Abstract
DAOs have evolved since their original inception. Most of the applications and uses of digital assets are improved and expanded with well-functioning and well-governed DAOs. The continuing evolution of DAOs is undermined by existing legal frameworks and their attempts to centralize DAOs. The article examines the core features of the Developers DAO, its strategy to expand the DAO ecosystem, and the DevDAO design’s uses in business and society.
Key Words: Developers DAO, Decentralized Autonomous Organization, Governance, Digital Assets, Decentralized Finance, Blockchain, Startup, Decentralized Commerce, Emerging Technology, Token Models, Incentive Design, Tokens, Distributed Ledger Technology, Decentralized Infrastructure
JEL Categories: K20, K23, K32, L43, L5, O31, O32
Note: The reputation-based governance design mentioned herein is based on prior work by Craig Calcaterra & Wulf Kaal.
Introduction
The evolving decentralization of business and society is an extension of the existing societal organization and human achievement. As organizational centralization reaches natural limitations, decentralized organizational elements become more prevalent. For example, internet-based platform businesses try to make organizational hierarchies flatter to increase creativity and output and instill a culture of “best idea wins.” Similarly, as business reaches natural frontiers, it extends its reach via decentralized structures. Companies like eBay and Amazon provide examples of centralized companies that decentralized the customer experience. These companies use the structure, control, and associated profit optimization of centralized entities and combine it with the bottom-up approach of early attempts at decentralization in the form of customer reviews.
Decentralized autonomous organizations (DAOs) are a natural global extension of platform businesses and decentralized societal organization. DAOs are truly global borderless entities that coordinate agency relationships and limit liabilities via smart contracts. The business applications of DAOs are near limitless. For example, most of the applications and uses of digital currencies are improved and expanded with well-functioning and well-governed DAOs. DAOs help upgrade digital assets across the spectrum of applications and uses. This includes digital assets that can be used as mediums of exchange, speculation, payment rail for non-expensive cross-borders money transfer, and non-monetary uses such as time stamping. Additional use cases of DAOs include financial transactions, secure voting, autonomous organizations, company management, freedom of speech networks, online games, crowdfunding, and speculation, among many other possible applications that cannot be foreseen at the time of publication of this article.
DAOs can use elements of profit generation and redistribution in a way that in effect combines capitalistic and socialistic ideas. DAOs allow for the organization of society in economic structures that generate profit while at the same time redistributing resources. DAOs combine elements of socialistic cooperatives with the meritocracy and incentivization of capitalism. For example, DAOs may provide individual members the ability to sell their personal (e.g. social media etc. consumption) data, preferences, opinions etc. in decentralized systems, including in real-time. Such assets, e.g. one’s data, preferences, opinions etc. can only limitedly be commercialized in existing centralized structures. In decentralized structures, such assets can be tokenized, valued, and mobilized. Similarly, tokenized hard assets, such as real estate, can be tokenized and sold in unprecedented fractional forms. The ability to control one’s data and fractionalized (hard) assets enable new forms of consumption for consumers. In early 2020, several startups were developing a barter system in which services, such as free car rides etc., become available in return for disclosure of consumers’ data and personal preferences etc.
A core problem in the evolution of DAOs is the applicable legal framework. The concept of a DAO fails if it becomes centralized. Tying the legal existence of a DAO to any forms of existing legal and jurisdictional frameworks inevitably results in the need for a representative in the chosen legal framework and jurisdiction, which in turn centralizes the DAO and results in the failure of the DAO concept. From the perspective of regulatory competition, one jurisdiction may one day offer a DAO legal framework that removes the need for a representative in that jurisdiction. However, even if this should exist one day, a significant risk may still exist that such DAO entity would be labeled a partnership with joint and several liability for its members in the given jurisdiction. Only a jurisdiction that gives the DAO limited liability as an entity and accepts its independent status without the need for representation may truly be favorable for DAO concepts. Without the combination of limited liability and no representation, the DAO concept fails. Such jurisdiction would have to accept that the DAO is a virtual organization based on code that is accessible from any computer with an internet connection and cannot be jurisdictionally captured. The implication is that such DAO on each computer in any country is effective if another computer in a given country connects with and interacts with the code.
