Organization Legos: The State of DAO Tooling
By: Nichanan Kesonpat
Tags: Web3, Ethereum, Dao, Community, Crypto

Another example of functional committees (“workstreams”) in ShapeShift DAO

While many responsibilities overlap with those of traditional organisations, the core difference (and value proposition) is that opportunities to contribute are open. Anybody can take the initiative and make proposals to create new working groups or change the way things are run.

Unlike traditional orgs where individual employees and users are beholden to decisions made behind the closed doors of a boardroom, any stakeholder of a DAO can step up to be the change they want to see. A DAO opens up the floor to the wider community through proposals and request-for-comments. The purpose, resource requirements, key stakeholders, performance metrics, and actual results of an initiative are made transparent — creating accountability and a social layer of checks and balances.

Decentralisation doesn’t mean leaderless. Rather, more people are empowered to take initiatives towards shared goals: the DAO’s North Star.

Well-maintained documentation that details how the DAO is structured, and what each working group is working on, goes a long way to help potential contributors understand where their skills might align with the DAO’s needs. Of course, the motivation to contribute has to be there in the first place. This is where the contributor journey comes in.

Contribution Management

The contributor journey is the process by which an individual goes from not knowing about the DAO, to lurking on social channels (e.g. Twitter, Discord), to establishing connections with other members, to making their first contribution, and beyond.

Ideally, the contributor journey fosters a growing sense of ownership and belonging such that the individual wants to grow with the community and make a larger impact towards its vision.

Contributor journey is a process design problem, but inherent in this are questions about what tools to use and how best to use them. Tools can address big questions like:

How to surface the right opportunities/information to the right people at the right time

How to quantify, incentivise, and properly reward contributions

How to foster trust through roles and reputation systems

Quests and Bounties are bite-sized tasks that members can take on to “level up” in the DAO. While only the first step for onboarding contributors, Bounties are a good way to give contributors a “Good First Issue” to work on because they are well-defined in terms of scope and deliverables. Bounties can be automatically verified if it’s an on-chain task (Rabbit Hole), or left up to the discretion of a DAO member that owns the bounty (Gitcoin, Coinvise).

Yearn has a dashboard that aggregates open issues across their code repositories, and a Telegram group dedicated to surfacing tasks for interested participants.

Bounties can be as simple as a Telegram group, but needs a dedicated facilitator to connect the right individuals with the right opportunity.

Dashboard of open issues across yearn’s repositories

The “Quest Complete” moment, as gamers know, is a powerful feeling that can itself be intrinsic motivators to take on a task. However, bounties by themselves are insufficient to drive individuals to take on more ownership.

Over time, members can grow their reputation within the DAO by earning “XP” and trust with each contribution. A few hours perusing a DAO’s Discord or Discourse forums can reveal its most influential members. Some are founding members, but many have organically emerged from the crowd by taking their own initiative to drive outcomes for the DAO.

A member’s progress through the contributor journey could manifest itself as Discord Roles, which when leveraged well, serve as proxies for trust. If there is a shared understanding within the community that a “Gold” member has contributed 500+ hours of work to the DAO, for example, you know to put more weight on what they say than someone without any badges.

Reputation as proxies for trust helps people allocate their attention within the DAO, it also tells outsiders who to approach when they need support or want to explore partnership opportunities.

Contributor tiers in Index Coop are tied to access rights and rewards

If a person or tool becomes a bottleneck, a task for the Community or People working group should be to remove the bottleneck. The contributor journey, when working well, should be the path of least resistance for community members to go from 0 to 1 and beyond.

The contributor journey doesn’t end when someone goes from being a lurker on Discord to a working group lead. Web 3.0 allows individuals to port their identity and reputation across applications and communities. As DAO-affiliation is more pluralistic and intertwined than traditional employer-affiliation, DAOs are much stronger vessels for individuals to build and communicate a holistic picture of who they are and what they’re passionate about.

Compensation

Payment distribution infrastructure is more mature relative to tooling in other organizational areas. DAOs can stream payments to contributors via Sablier or Superfluid, bulk-distribute tokens through Roll or disperse.app, fund grants through its Gnosis Safe multisig, and keep track of payments via treasury management tools like Parcel and Multis.

DAOs can even offer something akin to an employee stock option plan (ESOP) by locking tokens in an options contract and streaming call options to contributors over some vesting period. The power of DeFi primitives.

How different types of contributions should be rewarded is less clear. Tools like SourceCred quantify and assign “cred” to activities like Github issues, PR commits, and Discourse posts. Drawing inspiration from SourceCred, Govrn takes this a step further and works with individual DAOs to create a “Movement Model”, in which the community assigns weight to different types of contributions depending on its priorities.

Meta Gamma Delta’s Movement Model on Govrn

What’s nice about this is that you get standardisation for value creation within the context of the DAO. What counts as a contribution, and how valuable each type of contribution is, is up to the community’s discretion. This weighting can be modified through proposals at any time.

Movement Models may look completely different from one DAO to another, but that’s the idea. The community shouldn’t have to retrofit itself to metrics that were defined elsewhere. Bottom-up models like these plug into things like rewards distribution, bounties creation, and novel voting mechanics like quadratic trust.

Because the opportunity to contribute is open, the DAO itself might not know there is a need until a member of the community voluntarily builds a solution for it. It’s easy for “compensation committee”s or even governance to overlook contribution at the edges of the network.

Coordinape is a peer-based compensation tool built on the premise that contributors of a working group themselves know best who has created the most value. Since contribution comes from the edges, knowledge about the value each contributor adds also lies at the edges. At the end of some work period (an “epoch”), Coordinape allows members within a working group to distribute rewards to peers at their own discretion. This removes the need for a central authority of rewards distributors who has to (likely inaccurately) determine value creation at a granular level.

Screenshots from Coordinape. A rewards distribution tool that allows people who work closely together to reward their peers.

HR is one of the most under-addressed verticals for DAO contributors. There is a huge opportunity for projects to offer individuals a web3-native solution to handle “meatspace” benefits like health insurance, 401ks, IRAs, and tax compliance.

Today, these benefits are attached to the employer instead of individual employees, who are beholden to the providers and packages selected for them by a company’s HR department. Furthermore, they lose these benefits should they leave the company. This is a perverse relationship and a problem for freelance workers in general, but topped with receiving payroll in crypto, it’s a downright barrier for people to go “full-time DAO”

Opolis is one of the first digital employment cooperatives aimed at independent workers in web3. The platform serves as an employer-agnostic shared services layer, giving its members access to employment benefits, payroll and tax compliance services. By unbundling employment such that benefits are attached to the individual and not the employer, Opolis gives individuals the freedom and flexibility to get compensated by different DAOs while retaining the HR benefits of a traditional organization.

Opolis currently works with individuals from projects such as MakerDAO, Gitcoin, BadgerDAO, and more recently ShapeShift. Although membership is currently limited to US individuals, the platform is one of the few that bridges web2 stability with web3 self-sovereignty.