BanklessDAO subDAOs and subTokens

Title: BanklessDAO subDAOs and subTokens

Author: Grendel

Date: Aug 25

Faced with some stimuli received, mainly from Joaoh of BanklessBrasil, we began to think about how to create and organize subDAOs linked to BanklessDAO.

In none of the cases there would be the desire to terminate the link with BanklessDAO, but to continue to use both BanklessDAO and the subDAO.

The sub-DAOs could be of different types, for example:

  1. A local community that wants to create engagement in its own language, evolving towards a decentralized and token-based model;
  2. A group of DAO’s creators who decide to collaborate for some specific purposes using an ad hoc platform;
  3. A DAO’s project that wants to continue its efforts using governance elements or aims not present in BanklessDAO.

Following the previous examples, subDAOs could bring several benefits to BanklessDAO:

  1. Reach more people around the world. Or help shaping new communities without the pressure of too expensive stakes and retribution models;
  2. Get even more significant contributions from your creators;
  3. Allowing a greater degree of independence to some projects, without losing the link with it.

Each new subDAO should own and use its tools:

  • A channel for the community, could be Discord;
  • Tools to be able to collect contributions and exercise consent, soft and hard (Discord, Snapshot, DaoHaus…);
  • A specific token, permanently anchored to the BANK.

To pursue the issuance of a new specific token that has the BANK token as collateral, which in the following example we will call subBANK, our proposal includes the following steps:

  1. The proponents of the initiative decide the amount of BANK to be placed as collateral to obtain the issue of the subBANK, for example 50,000 BANK;
  2. The subDAO and subBANK proposal is presented in the forum in order to request acceptance by BanklessDAO;
  3. If the proposal is accepted, BanklessDAO will undertake to place as collateral an amount of BANK equal to that decided by the proponents of the initiative, in this example equal to 50,000 BANK;
  4. The 100,000 BANK placed as collateral will be kept in the BanklessDAO treasury or in a specific smart contract;
  5. The subBANK will then be issued with a ratio (for example) of 1: 100. Against a collateral of 100,000 BANK, 10,000,000 sub-banks will be minted;
  6. 50% of the sub-banks will be delivered to the multisig of the supporters of the initiative. The remaining 50% will be hoarded by BanklessDAO.

In a different approach, the DAO could use a pool for swapping BANK and subBANK tokens (thank you Icedcool)

At the end of this process, the proponents of the new subDAO will hold 50% of the subTOKEN issuance and it will be their concern to find the best ways to increase the level of distribution and decentralization.

50% in the hands of BanklessDAO can be transferred to third parties against payment of the same in BANK, always maintaining the ratio of 1: 100 indicated (provided that it is not decided to opt for the free market and therefore agreements are made in this regard between BanklessDAO and the subDAO).

The reasons why I think it is important for the DAO to place 50% as collateral are the following:

  • ensure that the subDAO has a minimum level of decentralization;
  • preventing original subDAO team to act limitless;
  • maintain a strong link with the subDAO and its members;
  • create a system of subTokens that can enrich this new ecosystem.

I await your thoughts and reasoning. If this proposal is considered valid, I will collect all your advice and put it to a vote.

Thanks to the people who helped me reach these conclusions: Eagle, Frogmonkee, Icedcool, Joaoh

9 Likes

I like this proposal, just have some questions would like to discuss:

  1. Could a whale buy everything from the 50% BanklessDAO treasury? How could this be prevented?
  2. If the amount of BANK gathered by the subDAO community is large enough (say 1M) - would the DAO still be able to double upon it?
  3. What are the benefts of keeping the same ratio between BANK and subBANK forever, rather than free market pricing?
  4. Would there be an accountability process from the subDAO to the DAO every now and then to show progress and/or ask for support on projects?
  5. Would tokenomics for the subDAO be worked on alongside the DAO?
2 Likes

Thanks for the questions and I’ll reply with my opinions:

  1. It should be prevented, perhaps by setting maximum purchase thresholds
  2. in my opinion the subDAOs would be like startups on day 0: they must receive the necessary funds to get started. Could be 100/250K? The DAO will decide.
  3. First of all, BanklessDAO must ensure that a subDAO with its own name behaves according to similar ethical models. Furthermore, financial stability is needed. Without an anchor to the BANK, the subBANK would be worth as much as making the token yourself. When they grow up enough they can leave the nest and move into the free market once the obligations related to the tokens with BanklessDAO have been resolved. Obviously the relationship between the DAO and the subDAO should be reviewed at the same time.
  4. It depends on the relationship between dao and subdao: if the subdao wants to be free and independent, it will ask for a grant from BanklessDAO as it can ask any other body.
  5. Once it exits from an organized exchange system, the subBANK will be able to have the tokenomics that the subDAO holds.