DAO structures are evolving lockstep with applicable legal solutions. On the operational side, overcoming bugs that lead to security flaws is a crucial part of the DAO technology evolution. On the legal side, experimentation with different legal arrangements in disparate jurisdictions helps DAO communities innovate for the creation of consumer-facing applications in different settings around the globe.
This article examines the DevDAO’s operational, governance, and legal designs and their promise for the overall DAO ecosystem.
Foundational Beliefs
The DevDAO community recognizes that the community values and core beliefs provide cohesion and longevity in the DevDAO and in decentralized systems at large. For example, contributors to Wikipedia share a common belief in the power of the crowd, that is, that decentralized collaboration for the pursuit of knowledge creates superior outputs. They collaborate because their values and core beliefs in knowledge creation unite them in a common cause.
Unifying Values
The desire to be connected via a DAO to like-minded individuals has two core value propositions. First, individuals elect to join a DAO and thus signal their desire to cooperate in a decentralized network. Second, individuals select their particular DAO based on their values and interests. DAO members will choose to join a DAO if it corresponds with their existing inclinations, values, knowledge base, and belief system. If the DAO also elicits and uses individuals’ particular skillsets that reinforce their belief system, such as coding for people who believe in the freedom of decentralized systems, the DAO can be a very strong force for value reinforcements.
DAOs need values shared by the DAO members to unify them and to guarantee stability of cooperation while maintaining a decentralized structure. The values that unite DAO members are not only a determining factor for membership and cohesion, they also ensure the longevity of the DAO and its continual evolution. Groups that are not united by values disintegrate and perish. DAOs derive unity from common goals and aspirations beyond protocols. For example, in the early 2020s, most DAO initiatives and their respective members were driven by a desire to create an alternative open society that is less controlled by existing power structures. The underlying value and desire for freedom and change unites the DAO communities as they evolve.
Unifying values increase efficiency in the DAO. The power of the DAO is instantiated and perpetuated through the individualized power centers in DAOs that morph into decentralized organizations when the powers become correlated, aligned by a common principle, a transcendental goal. Individual DAO members may begin to partially imitate each other as they seek to progress toward the common goal. Individually and technologically the individuals and nodes of the chaotic network respond to this transcendental calling as they unite in purpose. This newfound harmony makes the group more efficient than before as they find varying ways to cooperate in more complex behaviors.
The longevity of DAOs depends on their ability to maintain the fluidity and decentralized order that was possible in the initial stages of the DAO. Without continual efforts to maintain decentralized order, values that initially unite DAO members have a tendency to result in ever tighter and complex hierarchical structures in the DAO. For example, for DAOs that do not emphasize and continually work towards anonymity of their members, decentralized order is at risk of breaking down if and when “thought leaders” emerge who are identifiable and may engage in value signalling. In the final stage, the harmony and cooperation of the decentralized organization filters the group into an ever tighter and complex hierarchical structure, raising some individuals into positions of power over others. Eventually, a tree structure emerges, a fully centralized organization. This filtering process towards centralization is often the result of competition, calculated allocation of power, or otherwise matching the position to the appropriate individual’s talents within the DAO. If the hierarchy is successfully completed, all individuals find their positions of power statically fixed and the levers of power clear. This end-stage is a completely centralized organization, with the top of the hierarchy being the center of power.
Governance
Decentralized DAO governance is a core necessity for the evolution of the decentralized infrastructure. Most cryptocurrencies would not exist if Bitcoin and Ethereum had effective incentives for future protocol development and governance built into the core protocol. Common core denominators of existing problems in DAO governance design include the corruptive effects of existing governance designs with fungible assets as well as the identity of actors in governance designs. These factors, among many others, contributed to the resulting inability to govern DAOs effectively.
