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We’re trying out a new format in this issue. From the beginning we have strived to be the comprehensive source of OrgTech and DAO news, but this means we’re only channeling more and more noise as the OrgTech industry grows more vibrant. It’s a wonderful problem to have. This new format aims to strike a balance, providing more curation for our busy readers while still maintaining a comprehensive overview for those who want to dive deeper. Let us know what you think!
📺 Previously on DAObase
- DAObase #17 – Most Clicked: Cells as Firms, Holographic Consensus in Aragon (Part 1), Why Do Public Blockchains Need Formal and Effective Internal Governance Mechanisms?.
- OrgTech-Fr Review #2, #3, #4
- Le Chemin d'Aragon (Part 1, 2, 3)
Why have Aragon decided to build their own blockchain?
- Platform Risk: Ethereum network activity determines the cost of using Aragon, making it hard to provide predictable prices to Aragon users, and Ethereum updates can break Aragon smart contracts (e.g. the upcoming Istanbul hard fork). Aragon Chain will make the platform more predictable and reliable for users.
- Scalability: With Ethereum scalability measures still in development, Aragon are concerned that they'll be held back from onboarding more users when they find traction. At launch, Aragon Chain is estimated to have 2-10x more throughput.
- Sustainability: Owning the full stack will give Aragon the flexibility to capture value wherever it accrues, making Aragon's economy more sustainable.
What will Aragon Chain look like?
- Aragon Chain will be a Tendermint proof-of-stake blockchain, using the Cosmos SDK with an EVM module that will facilitate the migration from Ethereum.
- Along with proof-of-stake consensus, there will be a new staking token called ARA, which will be minted/burned by depositing/withdrawing ANT from an Aragon Fundraising bonding curve. This is similar to Aragon Court's ANJ token economics, which you can read more about here.
- There will be a bridge between Aragon Chain and Ethereum, which will enable tokens to be transferred between chains and allow decisions originating in Aragon Chain to be executed in Ethereum by an Agent.
- Now that the proposal has been approved in Aragon Network Vote #4, ChainSafe will begin work on Aragon Chain and the Ethereum bridge.
- Aragon expect to continue supporting Ethereum and upgrade when Ethereum 2.0 comes around.
Further reading: ChainSafe Aragon Feasibility Report here, Aragon Chain AMA with Aragon One, ChainSafe, and Cosmos here, ANT Demand Modeling Framework here, ANT and Aragon Court here, ANT and Aragon Fundraising here, Aragon Court v1 Technical Spec here.
Underscore Protocol + DAOstack Wiki
Underscore Protocol is a content versioning system inspired by git, the leading software versioning system. Documents are stored in IPFS on Ethereum, which means they can only be modified by the document owner's Ethereum address. Edits are made by branching the document into new perspectives, of the full document or optionally just a portion, and then merging with the main perspective according to whatever governance structure is in place. Portions of other documents can also be embedded within your document, then automatically updated corresponding with any changes made in the source document, or you can modify from within your document and merge with the source document according to the governance structures of the source document.
As a proof of concept, Underscore Protocol are developing a wiki tool for DAOstack's Genesis DAO, which assigns the DAO as the document owner of the main perspective, such that any proposed edits to the wiki must be approved by the DAO. As well as wikis, these mechanisms could be used to govern a DAO's constitutions/policies and enable DAO members to collaboratively edit proposal documents.
Similar work was done at ETHBoston by a DAOstack core team member, this time focusing on enabling a DAO to manage the state of the code for its own UI. Use cases identified include constitutional documents, product designs, multi-author articles, videos, and digital art.
OpenLaw's "The LAO"
OpenLaw have rebranded the concept of an LLC-DAO (a DAO legally wrapped in an LLC legal structure) as a "LAO" and are forming an eponymous for-profit venture capital DAO called "The LAO", much like the branding strategy of the original 2016 The DAO.
The LAO will be linked to an LLC incorporated in Delaware, require that all funded projects also register in Delaware and tokenize their stock, and require that all DAO members (currently limited to 100) be accredited investors as verified by KYC. It will make use of OpenLaw's tools for linking legal documents to smart contracts, in this case modified MolochDAO smart contracts which will include the "rage quit" mechanism.
During the funding application process, the LAO smart contract will hold the tokenized stock that represents its ownership interest and automatically release funding to the applicant's address (or return the tokenized stock) subject to the results of member voting.
🧠 Brain Food
Editorial reputation is established over time on the basis of contribution histories. Edit counts are the basic quantitative measure of contributions; talk pages expand on this with qualitative data about actions and interactions with other Wikipedia stakeholders. Eventually, Editors with strong reputations should be able to successfully volunteer as Administrators. Such a reputation system allows users to remain pseudonymous, incentivises users to concentrate their time on accumulating reputation under only one identity (minimizing Sybil attacks), and slows down the evolution of power distributions (minimizing hostile takeovers).
