Guilds As Professional Associations: a new funding model

Governance
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Guilds As Professional Associations: a new funding model

Our DAO currently views guilds as talent pools that must be funded through the Grants Committee. However, the DAO will quickly run the treasury dry if we fund guilds without question. So, we need a better way to look at guild funding. This will allow the Grants Committee to put more bandwidth toward identifying how to fund projects rather than stressing over Guild funding.

I spoke with a number of guild coordinators to get feedback on membership numbers and pain points. Here are a few commonalities:

  • Membership numbers are very difficult to measure, but they’re much lower than the number of people holding the tag, the people listed on the guild’s notion page, or the people in the Sobol bubble.
  • Membership retention is really tough: people come and go, whether it’s because they think they can make more crypto elsewhere, our meetings don’t fit their timezone, or the vibes aren’t what they’re looking for—there’s a lot of “permissionless leaving.”
  • The gray area between guilds and projects is difficult to define. Many guilds run projects underneath them, while others are more true to the original talent pool ethos.

Thank you to all the guild coordinators who answered my questions. I’ve taken these conversations into account when building this funding model. Here we go!

The Numbers

For Season 3, our guilds were funded 8,060,986 BANK and 6 ETH. For IRL perspective, I find it useful to convert to USD.

Bear market scenario: BANK is 5 cents and ETH is $2,200. For three months of operating as talent pools, our guilds received $416,249.25.

Bull market scenario: BANK is at 10 cents and ETH is at $4,400. Guilds received $832,498.50.

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By contrast, projects, which are supposed to be the mission-aligning, public-facing, revenue-generating powerhouses of the DAO, received 11,124,100 BANK and 0.5 ETH.

Bear market scenario: $557,305

Bull market scenario: $1,114,610

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I’m proposing a new way to approach the What Is A Guild question. By doing so, we will alter our funding model for guilds. This will:

  1. Keep guilds accountable for the work they do, similarly to what we do with projects.
  2. Allocate needed BANK toward projects that align with the mission and generate revenue.
  3. Help the Grants Committee evaluate guilds without using excess bandwidth.
  4. Establish a model for guilds to begin spinning their projects into projects rather than nesting them under the guild.

Guilds as Professional Associations, Not Public Goods

We’ve been calling guilds “public goods.” What’s a public good? It’s something funded by the government and/or the government’s citizens so they can all share the good. Here are a few examples of things that are public goods in the United States:

  1. Your local fire department
  2. Interstate highways
  3. National Public Radio

How do those things get funding and operate?

  1. Mostly by taxes
  2. Sometimes by donations
  3. Sometimes by volunteers

If guilds were to continue operating as public goods, as they do now, we would need to:

  1. Tax all DAO members
  2. Ask for donations from DAO members
  3. Require that all guild positions are run by volunteers

We should not do any of those things.

I’m proposing we shift our mental model around what guilds are and find a new way to fund them.

Guilds are not public goods.

Guilds are not public goods because:

  1. They serve a small number of people, not everyone.
  2. They don’t serve an immediate, life-saving need. (My house is burning down, I need the fire department now.)
  3. They don’t really operate or communicate between each other in a way that benefits the entire DAO like an interstate highway would—at least not in a way that is measurable or large-scale enough to fund, like an “infrastructure bill” in the U.S.

However, there are two guilds that are public goods and should continue to be funded as such:

  1. Ops Guild
  2. Treasury Guild

Instead of seeing the remainder of the guilds as public goods, we should see guilds as professional associations.

What’s a professional association?

  1. It’s a group of professionals in the same field of practice who choose to share knowledge and resources.
  2. It’s not a union, or a lobbyist group, or a homeowners association, or your local elementary school’s opinionated PTO.
  3. It’s more like a group of local blacksmiths in thirteenth century England, a society of medical professionals in the modern United States, or a trio of lollipop-enthused confectioners.

How are professional associations funded?