Community audits are a central feature in DAO governance. Centralized systems rarely provide for and administer community-driven audits. Community-driven audits go against the agency and monitoring principles embedded in the centralized governance. External monitoring and validation are key in centralized governance systems because the incentive design in centralized structures does not enable incorruptible internal controls. By contrast, community audits are at the core of DAO governance. The decentralized nature of DAOs enhances efficiency of coordination because the users of the system, e.g. DAO members, typically know best how to assess other users / DAO members. The decentralized DAO structure enables unprecedented information symmetry in the governance design because governance information, e.g. DAO group decision-making metrics and DAO governance protocol needs, is at the edge of the decentralized system and is exchanged and evaluated directly between DAO members in a continuous and iterative stream of information that provides dynamic feedback effects.
Dynamic elements in DAO governance help avoid otherwise inevitable corruptive influences. In any open and democratic system, naturally opportunistic rational parties will attempt to circumvent and game the sets of applicable complex static rules to increase their share of power and profit within the system. Stable and presumptively optimal static and/or constitutional rules for DAO governance therefore typically enable gaming and arbitrage opportunities. To enable sufficient protection of DAO members while at the same time allowing for DAO enhancements, the static sets of rules of smart contracts in such a system will need to be rather complex. With static complex sets of DAO rules comes inevitable corruptive opportunistic gaming and arbitrage behavior. To avoid these negative effects of static complex DAO rules, effective DAO governance designs should be focused on dynamic elements. Dynamic elements here include DAO members’ ability to re-evaluate existing precedent in the system.
In the early 2020s, on-chain voting mechanisms were still largely in their infancy. Most on-chain voting mechanisms and governance designs mostly resembled a plutocracy. Suboptimal voting outcomes in existing decentralized protocols were associated with the then-popular one-token-one-vote voting mechanisms. A one-token-one-vote design allocates more power to token holders who have a significant share of the total supply of a given token. Majority token holders have more power than the rest of the token holders combined. These structures reintroduce many of the downsides and suboptimal incentive allocations of one-share-one vote designs in legacy systems of the early 21st century.
More mature voting alternatives are slowly emerging. Such alternative DAO voting designs can ameliorate the traditional voting power corruption of one-token-one-vote. Alternative voting methods include quadratic voting, futarchy, liquid democracy, conviction voting, and reputation-based voting as an instantiation of non-fungible voting. These emerging more mature voting ecosystems enable on-chain protocol governance with an incentive design that more optimally balances risk and rewards of voting.
On-chain governance models can further be optimized with reputation-based staking as voting mechanisms. Reputation-based voting revolves around voting by way of staking a non-fungible asset, aka staking non-fungible reputation tokens in a given DAO, towards a certain outcome. The corruptive elements of fungible assets/tokens are removed because third parties are less likely able to take over a non-fungible asset, such as reputation, that is organically grown and maintained through actual expertise in a given DAO subject matter. Even if third parties should be able to take over or purchase non-fungible reputation, they are less likely able to maintain the reputation score and the associated revenue stream of fungible assets over time.
In the 2020s, legal designs of DAOs are still largely relegated to experimentation. Such experimentation is natural and useful for DAO concepts. Trial and failure of legal DAO designs create a natural filtering mechanism for successful DAO designs. And, the experimentation with DAO legal designs, that is, legal designs that allow DAOs to interact with the real world in a legal construct, can go hand in hand with internal DAO governance designs.
Lasting legal solutions for DAOs have to increase and maintain the internal decentralization accomplished in the DAO. Any experimentation with DAO legal solutions has the ultimate objective of accomplishing the highest level of decentralization. Without decentralization, DAOs cannot persist. Therefore, first and foremost, DAO legal designs need to supplement the decentralization accomplished by the DAO. This is perhaps the most serious challenge for legal designs.
DevDAO Concept
Based on the unifying values that encapsulate the DevDAO and the associated governance philosophy, the DevDAO architecture offers several unique features for the betterment of the DAO ecosystem.
