Purpose Driven Guild Funding

Authors: @jengajojo, @Bananachain

Summary:

  1. Pivot from purely member based guild funding to funding guilds based on their ability to fulfil their mandate as written in the constitution:

“Guilds are professional associations of subject matter experts focused on onboarding, education, and community building.”

  1. Reduce BANK emissions (= sell pressure) by capping BANK emissions to 5.5M BANK/season from S7 for guild funding

  2. Guilds may retain their residual budget from S6

  3. Introducing parameters enabling each guild to influence its budget level individually.

Background:

Prior to the guild vs departments split, all guilds had to be funded in order to keep the DAO functioning. But with the formation of departments as mission critical infrastructure, guilds can now be held accountable for their function in the DAO.

Guilds do not, and have so far not been expected to, produce any significant revenue or have any other accountability mechanisms. At the same time, there is no sustainable way which the DAO has found to replenish BANK back to the treasury. This means that if we were to fund guilds perpetually, we’d need to inflate the BANK token, and without a mechanism to create sustainable buy pressure, pretty soon everyone’s bags will go to zero.

Another challenge we face in the DAO is a system which allows us to determine which guilds are truly needed to unlock our mission and which guilds mission necessity has ceased.

One such attempt at applying guild performance metrics was to evaluate active guild membership - a metric not applied to departments or projects - to take account of their primary educational mandate. The Member based guild funding spec used last season has highlighted some challenges in the way guilds express their active members and the resulting bloat in budget. It’s difficult to establish a blanket metric for active members DAO wide since every guild has different objectives and priorities. Additionally some guilds chose to split into departments AND guilds instead of choosing one of them, avoiding a clear focus.

This post attempts to further build on the intentions of the previous strategy while holding guilds accountable to the mandate as written in the constitution.

Specification:

Rational for Guild funding max allocation:

On average in the last 5 seasons, guilds have received 7.34 M BANK/season

According to the GSE [here], 25% of BANK on average, has been leftover each season. So we suggest that the average maximum guild remuneration be reduced by 25% as compared to S6.

Thus we arrive at max allocation of 5.5M BANK/season for guild funding

General Funding Strategy:

Allocate 5.5M BANK between onboarding, education and community building.

What is the purpose of guilds according to the constitution?

“Guilds are professional associations of subject matter experts focused on onboarding, education, and community building.”

1. Allocate 33.3% guild funding for Education in seasonal guild funding

For the scope of this season we propose allocating 33.3% of the overall available guild funding budget of 5.5 M BANK in equal portion to all guilds who have applied for seasonal funding and evaluate back in S8.

Below are some guiding questions and thoughts for the guilds to structure their education programs for S8

  1. Education on what?

  2. Do we need to hold the same education sessions again and again each season?

  3. Do we need to spend BANK to create education sessions for things which already have tons of resources online? Eg: Coordinape, Gnosis safe, snapshot etc…

  4. What is the qualifying criteria for assessing if a member is educated or not?

Guilds educate members on how to work in banklessDAO and how to forward its mission. At the same time, many DAOs across web3 use similar models on how they work and use similar tools, hence guilds need funds to ensure that members have the necessary skills and knowledge to forward the banklessDAO mission and that the educational session/course pool is up to date

How to potentially measure and fund this?

  1. Measure the number of new members who have passed guild tests on different topics and award guilds a fixed price for each member (guilds can be asked to show on chain proof (such as an Otterspace badge) of the same via an academy course or something on these lines)

  2. Measure the number of new courses or sessions created by each guild and award a fixed price for the same

Disclaimer: The measurement criteria listed above is work in progress and will not affect guild funding for S7. As mentioned earlier the 33.3% guild funding will be equally divided amongst guilds. Meanwhile if you have feedback please add comments below

2. Allocate 33.3% guild funding for Onboarding in seasonal guild funding

According to the constitution, banklessDAO achieves its mission via projects (not via guilds). There is little point onboarding members to the DAO if they ultimately do not contribute to the mission i.e. to projects. Hence, we should measure the success or failure of guilds based on their ability to successfully onboard members onto projects. With this perspective in mind, a member is onboarded truly to banklessDAO when they also are able to contribute to departments or projects and not guilds alone. Hence a part of the guild funding should at least be partly derived from the ability of a guild to fulfil specific talent needs of projects and departments.

How to measure and fund this?

    1. Ask each project and department which guilds they receive talent from in their seasonal forum posts. Each project and department can mention up to 3 guilds
  1. Multiply each mention with a fixed bank multiplier

Formula for BANK multiplier:
33,3% of the earmarked guild funding / (total mentions from all projects and departments) = BANK multiplier

Example on how mentions are calculated:

Bankless Academy Proposal

Top 3 Guilds

  1. Developer Guild, 2. design guild, 3. marketing Guild)

EPA

Top 3 Guilds
1.Writers Guild, 2.Marketing Guild, 3.Design guild

Total mentions:

Marketing Guild X 2 ,Design Guild X 2, Developer Guild X 1, Writers guild x 1
Total mentions: 6

3. Allocate 33.3 % guild funding for active community members in seasonal guild funding

In the previous season, we were able to get a signal on the number of active members in each guild. We want to build on top of this stats calculation exercise for the DAO to be able to generate and foster active community members as being experts in each guild.