Editorial disputes are resolved using a standard escalation process. If Editors are unable to reach peer consensus after discussions on the articles' talk page, they can seek facilitation from an Administrator, among other measures. If the dispute remains unresolved after all other measures have been exhausted, the matter is escalated to the Arbitration Committee, who have the power to remove Administrator privileges. Editors are incentivised to manage disputes cooperatively because their actions are recorded on the talk page and thus tied to their reputation.
Rather than seeking finality, as many blockchain designers do, Wikipedia's mechanisms are designed to iterate slowly and continuously. Even Wikipedia's governance policies are open to constant iteration, needing only an uncontested edit to policy pages to be changed. This flexibility is also deployed in Wikipedia's approach to security; the whole community is responsible for coordinating to amend malicious actions, rather than proactively restricting actions, meaning over time the community can keep itself clean of bad actors.
Brands are consensus systems through which reputation and narratives emerge from consumers sharing their impressions. Centralized media enabled corporations to control one-to-many transmission of narratives, which was then undermined by the rise of decentralized media and many-to-many transmission of narratives (e.g. hashtags and memes).
Now, decentralized organizations are taking brand decentralization to the next level, by giving community members ownership and therefore a financial incentive to spread their own brand narratives. Headless brands are the extreme of this, where brand identities are decoupled from founder identities through pseudonymity or gradual ceding of control. This eliminates the founder's personal brand as a single point of failure, lends itself more powerfully to community mobilization and meme-driven virality, and enables the testing of parallel narratives in the search for product-market fit.
However, the lack of a central brand authority threatens the cohesion of the brand, which at its extreme leads to narrative forks (e.g. Bitcoin vs Bitcoin Cash).
To maintain brand cohesion, founders may try making brand ownership centralized (e.g. Ethereum Foundation‘s ownership of the Ethereum trademark), imbuing their philosophy into an organizational constitution (e.g. Bitcoin's whitepaper), hard coding their ethos into protocol design choices that serve as community guidelines (e.g. Bitcoin’s 21M fixed supply), or designing governance models that allow brand tensions to be resolved without forks (e.g. Decred, Tezos, et al's on-chain governance).
🗞 In Other News
- Aragon: Aragon Network Vote #4 began Oct 31, after being pushed back by a week; final results here (notably AraCon 2020 and the Kleros common court were rejected, while Aragon Chain passed). Aragon Network launch phases and target dates. The new Aragon design system. A new Aragon commercial. Autark's Open Enterprise suite live on Rinkeby testnet (previews here); their bug bounty will lay the foundation for a future Autark DAO. EmpowerTheDAO successfully completed their integration of Aragon with Compound, Uniswap, and ENS. Implementing DAOstack’s Holographic Consensus in an Aragon app (Part 1, 2, 3, 4). WIP of bringing Commons Stack's conviction voting mechanism to Aragon. Using SourceCred to attribute Aragon DAO tokens based on GitHub activity.
- Colony: Step-by-step details on getting started with colonyJS.
- DAOmetrics: v1 now live. Joins an emerging list of DAO dashboards such as DAOhaus, My DAO Dashboard, Apiary, and DAO Browser.
- DAOstack: The Genesis DAO 1.0 Update, due to soft-launch in late November, will include a reputation reset, a new token locking mechanism, and more than double the monthly funding; more on the new reputation distribution here. New landing page for teams seeking guidance on how to collaborate with the DAOstack ecosystem.
- ditCraft: Updates include ditExplorer v0.2, with notifications and GitHub logins, ditCLI v0.3, with support for more git commands, and the ditIndexer, which caches all data in a MongoDB improving performance by 10x.
- dOrg: dOrg is maturing as the first independent community dev team for DAOstack, as their source of funding officially shifts from the DAOstack core team to the Genesis DAO. They're also funded by the Gnosis Ecosystem Fund; interview here.
- Gitcoin: Gitcoin Quests – educational games with non-fungible token (NFT) prizes.
- Moloch: the-dogs-molochs – a simple Moloch dashboard. A primer on the Moloch design and various DAOs using it. A look back on the progress of the Moloch DAO primitive. Graph Commons on accountability in decentralized networks, visualizing Moloch DAO voting activity.
- OpenLaw: PoC with Thomson Reuters to turn contracts processed by their Contract Express software into smart contracts on the Ethereum blockchain.
- Wetonomy: The Tendermint-based DAO platform successfully completed their first transaction and demoed their beta mobile app at the aeternity Universe One conference.