DevDAO internal governance design and its external legal design supplement each other on many levels and create synergies. For many attempts to create legal solutions, if the internal voting mechanism of a DAO is more centralized and afflicted with existing legacy voting issues, a higher degree of decentralization in the external legal design will typically be canceled out in the long run. If the degrees of internal and external governance decentralization cancel each other out, the respective DAO is less likely to succeed in its decentralization attempt, which in turn makes it more likely for the DAO to fail. By contrast, the DevDAO’s synergy between internal DAO governance and external legal DAO designs can accomplish higher levels of decentralization. Because the internal governance of the DevDAO is decentralized and effective through reputation staking, it is more likely to create internal governance solutions that translates well into real-word legal solutions.
Legal Structure
Key for the legal solution offered by the DevDAO is the hitherto unprecedented duality of internal and external governance design that helps optimize the decentralized nature of the DevDAO. The internal and external governance coordination is facilitated by the unique duality of entities and their respective governance. For the internal governance, the DevDAO uses a system of reputation token staking that facilitates unprecedented incentivization of the DevDAO community and governance improvements in orders of magnitude. For the external legal relationships and governance, the DevDAO is represented in real-world legal contexts by the Emerging Technology Association (ETA) under Swiss law.
The objective of the ETA is to establish a decentralized and democratic association with flat hierarchies. The ETA accomplishes this objective by supporting open source and transparent research and development of emerging technologies and frameworks for community building and governance by way of receiving grants from unaffiliated entities and issuing grants to a broad array of experts, developers, and scientists around the globe.
Key for the success of the unique duality of internal and external governance of the DevDAO is the broad deference the ETA gives to the voting outcomes that originate in the DevDAO. This deference is accomplished through delegation of voting power and outcomes from the DevDAO to a member of the ETA, called the Delegate Association Member (DAM). Under the ETA articles, the DAM merely executes the upvotes on a given issue coming out of the DevDAO. The majority of the voting rights can also convene an extraordinary Association Assembly at any time. To create maximum deference to the votes within the DevDAO, under the ETA articles, the ETA Board has only those competencies that actually require the action of an individual, natural person. Such duties include representation of the DevDAO and the ETA and the duty to keep records, among others. In other words, the ETA Board merely executes the decisions of the DevDAO. In the ETA assembly, the DAM always has more votes, representing the upvotes on a given decision coming out of the DevDOA, than the ETA board because only five initial board members have voting rights. Through the votes executed in the DevDAO and represented in the ETA assembly, the DevDAO determines the support of developers and scientists and the funding allocation for projects the DevDAO sponsors.
Figure 1: Legal Structure of DevDAO and Emerging Technology Association (Swiss Law)
Figure 1 illustrates that the ETA is subject to the governance and voting outcomes of all the DAOs that operate within the ETA’s legal framework. The DevDAO is the first and primary DAO in the ETA infrastructure. Like the DevDAO, all DAOs in the ETA exercise their voting power through the ETA’s DAM under the ETA Articles. The DevDAO established the minimum viable protocol requirements (“MVPR”) which apply to any and all DAOs that operate under the Association’s legal framework. The MVPR establish a system of reputation staking for the internal governance of the DevDAO. After adopting the MVPR (adopting entirely or hard forking the MVPR code), each DAO in the ETA structure votes independently through a DAM in the ETA who represents the total upvotes from each DAO in the ETA general assembly.
This combination of factors in the DevDAO enables higher levels of decentralization. Because the internal governance of the DevDAO is decentralized and effective through reputation staking, it can create internal governance solutions that translate well into real-word legal solutions that are instantiated via the ETA and vice versa. Because the internal reputation staking voting mechanism of the DevDAO is more decentralized it creates decentralization synergies with the external legal design in the ETA. Unlike other DAO legal proposals, the degrees of internal and external governance decentralization in the DevDAO and the ETA do not cancel each other out but rather synergize and enhance each other.