I hope I have given you some useful answers.

2 Likes

In the outlined framework, I like the idea of sub-tokens as it maintains the incentives between BanklessDAO and subDAO aligned.

The subDAO has organizational independence but, due to the collateral and the ratio between the tokens, remains bound to BanklessDAO and its core mission.

Bankless DAO would become an … empire! Lots and lots of inspiration for Perchy :slightly_smiling_face:

3 Likes

This seems very worthwhile. I think the pool for swapping the tokens would be an innovative approach.

1 Like

I’m probably missing context here - what’s the difference between a media node and sub-dao? Do we actually need both?

Is the intention behind this scope to create a type of incubator for new companies to the space? Which would create the differentiator between media node (content producer) and projects bdao explicitly endorses?

If this was all answered elsewhere you can point me in the right direction :slight_smile:

2 Likes

Thanks for the question, I think it is extremely timely and helpful to better understand what I mean by this project.
A media node is a media outlet, a channel through which bankless voice can be propagated.
A subDAO is a community (token gated), which can also refer to the community that is created around the media node, with its own subToken.

A subDAO acts in the opposite way to the fragmentation, chaos and division of the ecosystem.
It helps the growth of the ecosystem, allows its members a degree of entrepreneurship focused towards some purposes that in BanklessDAO may not be primary.
In addition, it helps to attract local communities that can experience DAO in their own language and with less participatory economic effort than that required by BanklessDAO today. Many exponents of the local community will then be able to “evolve” into members of BanklessDAO, we could also define a specific role for those who participate in subDAOs without being members (35K BANK) of BDAO.

I hope that the explanation was clear and exhaustive, otherwise I will be more than willing to provide more elements.

1 Like

To me, the excitement I enjoy in this DAO and the global bankless movement as well as a key driver is decentralization. This proposal appears to support that direction and makes several positive possible more inclusive outcomes. I support this effort.

1 Like

I like what I’ve come to grok is the intent of this proposal but would love clarification on a few points:

  1. What qualifies as a candidate for a subDAO? – language/geo-centric sub-community; incubative tech not 1,000% aligned to media company mission that could be independent but should remain strongly coupled to BANK (e.g. bounties board a DAO coordination tool); both; other?
  2. How would we evaluate if subDAO is warrented vs. it perhaps being better suited to staying within BANK-core?

I like this directionally but feel like it really needs to be flushed out w/ life-cycle of a subDAO and more visual or detailed explanation of the tokenomics for those of us who aren’t quick to grok the how the issuance and exchange would work (examples or flowchart would be killer)

@thinkDecade I think you’ll find this proposal interesting and relevant to your desire to move BanklessAfrica forward and challenges doing so w/ the 35K hurdle in place for the BanklessDAO-core.

4 Likes

Thanks for your feedback, @Bpetes

1 + 2: IMO, each BanklessDAO member group of members can decide to create a subDAO. We can think of drawing up a code of ethics and behavior to be followed to keep the subDAO in the orbit of BanklessDAO. It can certainly be a local community, from which the idea was born. But it can be a Guild or a project. Surely the new subDAO will have to be financially independent from the BDAO, which already bears the burden of guaranteeing for the possible second 50% of the tokenization of the subToken.

My desire to present it as an idea stems from the need to reflect all together on the possible features.

As for the life cycle, we could see it as an acceleration program:

  1. idea of ​​the subDAO
  2. creation of the subDAO
  3. growth and transformation
  4. independence, which is achieved when the BDAO no longer has the subTokens in hand and when the subDAO wants to proceed autonomously, perhaps asking for funds on the market

I will be working on the flowchart over the weekend.

Thanks again!