- Betoken: A look at how Betoken, a new hedge fund DAO, uses The Graph to pull data from the Ethereum blockchain.
- Cosmos: Should Cosmos' governance be decoupled from validator security?
- Edgeware: Edgeware will relaunch with a clean slate after issues were identified with the calculation of token distributions. Next steps for the relaunch outlined here. Straightedge, a fork of Edgeware, will have to relaunch too.
- MakerDAO: Coinbase Custody now supports Maker Governance. Stability fee was lowered by 4% to a total of 5.5%, with a last minute vote from someone holding 94% of power in that particular vote.
- MetaCartel DAO: Exploring legal structures that will enable them to start making investments. Created a DAO for funding and commissioning NFT-based art.
- Nexus Mutual: 1confirmation joined the mutual, Nick Tomaino joined the board, and Richard Chen released a stat tracker.
- Orochi DAO: Decrypt profiled how Orochi powered events at Devcon 5.
- Trojan DAO: Trojan DAO opened for participation, held an art exhibition at Devcon 5, and won the Token Engineering track at Outlier Ventures' Diffusion hackathon (details of their hackathon work here).
- Union: A decentralized credit union using a bonding curve and a DAO which creates and manages credit vehicles.
🧠 Brain Food
- 🎨 Design: Semaphore, an anonymous signalling mechanism for Private DAOs. Balancer Pools, bonding curves which can hold multiple tokens and automatically rebalance the portfolio according to predefined ratios. Working draft of a DAO Charter which defers to a designated smart contract, for DAOs wishing to function as unincorporated associations. Public Interest Projects (PIPs), a low-risk seed funding mechanism which uses the interest from funds locked by patrons in Compound. A reputation system which calculates global trust values based on peer-to-peer claims. Sentiment Tokens, an opt-in-free reputation system.
- 🔬 Research: Introducing the new MIT Computational Law Report. Quadratic voting with sortition (random sample polling). Vitalik Buterin reviews Gitcoin's 3rd quadratic funding round. The decentralized governance associated with platform tokenization can eliminate user holdup. DAOs can supplement corporate governance and unlock new decentralized regulatory solutions. Blockchain should be promoted in innovation policy because it lowers the cost of contracting and thus the cost of institutional innovation. Information gerrymandering in social networks skews collective decision-making. OpenAI observes emergent tool use by co-adapting agents in simulated games of hide and seek.
- 💭 Thoughts: We should understand the nature of autonomy before deciding the legal status of autonomous software. Protocols aren't businesses, which are incentivised to be maximally extractive, they're Minimally Extractive Coordinators. Tools, processes, and resources for token engineering. The structure and benefits of incorporating on-chain (most immediate benefit is efficient international accounting; tokenized governance currently adds too much friction). Evaluating how DAOs could disrupt venture capital. OpenLaw considers the nature of smart contracts and proposes a redefinition. Aragon Black interviews anarchist anthropologist James C. Scott and explores blockchain & collaboration, featuring an interview with Autark about Open Enterprise. Bounties Network explores The Evolution of Communities and Creating Culture Within Communities. Autark interviews Nathan Schneider, platform cooperative journalist and researcher, and a member of non-profit worker cooperative Common Knowledge.
- 🐦 Tweets: Karen Kommerce on why DAOs need a legal framework. Jesse Walden on how legal wrappers are to DAOs what mailing DVDs were to Netflix. Andreas Antonopoulos on the impossibility of reconciling global blockchains with local jurisdictions. Gabriel Shapiro on learning from corporate governance and targeting the sovereignty use case. Abbey Titcomb on learning from FOSS. Tendermint's Head of Community on building decentralized communities.
- 🎙 Podcasts: DAOcast with Pat Rawson (DAOstack), Luis Cuende (Aragon), Max Semenchuk (DGOV, Commons Stack), and Eric Arsenault (The DAOfund). Unchained with Mariano Conti (Moloch DAO, MakerDAO) and Peter Pan (Moloch DAO, MetaCartel DAO). Chorus One with Dillon Chen (Edgeware).
- 🎤 Conferences: Complete DAOfest playlist. Santiago Siri (Democracy Earth) on formalizing human identity in decentralized networks @ Devcon 5. Philip Daian on bribery resistance and protection against Dark DAOs @ Devcon 5. The Governance Games. Tales of Governance @ DappCon. Kevin Werbach on CryptoGov @ Cryptoeconomic Systems Summit.
- 📈 Recognition: Germany releases National Blockchain Strategy, saying it will commission a report on "blockchain technology in company law and law on cooperatives" and "concern itself with the legal framework conditions" of DAOs. Aimee Groth, Quartz at Work journalist, introduces DAOs in relation to previous organization design movements.