The existing level of decentralization in the DevDAO design in conjunction with its continuing incremental optimization of decentralization features makes it rather likely that the DevDAO has the potential to emerge as the leading decentralized DAO design for the future. While the ETA is still a form of centralization of the DevDAO, the DevDAO has the potential to remove the ETA structure incrementally. The DevDAO may, for instance, replace the DAM in the ETA, a core point of centralization, with a smart contract. The automation of the DAM is a key objective of the DevDAO to continually enhance its decentralization.
Benefits of DevDAO’s Reputation-Based Internal Governance
The use of reputation staking and voting metrics in the DevDAO’s internal governance design has key advantages over other decentralized voting mechanisms. The DevDAO’s use of reputation voting has two key advantages over other decentralized one-token-one-vote voting mechanisms: 1) it is non-fungible which avoids corruptive elements, and 2) it optimally aligns incentives for DevDAO members individually and at the same time aligns their incentives for the totality of the DevDAO as an institution. Because reputation is non-fungible, and ideally anonymous, it is much harder for DevDAO members and external participants to try to game the system to improve their own utility exclusively while hurting the common good of the DAO.
The DevDAO’ non-fungible and fungible token governance design enables the incentivization of DevDAO members with indirect economic gain. In the DevDAO’s bifurcated design with two disparate types of tokens, e.g. reputation tokens and reputation salary tokens, 1. the non-fungible reputation tokens give DevDAO members voting rights, and 2. fungible reputation salary tokens allow DevDAO members to earn a fungible salary in proportion to their non-fungible reputation tokens. DevDAO members increase their non-fungible tokens by making valuable contributions to the DAO and participating consistently in DevDAO voting pools. DevDAO members get paid with a fungible stable token denominated in US Dollars that is pegged to a pool of fungible tokens. The salary payments in fungible stable tokens are in proportion to DevDAO members’ respective non-fungible reputation token scores. The indirect economic effects remove corruptive elements and make the governance design more attack-resistant and stable in the long run.
Reputation as a valuation metric allows DevDAO members to improve their own utility while at the same time improving the DevDAO in the long term. Because reputation is used as a metric for indirect economic benefits, e.g. a salary in fungible tokens that is paid in proportion of the non-fungible reputation token score, DevDAO reputation token holders are incentivized to increase their own reputation/utility by engaging in valuable conduct for the DAO. The more the aggregated individual reputation of all DevDAO members increases the more the overall DevDAO value increases and the more the DevDAO creates value enhancing outcomes for its members.
Reputation-staking as a basis for the DevDAO governance improves incentive alignment. Reputation-staking as a basis for DevDAO governance enables the correlation between individual and institutional value enhancement. DevDAO members rationally stake their own reputation tokens based on the outcomes they believe will increase their overall reputation/utility. If they did not they would irrationally sacrifice a future income stream in fungible tokens. Through reputation-staking, the DevDAO members are incentivized to provide long-term positive contributions because the DevDAO member reputation is transparent and reviewable by the DevDAO and the public in a slow and stable review process that reaches far into the future. Valuable individual behavior/work that leads to individualized reputation staking and individual reputation enhancement also enhances the DevDAO as an institution because the individual and institutional value enhancement are correlated.
The correlation between individual DevDOA value enhancement and DevDAO institutional value enhancement can be illustrated as follows. Take, for example, a DevDAO member who stakes that a given smart contract template is optimal for XYZ outcome/application. Once the template is affirmed by the DevDAO members as optimal at that point in time, it becomes a valuable precedent for the DevDAO members and external DAOs. Hence, the staking of an individual and the ex-ante work that leads to staking increases sustainable value for all DevDAO members. The DevDAO members and other DAOs will rationally increasingly use the precedent until a better precedent emerges. That precedent thus increases the individual DAO member’s reputation and the DAO overall.
