The Future of Social Coordination of DAO's by Chandler De Kock | Devcon Bogotá

foreign [Music] hello everyone if you're here I'm introducing him again um but this talk is on the future of social coordination of daos and the talk is being hosted by Chandler decock who does growth strategy at Astoria Chandler focuses on building the future of web3 by solving the problems that matter to people that work in the space every day please welcome Chandler to the stage foreign just a quick shout out before I get into my talk the previous panel that we had before this was uh wipe web 3 adoption in Africa I really loved that topic it was really great um and a shout out to the fellow Africans I held from some from South Africa so that meant a lot to me um so really great to see that uh today's talk um is really just around why do we need doubt um and why why do we need to make them better right many of us here are probably in Dallas and I think we owe it to ourselves to actually make them designed them for humans and kind of create a more uh sustainable system for how dowels work my name is chonda Elite growth at Astoria and today's lesson uh just uh thanks um why the Dow experience sucks today it's a story of uh things that I've been through in the Dow ecosystem um and really the three main topics I want to cover today is just um things around governance incentives and uh the organization around uh thousand as we as we know them today a little bit about what I've been up to I've worked in over 20 000 projects at the moment um I used to help Implement uma's kpi options that'll tie quite heavily into what I will be talking about today I used to work on an optimistic Governor module and help spread awareness around just what optimistic governance is and I've done a ton of research around governance and incentive programs what's up uh we all know what a Dao is I think this group is a little bit more advanced than most of them um but this is kind of like a very tldr version of how I see the life cycle of a dow start right and that was created everyone joins they're excited there's a lot of hype a lot of participation and a lot of contribution um this is actually like most uh the most like formative part of the dial um and then we kind of move over to when Dallas really start to operate right and this is where the Dynamics change a little bit uh different types of incentive structures are at play at different types of contribution levels and skills and then you kind of like get to a point where that I was in like a sort of a heavy medium State and we kind of continue to see dials operate in the space and their life cycle really is captured in this so if it does operating you're in the space but really then it kind of moves over to uh when the Dow explodes and there are many examples of those that will kind of like just touch on very briefly this is where um some incentive Dynamics are at play this is where some of the governance frustrations come into play and then this is also around some of the uh the the concepts around uh like infighting and who has rights in the space and who can contribute and who can participate and some of the reasons why um why does explode really starts around that right so we'll get into some of those in a little bit um but I think the one thing that's um one second um I think the thing that's really important here is the things that don't work right so I spoke about Community contributions and participation and those two things are actually fundamentally different my participation in a Dao is very different to my contribution in a dial and I think the way that dials were structured um at the moment in these big monolithic one token one vote systems don't really work because you're always going to have a sub-optimal level of of contribution why why do I say that right so participation is not the same so when I when I have a token Vote or a token in a in a dial and I can vote on some of the governance actions um I will always give the bare minimum effort that it takes to be considered a contributor for future rewards and future incentive programs and kind of just be known in the ecosystem most organizations actually Thrive and do better by by individuals contributing above and beyond what's expected right like if you think about your job you work for an intrinsic value and an extrinsic value and those values you combine kind of give you what your output is and sometimes you know the jobs that you don't like doing you need some extrinsic motivation and the stuff that you really like doing you can kind of just do for free right um and so con if you think about how down incentive structures are set up at the moment there really is no um way to effectively uh convert people's um lacking lack of willingness to participate um sorry a lack of willingness to contribute on things that they might not be you know so excited about right and if you look at the the vast majority of of how how dow participation work is really around token rewards right not every dollar has this but the majority of the ones that we all know today have like a token reward distribution mechanism that actually just is fundamentally flawed right if you think about taking your token that's that's going to ultimately govern your system and air dropping it put it out for liquidity mining rewards uh rewards maximizing um individuals um they're kind of like just do the very least that they can to get the reward uh ground scraping all of these kind of Concepts provide governance rights to people in the Dow that might not actually be there for the best interest of the doubt and we can kind of see that like the reward mechanism for something like a liquidity mining is is not really tied into the longevity of the doubt why do I say that in kind of the broader concept well like you're just rewarding capital for your Dow and you're paying an extreme cost for that liquidity show your particle needs to function ensure liquidity is King in the in most of the D5 ecosystems But ultimately you're actually giving away governance rights to somebody that's not going to have a long-term aligned incentive with your with your ecosystem okay the things that do work right now most of the the protocols that exist today that are highly successful have this like concept of um insert uh your protocol name labs and that's the foundation that works on the protocol uni swap Labs works on uni swap I used to work at Uma uh we were at Uma risk Labs that helped build up Uma protocol and these are normally highly skilled teams that are well compensated and have both intrinsic and extrinsic motivation right and those kinds of Concepts have been extremely successful at building really highly effective products and protocols how do we translate this into the the dial space is actually going to be an important part of what I want to kind of like get towards um but most of the time relative to the size of dials is that they're small highly motivated teams working on a particular