  1. In return for benefits, members pay dues.

Okay. You probably don’t want to pay dues to your guild. I argue that that’s a red flag. But I’m not about to propose that members pony up BANK to their guilds. I just want you to think about why you would or wouldn’t pay dues for a moment. What is the measurable value the guild brings or doesn’t bring you? If you could, would you only operate within project teams and not be part of any guilds? If your guild vanished, what would happen?

Take a moment to have this small thought experiment.

….

….

Now, cease your thought experiment, write down your thoughts and feelings on a sticky note, and let’s look at a new method.

How to fund our guilds

([# active members] x [10,000 BANK]) + [nested project needs, which will be clearly defined] = [Guild seasonal funding]

More simply,

(members x 10,000) + nested project funding = guild funding

This method incentivizes guilds to:

  • Retain and cultivate active members.
  • Think critically about the benefits they offer members, therefore incentivizing members to stick around.
  • Create clear membership standards (that are evaluated….possibly by GSEs).
  • Decentralize and automate tasks as much as possible to prevent overhead that member management brings.
  • Define their nested projects and spin them out into separate projects.

Part one of the equation: Active members are not everyone with a guild tag.

How do you evaluate who your active members are?

Here’s one way:

An active member is someone who is involved in the guild, not just someone who has the tag. In the Writers Guild, our active members are individuals who have completed at minimum one paid task in one of our nested projects over the course of one season. An example of a paid task is writing an article, editing an article, or holding a role.

Here’s another way:

An active member is someone who receives and gives GIVE tokens in your guild’s Coordinape round.

And a third way:

Meeting attendance can be a good indicator of how active your guild members are. For example, the PLM working group argues that attending over 50% of meetings = being a member. This opens up issues around time zones, but large guilds have alternate (or should have alternate) time zone meetings to serve other contributors.

Part two of the equation: Why 10,000?

If each individual member requires the guild more than 10 hours of work a season, then there’s something broken in the guild’s structure. That guild will need to figure out a new way to work.

As guilds become more efficient and work radiates outward to projects, I envision the BANK number will lower to 7,000, then to 5,000, and maybe even 3,000. We must operate guilds like efficient professional associations that give value to members, not slow government bureaucracies.

Part three of the equation: does your guild have nested projects?

Projects should normally be separate from guilds, but they aren’t always separate from guilds. Projects that are nested underneath guilds and use guild funding should be broken out and explained like projects. These projects should then be encouraged to spin out into separate projects that get funding differently from the guild. We don’t want projects “hiding” under guilds, but we also don’t want to make guild-internal projects obsolete.

Guilds should:

  • Clearly report the budget and explain which budgets are going to what projects. This will help the DAO identify how much guild funding is actually project funding.
  • Explain how they have projects “fitting” underneath them.
  • Be more transparent in spending.

The nested project funding would be determined based on:

  • Squad background
  • KPIs
  • Clear goals and roadmap

What this looks like in practice:

The Writers Guild defines membership based on the number of contributors who have completed a paid task over the course of a season. Following those standards, it has 55 active members. This means that 55 individuals completed a paid task or held a role in Season 2.

The Writers Guild was funded 592,000 BANK for Season 3. This was one of the lowest funding requests. But it’s still nearly $60,000 in a bull market.

55 active members x 10,000 BANK = 550,000 BANK.

All our projects are external to the guild, so we’d be funded 550,000 BANK.

Let’s look at another example, the Dev Guild.

The Dev Guild has about the same number of active members as the Writers Guild, but they have nested projects. So, their funding would look approximately like:

550,000 + nested project funding requirements = X BANK

The nested project funding requirements would be broken down and evaluated like a project.

Quick FAQ:

What if my guild generates revenue, separate from projects?

Excellent! This revenue should be used to fund the guild’s operations. Maybe it should be broken into a project, though?

What if my guild needs more BANK than 10,000 per active member?

Time to work on some automation and some time management. Set up a time to chat with the PLM working group!

A final word

We need to take some of the centralized decision making out of the Grants Committee. Right now, it’s too easy to get a fat sum of BANK for a guild. We need to hold guilds accountable like we hold projects. We must approach it differently—with guilds as professional associations.