The reputation-based governance design in the DevDAO changes the dynamic of a zero-sum game to a positive-sum game. Prior DAO governance designs were mostly zero-sum games as they used mostly fungible rewards and incentive designs. Accordingly, in prior DAO designs, DAO members pursued as large of a portion of the rewards as possible for themselves. By contrast, the reputation-based DevDAO governance design creates a positive-sum game because DevDAO members have incentives to create lasting non-fungible value for the DevDAO by developing a long-term non-fungible record of productive cooperation that in effect improves the DevDAO. Moreover, individual DevDAO member reputation can change dynamically if the DevDAO member's actions depreciate in value. The DevDAO member reputation is inflationary in the DevDAO design. As such, non-use, e.g. non-staking of reputation tokens or non-voting, would lead to value depreciation, which incentivizes action and thus value enhancement. Liveness faults become less likely. Its ability to address liveness faults in its incentive design is a key distinguishing feature of the DevDAO.
The DevDAO’s decentralized on-chain precedent system enables dynamic and evolutionary reputation-based governance. Most prior attempts at DAO governance design had no dynamic and evolutionary elements. By contrast, the DevDAO’s decentralized on-chain precedent system enables feedback effects between DevDAO members, the public record of work/posts on the blockchain, and the public users. The DevDAO’s decentralized precedent system makes the continuous upgrading of real-time data possible. As a post/template on the blockchain gets increasingly referenced by the DevDAO members and other users, it increases the respective DevDAO member’s non-fungible reputation weight and associated fungible token salary. Conversely, if a DevDAO member’s post/template on the blockchain dissipates over time, a new post/template emerges naturally. If the new post/template gets more often referenced by the DevDAO members and other users, it becomes over time the new prevailing precedent. The old precedent dissipates over time with non-use. This precedent replacement mechanism in the DevDAO design is dynamic and evolutionary. It has the promise to create eternal solutions for DAO governance and dynamic evolutionary protocol upgrades.
To create the proper incentive design in its reputation staking engine, the DevDAO incorporates several game-theoretical insights:
- The DevDAO disincentivize betrayal and defection by charging an admission fee to become a DevDAO member. Given the sunk cost of joining the DevDAO, it is more expensive for prospective members to cheat because it would be expensive to rejoin even if members could be anonymous. The DevDAO also blacklists member accounts to incentivize cooperation. KYC protocols further expand those incentives to cooperate.
- To ensure continuous cooperation of DevDAO members, the promise of future profits in the DevDAO reputation token outweigh their present value. The DevDAO reputation token has a more stable and predictable value as the ETA onboards additional grants and the DevDAO network grows globally. Reputation tokens in the DevDAO system are correlated with expected future salary tokens in the ETA.
- In the DevDAO design the loss of opportunity from slashing DevDAO member reputation grows as the size of the network increases. In other words, the larger the DevDAO network the more competition for reputation tokens to receive fungible token salaries. Further, given the incomplete information due to increasing anonymity, the value of the information from reputation tokens increases. When potential business partners have less knowledge of DevDAO members’ identity, the knowledge from the number of reputation tokens a DevDAO member holds becomes more important. Moreover, the lack of personal knowledge encourages the DevDAO members to devote more effort to fairly policing reputation tokens. Meritocracy is encouraged.
The DevDAO reputation staking design also enhances policing and compliance. The value of DevDAO member reputation is directly related to how well punishment can be distributed in response to cheating. The more transparent the system, the more accurate and efficient policing can be. Members of a traditional business police cheaters by withholding their business. But to make the threat credible, members need to police the other members and punish them if they did business with cheaters. To make the threats credible in a traditional business setting one would need to monitor those who, in turn, did not monitor those who, in turn, did not monitor. This is an expensive proposition. By contrast, in the DevDAO, algorithms can be written which exclude DevDAO members who cheat from having access to their market. Punishment for cheating becomes automated and therefore credible. Free riding in policing can at least partially be eliminated by automation. Algorithms can be written proactively to only supply contracts to those who have sufficient reputation. If a DevDAO member’s reputation is slashed, such member will not be chosen by the algorithm.