problem right um and if you think about like some of the the dials that set up this whole conference um the shelling Point dial small highly effective team and Community organizations the ethereum foundation again same small small relative to the level of participation um and most of the people that work on on these protocols all these dials or these uh kind of groups are verifiably uh credible so you you know you if I want to work in a developer dial I really need to be able to know how to how to develop so what are some of the lessons I learned um in my time working with all the Dows and kind of uh the figuring out some of the Dynamics on on like what makes somedao successful versus others and I think the one um the one key message that I mentioned a bit earlier is around passing the access to the governance within your ecosystem we do that far too cheaply at the moment we do it for the wrong reasons and we reward the wrong types of behavior and I think there's a very big difference between what is effective for your protocol versus what is effective for your for your governance and your long-term management of your uh of your of your doubt I also fundamentally do believe that um the the kind of examples that we have at the moment I put up here the sushi swap example um that was like the it should be pretty much studied in every Dow business school when we eventually get to the size of the ecosystem for us to have like Dow Business Schools and Sushi swap will most likely be the core fundamental uh case study on what what went wrong and what are the what are the things that we can do better about that and again token reward incentive programs a governance system that was extremely monolithic and the participation in that dial was was the the individuals that had the most context of what they were doing were being stifled by by members of the of the community that really didn't actually have the best kind of input in in that particular topic so the other one is is governance this is not easy I think monolithic does as they exist today are are a huge issue um I don't think we should be getting rid of big monolithic dials uh we'll get into some of the the Dynamics of how I think they can change um but really right now I think they're extremely painful uh context is missing for everyone I think if you have to vote on every single vote you're not going to know everything that you need to do and why this vote is important and kind of like some of the decisions that get made Unchained through governance votes uh are also kind of they don't actually need to do that there's a big difference between uh being able to have like a verifiable trusted execution of a particular outcome versus actually something where you can just kind of agree as long as like you know there's some sort of like soft consensus around something you can kind of move on and I don't think everything needs to be voted on and I think one of the more important elements here is that attention in a Dao especially if you're in many like I've been is a fading acid your token isn't the most valuable uh part of your dial uh the the number of people are not the most important thing in your Dao the attention that you can Garner from people and of particular types of skill sets is the most important um and then I kind of also briefly touch that not everything needs to be a blockchain but like really um there are many elements around like how we can what what gets put towards the vote and gets discussed is sometimes a bit over the top uh bigger is not better size size isn't really that important in terms of dials um if you look at some of the most effective teams I remember how like I drew parallels to like highly effective teams building out something if you look at the size of uni swap their team is famously small yet they're the biggest uh asset swapper in our in the in the D5 space and if you look at some a team like coinbase famously large and they roughly do the same amount of volume sure they've got differentiating products and show you it's not apples for apples here but really the concept here is that bigger doubts are not necessarily better you the more people that you introduce into the dial the more elements of of like having a a a stifling force in your in your dowel and starts to become prevalent and these like mass air drops and these Mass token distributions I kind of just go out willingly they uh they typically kind of like help perpetuate that these large dials um and it's not really designed for humans right we we as individual humans only can have X number of contacts uh between between ourselves right sure you might have 10 000 Twitter followers but you actually only talk to five people on your Discord or five people in your Telegram and then you ignore all the rest of the group chats right so um towers are built by humans and are for humans and we should always kind of keep that as like a core premise of how we design our interactions even in the data space so I've I've had some experience with some tools I'm going to go through three of them um this is just from my point of view on some of the things that worked and what what never worked um so the first one was kpi options from the Uma protocol um what a kpi option was was it basically a conditional payout token where let's say for example I was a a D5 protocol that wanted to get increase my tvl instead of just Distributing liquidity mining Rewards or or doing an airdrop to kind of help promote this you you built in a conditional metric and you gave that token to your community members or the stakeholders that could actually improve that and then depending on how that metric got achieved over a period of time you could get more rewards and you can kind of think of this as a really powerful primitive to to incentivize people kind of in a decentralized way right it was really great for Community compensations because you compensated people for an outcome that you got and so that outcome really really helped um motivate the the each individual kind of on a on an extrinsic level so you kind of gave that reward um for a total outcome token rewards and an outcome based results were really really useful for that so let's say you as a dollar really wanted to get some something done and you would give a reward or a bounty out for it depending on how well that that outcome go how that outcome was achieved you would end up getting a better result and we found this to be quite a powerful like primitive mechanism but then in my experience I found that there were a lot of issues with these conditional tokens firstly in Dows no one actually knows in a doubt what your important most important metrics are and this was the most shocking thing I ever experienced I'd walk up to a team and say hey um they'll come to me and say hey do you want to do kpi options and I say yes great I'm here to help and they would end up our first question I'd ask is what's your most important metric and they're kind of like