Looking forward to hearing your perspectives in the comments.

  • Agree
  • Agree but needs revisions
  • Disagree

0 voters

Next steps:

  • Aggregate comments on this post and publish a second draft if needed.
  • Present the new funding model to the Grants Committee to get feedback.
  • Publish a write-up of the new funding model in the Weekly Rollup.
  • Hold a formal vote via forum or snapshot, but given that this isn’t requesting any funding, I believe forum would be sufficient.

Next step for YOU that will only take five minutes:

How’d your guild-vanishing thought experiment go? What’s written on your sticky note? Tell me in the comments here or DM me @samanthaj#8487. I’d love to talk about it! The more human data I can get from you, the better we can make our DAO.

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Wonderful work by samantha.

Luckily Education Guild has already gone one step ahead of this. I 100% agree with this.

We currently are moving on mostly projects based and clear objectives based funding.

And every single line item is now accounted for, with real sweat and outcomes.

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I understand the concerns and needs for an adjustment. thank you samanthaj for the work you put in!

10k bank per active member per season seems reasonable, however I would prefer earning even less for contributing to a guild, so the guild can put more bank into defi, into liquidity pools and earning interest. As time goes on, each guild could be funding their members and future projects with the passive income that has been generated by investing in defi. This approach could take some load of the grants committee and incentives saving instead of spending.

I support everything that helps us onboarding more people and helping them finding their way to contribute to bdao. If the new funding model helps with that than let’s go!

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Wow. This was a great post. Putting all the funding numbers in one place and interviewing all the guild organizers was a very valuable contribution.

I hope you get PAID for it. It’s clear you put a lot of time and thought into this.

We have been discussing the issues you identified around membership numbers and retention within the Dev Guild.

I am most interested in getting to a sustainable model for the DAO.

I agree with you that guilds should be able to answer:

I would add:

  • What is the value proposition of the guild - to the DAO, the projects, and the individual members?
  • Who are the guild’s customers and are they willing to pay for the value the guild provides?

I don’t think that there should be a one size fits all approach to guild funding. I think that guilds could raise funds from the DAO, projects, and / or the guild members.

Right now, the DAO is the customer and funds the guilds. So, what value does each guild provide the DAO? How does a guild contribute to the DAO’s ROI?

And here is where I am a broken record in all posts and meetings.

For clarity, these questions are directed at the greater DAO not just you @samanthaj. I would be interested to know what you think though!

How can anyone define the value a guild provides the DAO without an understanding of the DAO’s plans to achieve profitability and ROI?

How does the DAO get ROI from guilds and projects?

  • Do any of these investments have anything more than a tacit agreement of 10% of revenue back to the treasury?
  • At what revenue levels will 10% achieve any sort of meaningful returns?

At the current funding levels, (in the millions of dollars) when does Bankless DAO expect to become profitable?

If there is no ROI or plan to become profitable, what is the fundamental value of the BANK token?

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Nailed it. This is a home run in research, observation, deep thought, and foresight. I am 100% behind this. Hats off to you @samanthaj :clap: :clap: :tophat:

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Great post, if you do this for Projects we don’t need the GSE anymore! There are of course some topics to discuss, for example in S1 the translators guild translated tons of material, this is now a projecs (IMN) so this would be the same for writers I assume, the newsletters/mediums won’t count towards a guild member. Otherwise of course guild with nested projects would earn more BANK, easy comparison between writers (paying for content to newsletters) and Translation who spun their production out entirely to a project. Does the writers then have more members or need more BANK, I would think it would be equal.

Both paths increases the need for a organisation to collect and funnel the talent to the projects, coordinape can/will be gamed the same way as the tag would be I think but maybe its closer. Maybe meetings is the best, but it also has issues.