The DevDAO’s reputation-based governance design enables a much more equal distribution of power. Language, religion, race, physical presence, group identifiers, culture, etc., influence centralized power distribution. Similarly, commonly used identifiers in centralized governance such as social media profiles and credit scores, among others, are essential for access to the central system and to resources. Such relatively superficial identifiers play less of a role in the DevDAO voting designs. The more equal distribution of power in the DevDAO governance design allows the inclusion of constituents who otherwise have no agency in centralized systems.
Attack Resistance
The DevDAO design addresses sockpuppet accounts and Sybil attacks. It is reasonable to assume that DevDAO members can join from any jurisdiction and cannot be tracked or punished for any bad behavior by appealing to outside authorities. In that case, the only punishment available is to take away DevDAO members’ potential future reputation token salaries in the DevDAO. DevDAO Members are all anonymous and DevDAO members might try to game the system by creating multiple accounts, e.g. sockpuppet accounts. The only way to discourage such malicious actors from joining is to charge money during the member onboarding process.
Moreover, sockpuppet attacks are also avoided via the DevDAO’s periodic reputation-weighted salary that distributes all fees the DevDAO earns through the ETA to all members. Individuals who bring successful ideas to the DevDAO or perform tasks that bring fees to the ETA will be rewarded with reputation tokens, not the salary tokens. DevDAO members who own more reputation tokens share in a larger percentage of the salary pool. This solves the sockpuppet attack because if a DevDAO member creates 10 accounts with 1 reputation token each, it is the same as 1 account with 10 reputation tokens.
The DevDAO design addresses DoS attacks. Denial of Service (DoS) attacks happen when anonymous adversaries flood a given network with automated requests for superfluous tasks. Such incoming superfluous tasks prevent the network from engaging in productive work. To restrict a significant number of bad actors from entering the DevDAO system and ensure resistance to basic DoS attacks, the DevDAO charges a nominal fee during the onboarding process. This fee merely needs to be high enough so that the effort to police the bad actors is profitable, but not so high that it prevents people of good will from joining the DevDAO. The precise number for the onboarding fee depends on the market environment. Automation should make this feasible.
Level of Decentralization
The level of decentralization in a DAO design is an indicator for longevity of the respective DAO. The level of decentralization and the associated attack resistance and incorruptibility of DAO governance designs are among the core factors that influence DAO design adoption, its precedence, and longevity. In other words, the more decentralized a given DAO design, the more likely that design will in the long run be adopted by other DAOs. However, not all future DAO designs will comply with the ideal-typical DAO parameters. Ideal typical DAO design parameters will naturally filter out at the edges. In other words, because the optimal DAO design parameters change constantly, if and when formerly ideal-typical designs fail, new and optimized designs will replace them.
The level of decentralization in the DevDAO design reached unprecedented levels through its applicable design parameters:
- merit identifiers, e.g. DevDAO members merit, knowledge, and influence is measured through their respective DevDAO non-fungible reputation token ownership;
- non-fungibility of DevDAO reputation tokens; e.g. merit of a DevDAO member is expressed by a non-fungible reputation token that cannot be bought or sold;
- full transparency, e.g. all DevDAO decisions are fully transparent and accessible by the public and the DevDAO members themselves;
- indirect economic incentives, e.g. DevDAO members are getting paid with stable fungible tokens in proportion to their non-fungible reputation tokens;
- decisions in the DevDAO are made with a voting design that revolves around staking of non-fungible reputation tokens; and
- DevDAO’s fungible salary tokens are designed as stable and $USD denominated cryptocurrencies that maintain their value at around $1US. The incoming token grants from a diverse set of grantors are part of the pool of digital assets that constitute the basket of digital assets against which the DevDAO’s stable and $USD denominated cryptocurrency is pegged.
- anonymity of DevDAO members, e.g. after an initial setup and development period with less anonymity, DevDAO merit identifiers revolve around reputation scores and members of the DevDAO community can predominantly be identified by their respective reputation score in the DevDAO structure.