Each guild will calculate the active members based on the consensus of this retrospective

How to measure and fund this?

  1. Ask each guild to publish a list of active community members each season

  2. Multiply active community with a fixed bank multiplier

Formula for BANK multiplier:
33.3% of the earmarked guild funding / (sum of active community members) = BANK multiplier

Sample calculations here

Please feel free to fork the table and play with your own numbers and give us feedback

Financial Implications

  1. The max allocation for guilds in seasonal funding will be capped at 5.5M BANK until adjusted by a new forum proposal.

  2. Each project and department mentions max. 3 guilds which guilds they receive talent from in their seasonal forum posts. Multiply each mention with a fixed bank multiplier according to the formula

33,3% of the earmarked guild funding / (total mentions from all projects and departments) = BANK multiplier

  1. Allocate 33,3% of the earmarked guild funding equally between guilds in S7 and evaluate in S8 on better ways to quantify education.

  2. Each guild mentions the number of active community members in their seasonal proposals. Multiply active community members with a fixed BANK multiplier

33,3% of the earmarked guild funding / (sum of active community member) = BANK multiplier

Frequently asked questions?

  1. Can a project/department mention a guild more than once?

No

  1. How do guilds allocate funding internally?

It is up to each guild to decide how they want to structure their affairs internally as long as the structure promotes fulfilling the guild mandate as written in the constitution.

  1. What happens to active members?

Active members is now active community and those calculations will be used to identify the amount of active members in each guild

Next steps:

  1. Collect feedback from the community
  2. Update project, department, guilds proposal template
  3. Define a standard project assessment framework

POLL

VIBE CHECK on the proposal?

  • Yes, LFG
  • Cool, but I have some comments
  • No way!

0 voters

4 Likes

Hi @Jengajojo and @Bananachain - Always admire the deep thought both of you put in such complex proposals. I haven’t voted yet because I feel there is a need for some additional context.

If the trigger for this proposal is “Guilds do not, and have so far not been expected to, produce any significant revenue or have any other accountability mechanisms. At the same time, there is no sustainable way which the DAO has found to replenish BANK back to the treasury. This means that if we were to fund guilds perpetually, we’d need to inflate the BANK token, and without a mechanism to create sustainable buy pressure, pretty soon everyone’s bags will go to zero.” (as outlined above),

the proposal doesn’t suggest any outline plan for Guilds to be revenue generators. If this is passed, the funding levels of Guilds will decline and it will become more stringent. But the “bags will still become zero” eventually (and after a longer time). The challenge we have in bDAO is that most Guilds don’t have an external revenue generating vision or strategy in place.

4 Likes

This may be a good goal for season 8, not 7. We need to focus on documenting how active members are. Once we find consensus on member activity then I think we can focus on purpose drive . (However that doesn’t mean we don’t define our purpose

5 Likes

we haven’t even had any research or dao wide discussion on the membership based guild funding. we have no idea what other guilds are testing and experimenting with. have had no sharing of knowledge across guilds. Seems a bit pre-mature to propose a change when folks have barely adapted to the current change

The retrospective is just a good start of the discussion imo

4 Likes
  1. First point

I’m not sure we fully covered the ‘ability to fulfil their mandate’ by simply looking at member activity.

If the treasure is at risk, then we need to have a more competitive market for the guilds to achieve their mandate and towards that goal ‘pre-funding’ the guilds is a mistake.

We should fund guild that have the projects and the activity to achieve their mandate. Although harsh this will create an competitive economy for projects to answer those mandates.

As it is, the funding slightly shrinks the leakage. We shouldn’t allocate funding unless needed.

  1. Second point

How do we plan to handle a group sybil attack where activity is artificially created by a group in order to drain guild funds?

1 Like

the idea for guilds to generate revenue imo is for guilds to offer the expertise of their members in the form of services to externals, in which case the community building share in this proposal can be 0. We were generally thinking in the same lines as you are but as you can see from the comments, just proposing these changes is already very controversial

1 Like

we have done a retro here Member-Based Guild Funding Retrospective

Sure, but the treasury being at risk seems to me like a DAO-wide existential treat so … we all have to feel a bit of discomfort to recover altitude.

i agree which is why we suggest using 3 criterias

by activity if you mean active members, then we have an otterbadges pilot which can be useful here. additionally, there is a max cap on guild funding which restricts the surface area of exploration. the other option is to continue with the current format of member based funding which has no cap

lots of good ideas, lots of assumptions, lots of false dichotomies, lots of good thought.

overall though very interesting and i do support some type of cap on guild funding that was more equal and standardized as a cost.