But this is a big step in the right direction and also a step back in time to the intention of guilds = talent pools and as such should be funded to ensure that structure. The problem we ran into (where I’m active) is (1) no projects budgeted for marketing but all project wanted marketing, there is no easy first step to get paid by the DAO when projects are the main source of work. (No natural onboarding. So we created micro roles to get people paid in guilds.

So while I love the idea I think this needs to be viewed in the ‘GSE’ scope of both projects and guilds to allow for discussions around coordination and budgets.

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If you don’t mind @jonvaljonathan I’d love to piggy back of your amazing response, as I think it touches on the viability of the DAO long-term and the utility of DAOs in this regard.

@samanthaj I am trying your thought experiment and have the following ideas:

  • I’d pay dues (optionally) to my guild if I saw my dues as an investment into the projects and revenue generation initiatives to sustain the DAO, and in turn my ROI (*ROD?)
  • The measurable value I get from the guild is BANK. I joined the DAO to earn and contribute to a mission I believe in - enabling others go bankless. My guild pays me BANK in return for my dues paid (both sweat and BANK) to fund its projects.
  • I am currently more active in a project team (Bankless Academy) than in the guild (Education) - and I am fine with this. I find the project scope more focused and easier to contribute to.
  • If my guild disappeared, it would either reform out of necessity or reform as an integral part of other guilds in the DAO.

I see the DAO as the sum of its parts; Guilds organise the DAOs activities and projects delegate guild initiatives into teams working towards the viability of the DAO through value creation and member compensation & retention.

My 2 cents.

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I’m curious as to the frequency these dues would have to be paid. Is this a 1 time payment or a regularly recurring payment? I think a 1 time payment will eventually run out unless the guild is always growing its membership numbers. If these dues were seasonal, I could see guilds becoming self funded just from dues. But then we have to determine how guilds are rewarding contributors compared to projects. It is my opinion that most guild funding covers remunerations to role holders. Are participating members earning more than the proposed dues? If not, they would just stop paying dues.

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Thank you for highlighting many roadblocks and suggesting solutions.
In S3, 60% BANK was allocated to projects and 40% to guilds as you have highlighted. The main problem I see is that if we keep spending BANK at the current rate we’d be gone for soon.
This is why I think we need to look at two places

  1. BANK distribution between Guilds and project

If we are to say that projects are our bread and butter, we should look at allocating 80% seasonal funds to projects, as opposed to 60% now.

  1. BANK per hour/max. BANK per season.

The IMN project is working on an average of 70-80 BANK/hour, whereas rest of the DAO has 1000 BANK/hour rates. This is not sustainable since I wasn’t able to find a single person in the DAO who could tell me that they are being compensated at 1000 BANK/hour for the whole time that they dedicate to their role. So in my opinion, it’s incorrect to say there is some problem in the guild/project if a role is over 10k BANK at (1k BANK/hour).

What we should focus on is:

a. Identify what is the max BANK we want to spend per season?
b. What % of this should go to project vs. grants?
c. How to allocate between guilds and projects?

The first two are open questions for the DAO. I personally think we should allocate less and less BANK each season for expenses. It’s meaningless to argue about BANK/hour since it’s pretty much a YOLO number that is not uniformly followed. Rather, we should evaluate on the basis of:

‘Given the amount of funds we have what is xyz project or abc guild worth this season?’ Projects/Guilds with low funding but high contributor commitment will find ways to get funds from outside the DAO and succeed. Projects/guilds with low results will not receive popular support either way.

For point ‘c’ a simple snapshot vote to signal distribution would suffice. More contributors interested in a guild/project = more BANK allocated towards it in any given season

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I really like the idea of an 80/20 split and sticking to it. That’s a very actionable step that I feel like we could move toward in Season 4.

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Yep exactly. Paying dues would get real messy real fast. Which is why I think a different funding model from top down makes sense. BUT, if guilds truly are talent pools, shouldn’t that talent be paying their coordinators themselves? Paying for a service, essentially?

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Thank you for raising this up. :heart: While I support rethinking the funding model and thinking sustainable, I think we need to look into a) the motivation of active members b) whether the incentive will lead to the value creation for bDAO before making a decision.

