DAO Governance Framework

Overview

In order to optimize for collaboration and community participation, we will be focusing early on modular, sharable specifications. There are elements of the dynamic framework that are common to a wide variety of specific implementations. This common subset forms what we refer to as MVPR, Minimum Viable Protocol Requirements.

When we say MVPR we refer to the specification of an algorithm that implements the governance framework described in [this paper](#on-chain-governance).

Resources

We are using GitLab Issues to track the concrete steps we are taking in assembling this system. For more information see SD-1.

This wiki is to be maintained as an introduction to the project. See SD-2.

This project is a pilot implementation (SD-4) of a framework (SD-3) for dynamic self-governance of DAOs (decentralized autonomous organizations).

Applications

The initial DAOs will include applications devoted to some of the most relevant requirements for building a decentralized economy, including:

• Science Research Organizations
• [Peer to Peer Technology](Peer-to-Peer-Technology) - The decentralized society for research, development, and sharing of P2P tools.
• [Decentralized Governance](Decentralized-Governance) - The decentralized society for analysis and development of new approaches to the organization and guidance of decentralized networks.
• [Software Review DAO](Software-Review-DAO)
• [DeNiM](Decentralized-News-Media) - The decentralized news media network.
• [Chit Fund](Chit-Fund) - A decentralized and global approach to the banking functions of investment, loans, and insurance using a generalization of the traditional chit fund scheme.

Fundamental Considerations

• Individuals are creative, and have goals and needs
• Individuals can choose to coordinate their actions
  • This can be considered a social phenomenon
  • These actions and reactions aggregate into group behavior

• Group behaviors have effects
  • Individuals within the group
  • The group considered as a whole
  • Outside the group

We desire to build a system with the following properties:

• The system accrues benefit to its users, both internal and public
• The behavior of the system can be steered by the collective will of participants

We call such a system a Self-Governing DAO (Decentralized Autonomous Organization).

System Design

We conceptualize an MVPR DAO as a group of experts, who will operate a self-governing DAO in order to provide some service to the public.

In an MVPR DAO, each expert takes on responsibility in the following areas:

• Work products -- Providing a service to the public
• Reviews -- Policing the behavior of pseudonymous peers
• Governance -- Voting on DAO operating parameters, and possibly other software and content
• Community -- Engaging with the processes that informally support the group's activities.

The following are common to all these domains:

• Interactions
  • Exchanged among participants
  • Recorded for posterity

• Reputation
  • Gained through peer validation
  • Staked upon assertions

UI Software

The DAO must provide software that allows the public to access its capabilities. This software should provide representations corresponding to each of the areas of responsibility listed above. In the following subsections we will discuss each area of responsibility, and the corresponding functionality we expect.

Ideally the UI software might be formally governed by the DAO itself. However, it might be a point of diminishing returns. The alternative is to allow the DAO community to self-manage the deployment processes for the UI software. We could simply provide recommended defaults with the out-of-the-box UI software, and let each DAO decide how to take it from there.

In its purest, ideal form this system could support stateless client applications, serving all operational data reliably from blockchain storage. However, blockchain storage is expensive; so in practice, we only want to use it in cases where we really want the long-term guarantee.

This means that we must implement a separate, off-chain stateful layer. There are a variety of options for this off-chain data layer, which we will explore in due time. For now we merely specify that such a layer must exist.

There are both formal and informal processes (hard and soft protocols) associated with each of the above outlined areas of responsibility. Hard protocols are specified by code, and enacted by running systems, whether on or off chain. Soft protocols refer to patterns of participant behaviors.

Smart Contracts

• Availability SC: Enables DAO participants to declare their availability
  • To produce work
  • To review work

• Business SC: Enables public users request work products of the DAO.
  • This smart contract will accept certain parameters that will function to specify the proposed agreement.

• Review SC: Enables DAO participants to review one another's work
• Forum SC: Enables DAO participants to discuss, propose, and vote on modifications to the DAO operating parameters

Key Concepts

Reviews

A goal of the DAO is to deliver quality results to its customers. To achieve this, experts submit work products for review by other experts within the DAO. Each reviewer then submits a review, which itself is subject to review.

Governance

The MVPR parameters are designed to allow customization of the rules that govern the operations of the DAO.

Reputation

DAO participants shall be awarded with reputation tokens, for contributions which their fellow participants deem valuable. Reputation should be non-fungible among domains, meaning that one kind of reputation is distinct from another. We can begin with the consideration of the following distinct kinds of reputation:

• AREP - Work product reputation
• RREP - Review reputation
• CREP - Comment reputation
• GREP - Governance reputation

AREP is associated with work product. In a Science Publishing DAO, an example of work product would be a paper, along with associated citations, research data, scripts, and interpretations. The weighted, annotated citations give us the peer validation mechanism. A work product which receives favorable review shall attribute AREP to its authors, as well as to the authors of the works cited, in a recursive manner, up to some (configurable) depth.

RREP is associated with reviews. A reviewer receives RREP for contributing a review that

GREP is associated with proposals to modify the MVPR parameters. This is what we consider governance of the hard protocols in the system. GREP may be staked toward new proposals. Successful proposals shall attribute GREP to their authors and supporters. It is likely that there will be a close relationship between GREP and RREP,

CREP may play an important role in the soft protocols governing the organization. Fundamentally a DAO is a group of individuals. Their behavior will be shaped partly by the communication that occurs among them. Comments will be a central vehicle for this communication. Each organization may develop its own ways of associating meaning with comments. An organization may want its participants to be able to stake their own reputation toward promoting particular comments, and toward suppressing others. Our goal is to enable each community to articulate its own values, in a way that is transparent for the community as well as the public to observe.

Notes about Implementation

These reputation mechanisms will be encoded as smart contracts. Such contracts run on a block chain and thus provide a resilient, distributed ledger where we can store the records of group participant activities.

It will be necessary to build software tooling that is capable of constructing a consensus view of the state of the DAO. This will need to access block-chain data encoded by the smart contract(s) as they ran at the time each block was written. The smart contracts themselves may change over time. Our goal is to encode these changes such that it is possible to reconstruct the entire computational history of the DAO. To maximize the flexibility of our initial contract, we will implement a set of hyper-parameters. In other words, the smart contract will express a dynamic algorithm; by changing the parameters of the algorithm, the behavior of the algorithm can be modified.

Broadly speaking, upgrading the underlying smart contract itself produces a hard fork. The best case for such a scenario is that the new contract is (sufficiently) compatible with the previous, and that all participants are able to upgrade to the new version in a (sufficiently) timely fashion. A design consideration for this project will be to attempt to reduce the probable costs of such a hard fork, by introducing some kind of internal versioning scheme for the blockchain code and data. TODO: Articulate the relative weight of this forward-compatibility consideration versus the competing design goal of avoiding excess complexity.

References

1. On-Chain Governance:
   1. Calcaterra, Craig, On-Chain Governance of Decentralized Autonomous Organizations (May 24, 2018). Available at SSRN: https://ssrn.com/abstract=3188374 or http://dx.doi.org/10.2139/ssrn.3188374
2. Reputation Protocol:
   1. Calcaterra, Craig and Kaal, Wulf A. and Andrei, Vlad, Blockchain Infrastructure for Measuring Domain Specific Reputation in Autonomous Decentralized and Anonymous Systems (February 18, 2018). U of St. Thomas (Minnesota) Legal Studies Research Paper No. 18-11, Available at SSRN: https://ssrn.com/abstract=3125822 or http://dx.doi.org/10.2139/ssrn.3125822