Recommended DAO Designs

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In talking to users it's become clear that while the breakthrough of AraCred is the + (Aragon + SourceCred), how to actually distribute tokens is a real concern for real users using the system IRL. As such, we should be able to offer some recommended best practices to make it easy to get started.

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Community Recognition and Rewards

If tokens are being used to recognize and reward community members, and the source of funding for those rewards comes from a single source (parent org, grants, donations, etc...) then a Reputation template with the Rewards app installed makes sense. This way you can put funds in a pool, mint tokens for contributors, and then distribute the funding pool among token holders based on their contribution tokens.

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Contributor Markets

Tokens recognize and reward contributors, but with the added feature that anyone can buy tokens to then create bounties/tips for contributors. In this model, contributors are given tokens that they can then sell against a market of buyers, and buyers can then stake/burn/tip with those tokens to engage the community of contributors that is producing value. For this a CompanyDAO with Uniswap, Aragon Fundraising, or Dandelion Orgs would be ideal because they all offer various forms of market activity.

• CompanyDAO + Uniswap is the simplest, however you need to supply liquidity on Uniswap.
• Aragon Fundraising is like the Company+Uniswap model, but the DAO can control a lot more of the process depending on how permissions are setup.
• Dandelion Orgs are good if you want to permission who can and cannot buy tokens, but you want to give contributors the option to redeem their contribution tokens against a pool of capital at any time.

[yeqbfgxjiq]

AraCred Commons DAO

Been talking to a bunch of communities about how to DAOify. There's a lot of people with shared talents that naturally coordinate to discuss and do things relevant to their interests. This is cool, but so far it's just been a hobby. It's hard to go from doing something you love part time to doing it more, without making it a job. There needs to be a way to engage with meaningful and fulfilling communities in a way that's sustainable and brings value full circle without relying on altruism.

Due to the magic of blockchains, bonding curves, and DAICOs this might be now possible. In fact, it might be easy. Communities can create a DAO with membership tokens (Moloch-style recommended), then create a derivative work token for that DAO that's priced on a bonding curve, then accept that token for goods/services provided by members. This could be consultation services, development/design work, or anything else. Clients buy the work token and DAO members then accept the work token as payment. This way a group that has a unique and valuable skillset can offer that to the world, and people interested in receiving that value have an easy way to engage that entire community.

To support the DAO itself a percentage of all client revenue (say 10%) could be funneled back into the DAO's common pool. This way the DAO supports it's own operations, members get a steady stream of work, and if the work is good the demand (and thus price) will go up as well. It's also simple enough that it can be implemented without any fancy new mechanisms - just a bonding curve and a Moloch type DAO.

To take this to the next level you could incorporate SourceCred into internal chats and development work. As people contribute to internal operations they would earn Cred which could be held to increase membership reputation or cashed out to receive a proportional share of the DAO "commons pool." Only members can contribute to internal ops to earn Cred, but members have to give 10% of their loot/work tokens to the DAO's common pool to maintain their membership staus - so there's incentives to both do client work and internal work in a way that's (maybe/probably/hopefully) sustainable.

[yeqbfgxjiq]

A Few Practical Notes

Company DAO + Uniswap

This is the simplest model. Deploy Company DAO, mint tokens, deploy Uniswap pool, provide liquidity for that pool, then let people trade their tokens. People who buy tokens can then burn them to receive a service (as in the Aragon Fundraising model). As community contributors do work they get minted tokens that they can redeem against the Uniswap pool.

Note: for this to work the tokens in the DAO need to be transferable, otherwise you can't send them to Uniswap.

Dandelion Orgs (Moloch on Aragon) + StakeOnMe

Dandelion Orgs offer the simplest UI/UX from both a conceptual and technical standpoint. Users buy a token from StakeOnMe and send it to the DAO. The token is then in the DAO's vault. As people contribute to an initiative they earn tokens which can then be cashed out against the pool of meTokens in the vault. They can then redeem those tokens against the StakeOnMe collateral pool.

Note: this can work with non-transferable reputation tokens since you're redeeming those directly against the pool of assets in the DAO vs transferring them to a secondary market to trade. This will also work with transferable tokens as well, but that creates an arbitrage opportunity between the value of redemption in the DAO vs on secondary markets (such as automated market makers (AMMs) like Uniswap or StakeOnMe) - which could add unexpected user behavior and/or cognitive dissonance for contributors.

Aragon Fundraising

If you're going to use Aragon Fundraising tokens are constantly going to be minted based on contributor activity and this could easily flood the market. To off-set this when people "redeem" their tokens they would actually need to burn them. This would then leave collateral in the curve for contributors. This kind of creates a "permissioned request for services" where anyone could purchase tokens against the curve, but they would then have to submit a vote to burn their token. Only if the token is burned is the request accepted. Furthermore, the client coul specify the service they are burning the token to receive in the vote description.