I conducted the onboarding surveys for both the Marketing and Daolationships guilds, and the results showed that money is not the first thing for people to join bDAO but goes after "share the same value“, "learn something interested with”, and “do something good at”. I agree we can provide some BANKs for active members, but it’s better not a big number like 10k, which may discourage people who are more active or make more contributions. The task-based compensation may better encourage bDAO members to make more contributions.

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Thank you for your comment! But we’re not giving the 10k to members. That’s how much the guild gets per member to fund their operations (it goes to the guild treasury to pay for guild role holders, bounties, etc.)

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TL;DR
I propose a different solution. Guilds are community centers whose purpose is to educate members on how to be better project contributors. Funding is only given to projects and developing members’ skills.

Thank you for putting in the time to research and post about this topic. The public good analogy seems like a real stretch. I’ve never heard of someone calling a guild a public good. Is that actually happening? Even if that term is being used, it doesn’t mean we would have to operate in the same way and tax members, ask for donations, or have volunteers. This just doesn’t seem like a strong or applicable argument to me.

Pushing that to the side, I see this problem and solution in a different way. I’m going to take points from “public good” and “professional association”.

Guilds are not public goods because…

They don’t really operate or communicate between each other in a way that benefits the entire DAO like an interstate highway would—at least not in a way that is measurable or large-scale enough to fund, like an “infrastructure bill” in the U.S.

A professional association is…

A group of professionals in the same field of practice who choose to share knowledge and resources.

Those two statements are directly related. And the real problem in my opinion is that guilds do not do these things and they should. Guilds “do not operate or communicate with each other.” And we are not a “group of professionals that share knowledge and resources.” I’ve said this in the last two coordinape surveys. To me, it feels like we have created an environment where we all operate independently from each other instead of working together. Someone literally told me that their role is to develop people in the guild, not the DAO, so they didn’t see a need to promote resources to the DAO. Well, the two groups need each other to survive. So we should always have the two in mind. And whenever two teams want to work together, it’s “How are you going to pay me?”. If instead, we had an environment where we all worked together towards a single goal and were rewarded when that goal was met, we wouldn’t be nickel and diming each other for BANK any time someone did a minor task. And we wouldn’t be gating resources to only active members of a certain guild.

It’s not obvious to me that your proposed funding model will help us all work together or share knowledge and resources. If I was to offer a solution that could potentially create that…and I haven’t spent days thinking about this so it might be a terrible idea…it would be something like this…

  1. Guilds operate like clubhouses. They are just a place where people hang out with individuals with shared interests.
  2. Each guild gets a budget, but not for projects. It’s for member development to support stronger project delivery. For education to help guild members learn the skills relevant to that guild. And those learned skills are then used to contribute to paid projects. An example is what design is doing by teaching members how to use different tools. If you want to be a contributor to a project like Bankless Academy, take a blender course from design. Tokenomics can get an education budget for how to create better token-driven systems. Want to help create utility for BANK and drive up the price? Take a course from tokenomics/treasury. Learn about the challenges so you can be better positioned to solve our biggest problems. Writers guild can get a budget for teaching copywriting, and so on. And really, education guild could even be turned into a project that is funded upon successful education of bDAO members on Web3 topics. That’s my guild so I’m sure I’ll get hated on for that statement. But really, guilds can just be individual communities. Not public goods but community centers. DAOlationships could also be the same. Community development and business development for BanklessDAO. Funding comes from successfully creating relationships that strengthen our public image, get us access to grants, paid education opportunities, etc.
  3. Project proposals can come be born within the walls of the guild, but the Grants Committee is what funds it. And again, the emphasis is not “how will I get paid”. It’s, “How will this advance the DAO”. But ultimately they will get paid if they put together a strong proposal with a strong team.

This makes us all work together because projects pull talent from various guilds (community centers). And because we only get paid from well-put-together projects proposals, we need to work together to get talent from every single guild. By giving guilds an education budget, we develop all bDAO members and build the skills to be able to work on paid projects.