5 Likes

Another thought, it’s a bit of a ‘long-tail’ sorta risk and circumvented by good actors and strong community but…

  • For the incubation of tech; I’m curious about what Legal guild’s thoughts would be on IP ownership/rights/licensing etc. in this subDAO structure if something like Academy or DeGEN/Bounties became a subDAO?
  • In similar train of thought, but lower risk, what about copywrite/trademarks and use of (or revocation of use of) for media subDAOs
4 Likes

I think @Eagle will be able to answer you better than me.

In my opinion, the rules governing relations between Bankless and the French, Russian, etc. Bankless media outlets should be applied, as well as those governing relations between BDAO and media nodes.

In my humble opinion, and with fresh eyes as I’ve only recently joined bankless, - keep it simple! banklessDAO is only just getting itself sorted, with lots of projects going on and changes in the pipelines.
There already are geographic regions in Discord - perhaps folks could use these to communicate in their languages, perhaps organize local meet-ups etc. if they wanted to.
Perhaps I am lacking the necessary experience here, but why could subgroups of banklessDAO not all use $BANK?
There’s one ETH for everyone, regardless of language or geography, after all!

5 Likes

In the ‘keep it simple’ principal – perhaps subDAOs are the exception not the rule and perhaps we need to just get much clearer on the current tensions to be solved and current magnitude to ensure we’re not over-architecting (or prematurally doing so) in this case.

Which subDAOs are bursting out the door? Which initiatives are fail to start in current structure and why? – I like the call here by @Emgrazie to doublecheck the problems to be solved before we evaluate if this is the ideal solution.

5 Likes

Personally I believe that it is always necessary to precede the evidence of need, instead of chasing solutions.
Everything is easy when you know it, everything is difficult when it is new.

The idea comes from direct and other “indirect” solicitations.

For direct solicitations, I can mention BanklessBrasil, for example, and probably other local sections that were concerned about how to manage monolingual DAOs where the threshold for entry was lower than that of BDAO.

For the indirect ones, it could be a solution for the VCDao / FightClub and for another project they told me about these days.

I do not claim to force the DAO to proceed in this direction, my will is to think about possible solutions to problems that are beginning to arise.

5 Likes

You raise an interesting point. As far as I know, trademarks of the DAO belong to the Bankless LLC.

As to the intellectual property related to inventions / contents created by guilds / members the issue is discussed also among other DAOs (eg curve) which do not have legal personhood.

There seems to be a way in the US to enforce this IP rights, but having an entity which holds this rights would make things easier.

Can guilds creare their own legal structure (eg an LLC)? I would say yes.

Can legal entities representing guilds be holder of IP rights on matters developed for the Bankless’ DAO mission? I think that this would need to be decided by the community

3 Likes

Interesting.

Charlimit

I hear the need here being that $BANK is too expensive for some countries, and subdao’s are the solution.

In the spirit of keeping it simple, we could create $sBank and allow people to join based on their $sBANK, and only have access to the specific folder(s) for which they have $sBank. Say like… $sBank.br, would grant them access to the Brazil location, and any subfolders.

That way they would be tied to the DAO in terms of discord, and still be able to get involved.
In functioning they would still be subdao’s in that they would need to have governance, coordination, etc. They would just be within the same discord.

From a #dev-guild perspective, personally I would still want the people that show commitment(through $bank OR $sbank), to still be able to get involved with #dev-guild projects, regardless of their location.

Then they could be paid in $Bank, which would probably be a very positive financial boon, as well as onboarding people into the DAO proper.

3 Likes

Keeping everyone in the same discord would alternatively create:

  1. Wealthier BDAO members and poorer subDAO members, or communities that don’t talk to each other: it would be unfair
  2. The members of the subDAO who converge in the BDAO thereby canceling the need for the subDAO

I fear the model (1) very much, as the linguistic limitations would lead the members of the subDAO to stay together but they would see how the other members are paid in BANK and they in a very diluted form.

Also … BanklessDAO’s Discord server already seems complex enough to me … :grinning_face_with_smiling_eyes:

3 Likes

I am writing to indicate that the idea is proceeding with its development. After several considerations and exchange of views, any sub token should necessarily reside on L2. Otherwise, mainnet fee costs would continue to be prohibitive for many regions of the world.
A subDAO may also live within the BanklessDAO Discord itself, with one or more channels only visible to members.
The considerations are numerous, perhaps the best thing is to wait for the application of a real case.