Note: the gas fees for buying or selling tokens are often between 1 and 2 dollars and require multiple tx. It's a great system for a legit fund raise, but for casual users it's likely to be frustrating.

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Community Services & Sustainability

Exploring how to help communities DAOify to create and capture more value sustainably.

Motivation

There are many communities with many people full of lots of knowledge. Often these communities will engage on topics they are passionate about and create a lot of value in the process. The problem is, most communities don't capture any of this value beyond secondary sources or feelings of good will.

Opportunities

Consultation

LexDAO has recently launched the LexDAO Research LDR) token. Anyone can buy the token on Uniswap to receive a legal opinion on a topic. This is fantastic. This could also apply to anyone else who wants to engage a community of experts to get an opinion on any other topic. Even better, it can be setup via an Aragon DAO, a Uniswap exchange, and a simple landing page.

Research

Speaking of experts, when dealing with important things you often want to get multiple perspectives. This applies to finance, medicine, law, and really anything that's both complicated and important. Going out and engaging multiple parties on an individual basis is not only time consuming, but expensive. Furthermore, many experts don't have time to both do in depth work and build their own personal brand/business. Being able to go to a community of experts and engage with them as a collective would save time and money for all parties involved. This could be accomplished via a token model as above, but rather than receiving a written opinion you get time to engage in the community chat. Community members who engage with clientele in this chat could be rewarded based on their engagement, which can be tracked via the same page rank mechanism that AraCred uses, but the sponsor is the client (see explanation below).

Community Sponsorships

Often, communities will provide a lot of value for a project or field, but not in a way that's easy to recognize or reward. We all know they're important, but beyond that things get fuzzy. Using a mechanism like AraCred those who benefit from (and want to sustain) digital communities can sponsor the community as a whole. The way it works is that we run a modified page rank algorithm on a community forum or chat. Then we mint tokens based on people's engagement and contributions. If sponsors put funding in the community pool then token holders can redeem their rewards for an equivalent portion of the funding in the pool. This allows for top-down funding, but bottom-up fund distribution.

Moving Forward

Until recently, many of these opportunities were simply unavailable. Now, due to the advent of blockchain technology and DAOs, we can empower communities in ways that were impossible before. This provides opportunities for people to come together, sustainably create value, and solve problems for each other with minimal friction. If this sounds awesome and you'd like to empower your community with these tools, please reach out! Happy to help you take your community to the next level.

[YalorMewn]

Just wow 😱

[pythonpete32]

This is Awesome!

[yeqbfgxjiq]

After many worksessions with @mzargham and much thought... I don't think it makes sense for most projects to use a bonding curve for AraCred tokens that are correlated to contributions and value creation. It does, however, make sense to use a bonding curve for a work token that grants holders the ability to access products/services offered by the project/community.

It makes more sense to use AraCred ONLY to recognize contributions of value to a community/project. Then contributors get governance rights and/or claims on the economic assets of the project's DAO. This way the project is primarily run by and for the community.

If a project wants to monetize they could introduce valuable paid services, support, in-game features, etc.... These could be provided via a variety of mechanisms, but not the AraCred token that represents contributions. The outside economy could then engage with the DAO to access the value provided by the community/project by purchasing a work token that's priced on a bonding curve, paying the DAO directly for services, or sending tokens into the DAO's vault in exchange for off-chain points in some other ledger that could be used in that community/project economy.

This keeps things relatively simple. Contributors contribute, then get a token that can be redeemed against the pool of assets stored in the DAO. Customers pay to access good/services/stuff from the community/project.

If the contributor token is tradeable it represents governance and economic interests in a project (so the price should be higher than just the redemption price). If the contributor token is not tradeable, however, then only contributors will have claims on the project's assets. This later model feels more in line with the original intent of SourceCred: sustainable open source projects that thrive.

For all this to work, however, AraCred DAO token minting can only come from contributions. Also, the only way to get in-game community points/services/stuff needs to be to via the external client facing mechanisms. This way you can't buy claims on the project's assets or governance, but if contributors want to access in-game features they have to do so in a way that directly simulates the AraCred contributor economy.

It should be noted that this is for a system that uses SourceCred as is, today, without boosting. When boosting is introduced it will change the game considerably and at that point a single token connected to a bonding curve might make sense. Without boosting, however, I think that a Dandelion/Moloch DAO for contributors and a separate "work token" that feeds cash into the project's DAO would make more sense.