We need to start thinking like an interdependent system. One where we all rely on each other for success. Guilds develop skills that are used to get on paid projects and solve our problems. As you develop skills, you can get paid to transfer those skills to help level up other members to get on paid projects to solve problems and on and on and on.

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Thank you for this very thoughtful reply! I appreciate it. I was curious what metrics you’d use to determine guild success, and therefore guild funding, if not using a member-based metric. I feel like we agree on a lot of things! Budgeting for member development rather than projects, for example.

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Thanks a lot for explaining it. Then this method means a guild with less than 9 active members will find it hard to afford 3 common guild role holders (guild coordinator, governance coordinator, and talent coordinator) before having any Coordinape allocation and bounty budget.

So maybe we could:
a. Investigate the number of active members for each guild to get a clear picture to help us make decision.
b. Do not count the essential guild holder role budget into this 10K BANK per active member rule and then adjust 10K to some small number.

On the other side, we should have Ops(GSE)/Grant committee to review whether each guild meets bDAO’s goal/vision/strategy. If a guild is important but has fewer active members, we may still want to fund it.

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  • I’m not sure what the sentence above means - are you suggesting that each active member generates 10 hours of work for role holders?.
  • From the comments, I can see that the idea is for GC to fund guilds based on a figure of 10K per active member, but it was not particularly clear to me from the proposal whether this was the case or whether you actually were suggesting that members pay dues.
  • The discussion about guilds being professional associations rather than public goods indicates that you don’t think GC should fund them, but then you simply suggest a different method of arriving at the amount GC should provide in funding…
  • I think before we adopt this method it would be wise to work out all the numbers - if they all end up similar as per your Writers Guild example, then good, but also, what’s the bottom line benefit in that case? If they don’t, we need to work out why not, rather than assume there is a time management problem.
  • Would every guild use the same method to work out the number of active members?
  • How would you propose that Ops and Treasury be funded - do they still get to nominate their preferred seasonal budget?
  • Lastly, I wanted to point out that Research Guild is missing from your calculation of total funding.
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Thanks for taking the time to set this out.

The issue I see is a simple one: everything is called a guild, regardless of what it does. It can be solved using any wording we wish but it boils down to talent pools to supply bodies, lines of business of products or services or projects developing products or services, and internal operations and governance.

1/3
Ops Guild and treasury guild are not guilds at all. The test for a guild is if you can farm a live body out to a project or a line of business. Stop calling them guilds and the problem goes away.

There are many words we can use, I will call these workstreams or the equivalent of internal departments. These are not guilds.

2/3
A product or a service, is a product or a service. These are projects or lines of business or revenue or whatever words we choose to call them. Guilds are not in business. The fact that a project may draw solely on the resources of a particular guild does not alter that it is a project. Allowing a guild to claim it produces a product or service is an error by governance , to be corrected by operations or governance.

3/3 the main public good of guilds is the onboarding point and socialization with the DAO and shared community, this becomes a tribe inside a tribe. Public goods are not all publicly funded or based on emergencies. In fact the vast majority of public goods are shared and free: nobody pays for lakes and air or wild vegetables or food that grows.

4/4
We work in crypto. It’s not helpful to pull towards the meat space to add more speculation about market conditions trying calculate what tokens are worth in USD to figure out a distribution. It is the same as trying to time the market.

We probably wouldn’t be having this conversation if we addressed the membership and token issues. ie Separate membership (NFT) from BANK token and created parallels consensus mechanism in absence of a protocol ie staked validators etc

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Guilds should not be paid.

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Does anyone have a document that explains Grants Committees Current Operations and Governance Model?

I am looking for a document that explains how the Grants Committee makes decisions, other than that a project must align with the DAOs Mission and Values. Also I could find the snapshot that Created the Grants Committee for Season 1 but is there a snapshot that explains the Grants Committee project for additional seasons?

I am also looking for budgeting and accounting documentation, is this done via the Treasury Guild?

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