so that the pace of iteration and competition can be accelerated. However, the later the development, the greater the scale of funds managed or the Token-related benefits. The power should be more decentralized and democratic.
Specifically, we can set it like this:
Set the decision-making level to three: decision-making level, executive level, and ordinary users
According to different triggering rules, the decision scale is divided into 4 levels
Clarify the obligations and decision-making categories corresponding to different decision-making levels.
(6) Determine the incentive mechanism
The functional requirements and decision-making mechanism are clarified. Next, we need to think about how to motivate:
In general, when the contributions of various functions are determined, incentives can be divided into basic compensation and performance compensation. In DAO, contributions can also be divided into two types: platform token and stable currency assets. But the crux of the problem lies in the fact that the determination of the results of distribution according to work simply limits the type of work and workload and cannot accurately determine the value of the output.
Therefore, in the traditional work environment, the evaluation system is also very important. Therefore, we may be able to design the entire incentive mechanism like this:
First determine the core of the incentive mechanism-Devote to Earn, and set up rules as follows:
Combine Devote and DAO’s token distribution. When the total amount is fixed, DAO’s tokens will be distributed according to the proportion of points.
The specific rules are as follows:
The above 6 steps are the more basic collaboration guidelines of DeFiDAO deduced by reverse deduction. However, because I was too sleepy to write, I did not write other governance systems and elimination mechanisms. Currently, the relatively complete xmind is posted on Here, if you want to help me, you can contact seerlabs to get the original version, and you can also get the original version. Follow me on Twitter:
The collaboration of an engineering project is just the basics and it is so complicated. It can be seen that the advanced collaboration of DAO is indeed very difficult. So far, we have not found a project that can fully meet all the above-mentioned collaboration needs through DAO. But through combing through the entire process, we can find a rule to follow, and perhaps we can propose a solution that meets the needs of advanced collaboration:
3) Customized DAO collaboration management platform
(1) Why do we need
In the daily workflow, the needs of collaboration are ever-changing, but they are not without trace. From the above analysis, we can clearly see that almost all functions can be prioritized according to the behavior of the mind map, such as the decision-making system. The contribution system, the incentive system, and the governance system and elimination mechanism that I didn’t write about. Fund management can all be called first-level needs, and the others can be called second- and third-level needs.
It may be clearer to express this xmind in another way:
From this perspective, we need such a more clear and easy-to-use tool to edit and create some organizations that are suitable for advanced collaboration needs from a more subtle level.
Although some of the products that I have tried have already evolved in this way, the level of the overall product architecture is still unclear. And lack of custom composability.
For example, the creator of such auxiliary products should not provide one set or multiple sets of templates, but should define some first-level requirements differently, and more advanced requirements only define the scope and authority of the function.
In addition, the various first-level requirements of high-level collaboration often have mutual dependence, which requires the new DAO collaboration management platform to support the coupling judgment of different requirements. For example, the incentive system needs to be linked to the contribution system, and the asset management system needs to be linked to the incentive system.
To sum up, I think the market needs a DAO collaborative management platform.
(2) This platform needs to meet the following conditions:
a. Free definition
b. Can be defined step by step according to strict priority
c. Combinable responses between high-priority requirements
d. The architecture can be upgraded
e. More people can contribute workflow design ideas and provide templates
(3) The significance of this platform
If some advanced collaboration requirements can be met from the beginning (in fact, the engineering difficulty is not high), then the scalability of this platform can become very strong, especially when all kinds of policies are not clear on the premise of DAO creation requirements More and more, more useful DAOs can achieve a variety of goals:
a. Have the potential to become a DAOstarter
b. Have the potential to become a recruitment platform for DAO
c. Have the potential to become gitcoin
d. Have the potential to become a catalyst for web3
The market needs such a more flexible platform. At least I and many friends around me need it. We have a lot of ideas every day and see some pain points in the market. However, due to some reasons, we cannot decisively join the web3.0 army, so we have to I hope to contribute to web3.0 in the form of sharing experience, participating in investment, and helping others, so DAO is very important to us.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/the-blind-touches-dao/
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