- Brain Dump #1 - Governance, Revenue, & BANK
- Brain Dump #2 - Framework for Balance of Power
- Brain Dump #3 - Is $BANK Money?
- Brain Dump #4 - When and How Do We Scale?
In recent weeks, I’ve noticed an uptick in conversations around how projects should categorize themselves in relation to the larger Bankless DAO. In other words, what type of relationship should projects have with the DAO? This post is an attempt to formalize some of my personal thoughts on the matter and hopefully provide a framework for others to think about this.
- Bankless DAO is a growing ecosystem of nodes that all tie back to Bankless DAO
- This ecosystem is made up of two organizational sub-units: core nodes and ecosystem nodes
- Core nodes service the Bankless DAO community and support the broader ecosystem.
- Ecosystem nodes extend into the broader world and have looser ties to Bankless DAO
- Successful projects will eventually spin out into ecosystem nodes
- Ecosystem nodes should pay some form of tribute to DAO treasury.
- Ideally, each node (core & ecosystem) operates as a DAO, but not necessarily.
When I envision Bankless DAO at scale, I see a large ecosystem of discrete groups (nodes) all operating in harmony with a shared set of values and processes. I see the image below, where each line could be some form of capital flow, human interaction, transaction, or some other type of connection. What’s beautiful about this framing is the autonomy and resiliency that hierarchical organizations cannot hope to achieve. (Some unrelated musings on this topic: DAOs as Economic Engines)
As we continue to organize and coordinate into working groups, I’m seeing Bankless DAO separate into two different types of nodes:
Core nodes are organizational units that service the Bankless DAO community directly. Their primary purpose is to support the ecosystem and act as a core for the broader ecosystem to build on. Example include:
- Projects like DevOps, Website, and First Quest
- Eventually membership benefits (like NFT-Club or Gaming-Club)
Ecosystem nodes are organizational units that benefit Bankless DAO, but ultimately have a strong external-facing component to them. They are projects that have incubated within Bankless DAO and have “spun out” into their own evolving entity (the concept of “spun out” is a great heuristic for what qualifies as core vs ecosystem). Examples include:
- Bankless Academy
(When I think of DAOs as the “Future of Work,” I think of ecosystem nodes where people can plug into or create their own project!)
As implied, core nodes build the foundation for other ecosystem nodes to build off of. When mapping the relationship between them, ecosystem nodes will:
- Access talent from guilds (Example: Fight Club Education Grant)
- NOTE! Access is not the same as labor! Projects are entitled to preferential access to guild talent, but must still pay for their labor.
- Promotion on media channels (twitter, website, newsletter, community calls, discord)
- Piping opportunities that come to the DAO to relevant ecosystem nodes
- Rely on infrastructure maintained by DevOps
- Early stage funding via Grants Committee or Treasury
- Late stage funding via venture DAOs or VCs
Ecosystem nodes derive a lot of value from core nodes, especially during the beginning. As such, ecosystem nodes should pay some form of “tribute” (to borrow a term from MolochDAO) to Bankless DAO’s treasury.
(In this model, core nodes would not pay tribute to the treasury for the services they provide to the broader ecosystem. However, something like client services, where external clients source talent from guilds to complete tasks should pay tribute to the DAO. For example, of revenue earned from paid written content from the likes of Argent or BanklessHQ, 10% goes to the Writers Guild treasury and 10% goes to the DAO treasury.)
Here’s where things get tricky – How exactly do we create a fair and simple way that ecosystem nodes can operate without much friction. My (unrefined) takes:
- Baseline 10% of revenue generated by an ecosystem node should go to the DAO treasury
- For nodes that rely heavily on the DAO’s media channels and members to generate revenue, this number should be 25%. Projects like DAOpunks and NFT showcase fall into this category.
You may have heard the term “subDAO” thrown around. I think subDAO is a misnomer and can be easily misinterpreted to mean different things. My quick two gwei here is that a subDAO is just a DAO within a DAO. Any node (core or ecosystem) should strive to be a subDAO (in that they adopt the DAO model and infrastructure) but is not necessary.
For example, Fight Club will need to incorporate for legal reasons, meaning they cannot be a DAO by definition. They can certainly operate with the values of a DAO, but have off-chain structured hierarches in the form of an LLC.
On the other hands, Guilds can easily turn structure themselves as DAOs and go on-chain. It’s just a matter of what makes the most sense for that working group.