3 Likes

totally different view point here but since guilds are professional associations why not let them fend for themselves and provide them with a very minimal budget for Community Building instead of Talent Development. Then create 2 new organizational units for Onboarding and Education? Actually Education Department Exists so why not create an Onboarding Department fund the 2 departments with 1M bank each, and then allow the guilds to share a flat 1/3 of the 5.5M bank for Community Building. If a community would like to work with Edu Department to create education they can, they have a budget, and it is cheaper for them because the Department already has all the tools needed to create the education requested by the Guild Community.

This would reduce the funding even more in a simpler way, and provide the same services expanding on the department model and reducing the number of Component Teams in the DAO. It really makes no sense for 14 different organizational units all individually doing their own onboarding. Having guild focus on community building would provide a service that is done by any other department or project while at the same time reducing the cost of onboarding and adding resources to Education of dao members.

The Guild Communities could still be measured by their interactions with projects and community members.

I read it. Understand most of it. Appreciate the concern and effort but did not vote. The NO WAY seems too firm but very concerned that discussion and understanding of the consequences even those unintended are not oblivious, at least not to me. Major change rarely comfortable but do not feel positive or warm and fuzzy after reading.

1 Like

I voted no. It’s a shame because there is a lot to that we can explore in the ideas, but I don’t think the tactical implementation you have described sets the guilds or bDAO up for success.

First, reducing guild funding 25% based one the GSE post is making a decision based on poor data. There were a number of issues identified in the data, including guild funding cycles not matching up with the hard dates in the pivot table, resulting in some guilds not having spent 100% of their allocation even if they spent the BANK the next day. To take any action based on these numbers would be inadvisable.

Second, you’ve allocated 0% to coordination and administration. Without any funding for coordination, we won’t get qualified guild coordinators. Without money for administration, we won’t get credible accounting, qualified Notion admins, or trustworthy governance.

Third, you’re adding a ton of complication to the seasonal funding process. These rules will have to be learned by guild coordinators (who won’t be getting paid in the new model) and enforced by the Grants Committee. Based upon the last 3 seasonal funding cycles that I was involved in, I don’t think these groups have the capacity to execute on this process.

Have you tested these concepts in small groups? Member-based guild funding was tested in the PM guild for 2 seasons before it was rolled out DAO-wide.

Personally I am not too eager to reduce guild funding in a bear market. If we want to reduce BANK emissions, I think there are other things we could work on first, like reducing dao-wide coordinape or moving projects to ad-how funding instead of seasonal funding.

2 Likes

i generally agree with this, but we thought it would be too drastic of a change in 1 season.

i like the overall idea @ernest_of_gaia i think it would need more than one proposal to implement tho. however i am happy to develop this further with you

Thanks for the feedback.

  1. As compared to S6, the budget is reduced by less than 10% overall. Additionally, most guilds will be leftover with around 25% BANK from the previous season, which gives enough wiggle room imo

  2. It’s not that there is no funding for coordination, the funding is embedded inside this framework. the difference is that i’s not explicit

  3. The guild coordinators only have to submit a list of active members as in the previous season. Everything else is taken care of by the framework.

33% of this framework which is built on member based funding is already tested as you say. 33% of the funding is equally distributed, which means the only experimental part is 33% for project funding, which folks can simulate with the sheet attached.

i agree with both these points, but these are separate proposals. There is no way to prioritise these things in the dao atm.

2 Likes

It’s an excellent proposal. Doable and reasonable. Hail to the team :smiley:

1 Like

Reasonable, good ideas, clear action steps, LFG!

2 Likes

I agree with the sentiment of this proposal. I agree that there needs to be accountability at the guild level to fulfill on the following: “Guilds are professional associations of subject matter experts focused on onboarding, education, and community building.” That, however, feels in conflict with the statement: "Guilds do not, and have so far not been expected to, produce any significant revenue or have any other accountability mechanisms. "

When I think about the PM guild, our job is to fulfill the guild mission above to take cost out of the DAO through PM skills that enable more efficient work. We (PM Guild) are by definition a Cost Center.

There is a model where we flip to a Profit Center if/when we create the kind of educational material that there is a Willingness to Pay for. We just talked to @0xJustice about this last week as we explore Operator School.

I wrote about this a bit here: Starting the Project Management Guild Education and Talent Flywh… — Wage

The other piece it isn’t doing is allowing guilds to solve the “Active Members vs. Active Community” meme above. Again I agree, and we just changed the PM Guild to align our active membership towards value-aligned contributors that add and contribute value back to the guild.

I’m expecting that at the end of the season and into next season, we will cut our average active member total in half. However, it will be a quality vs. quantity play.

4 Likes

I can’t get past this flawed assumption, so I voted against this proposal.

Given that we are probably about to pause or cease use of DAO-wide Coordinape, we should ensure Guilds have adequate funding to attract, retain, and educate members. Reducing funding by an arbitrary number which was calculated using incorrect information is not a good idea.

I also think it’s too soon to throw out the member-based Guild Funding approach that we only just implemented. Let’s work out that shared definition of active membership and go from there.

4 Likes

It is too late in the season to impliment this, I do not want it to pass before getting a chance to actually test Membership Based Guild Funding.

3 Likes