just stood there and didn't know what exactly how to answer that right and then they were competing discussions amongst team members and so finding a core metric in terms of what you could do in a dial might not necessarily be the most valuable thing for that dial because they there's there's a wide array of things that dogs can Target but really um when when you have too big a Dao or too big a an infrastructure it's really hard to figure out what's that core premise of what that does ultimately um achieving and then on the other side of this is that these kpi options were smart contracts and tokens um there was a lot of effort to put into place for like smaller um smaller incentive programs and in the case of like something like sushi where the the community really mistrusted the team and there was this conflict kpi options made sense there because it was kind of like an on-chain guarantee whereas most dials and most community members really do trust their dial so just saying hey we can do this um and we'll you know give your reward out if we achieve these results is actually something that is a lot more efficient and I think taking that out of the the the the the small contract side and putting it in the in the social layer actually proved to be a little bit more effective um the other topic that I worked on for a while was optimistic governance I call this the lazy Dao's Choice optimistic governance for anyone that doesn't knows most actions of governance get executed by multisigs multi-cigs are a legal liability for the signer and also a security hole and so you what you can then do is instead of actually submitting uh everyone sign that and again attention um attention is the most important thing the the multi-sex sign is ultimately really struggled to um to keep up with uh the context of everything that they're signing right just like every vote you don't have all the contacts every every signature for a multi executor is the same so um what you can then do with an optimistic Governor is basically submit the transactions that would execute on the on the um on the on the wallet and that execution can can be vetoed by someone in an optimistic sense so transactions can be submitted and all you have to do is have one person disagree with it if there's anything wrong right so less votes uh less on-chain actions uh so great idea right there was actually a talk on this stage Yesterday by someone called Isaac that that went into a lot more detail so if you want to know more details of how um how that all plugs in from snave slap to reality.eth and how that process and the configuration of one of these are that's a great idea but really these are extremely um new and untested and one of the biggest issues that you can have is you could actually submit a transaction and if no one is watching steal some funds right remember how I said like attention is the the most important part of of governance even in a in a tool that allows you to uh govern um in a more optimistic sense um there's a security hole there because the security is based on the assumption that everyone is watching these transactions so optimistic governance I think also induces a lot of anxiety for individuals when you as a as an executor execute a transaction on a multi-sake you know when you have to do it you can see that transaction you know nothing's going to happen if you don't do something the dynamic with optimistic governance is flipped around where if you don't look at something something might happen without you you kind of like paying attention and that's hugely scary right you're not going to be sitting here going every single time checking your multi-sig if there's a new proposal for a transaction coming through and so conceptually I think optimistic governance doesn't really sit so well for those that are lacking in attention or super monolithic and maybe they can be a bit more effective at the smaller scale and also a smaller treasury size so um Isaac yesterday I spoke about how he stole 17th ethically he returned it because the safe snap team weren't paying attention right and they even paid attention try to catch him out and so they blocked the transaction he re-initiated and then they forgot to pay attention again and then he ended up draining that small honey pot and so optimistic governance again kind of an interesting Dynamic on on how you can like improve just that monolithic governance size but really the most important thing that I think I I've seen be a lot more effective in my time is this concept of PODS unit to cause there's not a clear vernacular on exactly what we're going to call this but these small highly effective teams that fit together within a larger organization and these effective teams basically uh are are focusing on One Core element right Mega does this in a in their kind of units breakup and that's somewhat have has somewhat been effective and they largely live within the maker ecosystem but if you look at something on how how you can kind of compose these core units into something that's far more effective you can actually start moving your core mini dial or core mini units or pod to other dials right so not only can you live with the dial within isolation you can start having this Hub and spoke mechanism where you get dials within dials and those dials help out other dials and you can kind of see a far more interconnected world the teams are far more efficient and far far more effective because they're smaller they govern themselves they choose the tools that they want to do with and the tooling that exists right now can kind of help in input them into a lot more of the ecosystem they can govern themselves with a choose that to be optimistic or not or if they do it on a contract layer uh with the multi-sig or they just trust someone in intrinsically but we can kind of see that these core units become really really effective and I I'm sure many of you have been to some of the side events that happen um at this conference and many of those side events actually are done by core units and those core units can actually be helpful to other teams so um the one that the one example is that Divinity event last night I went to it for a little bit and they can that team really highly effective can do side events for a bunch of other dials or or projects if they if they so choose Joe highly effective core units that govern themselves uh that fit within a larger organization or can be part of multiple organizations is extremely um far more effective and a better return to scale um and so ultimately what I kind of get towards is what does the future look like with the kind of lessons that I've learned and some of the the things that I've seen so what does the future look like to me um I think any sort of data structure needs three core elements it's incentive it's a an incentive program it's governance and it's organizations you really want a small team of Highly Effective and motivated individuals to work on a particular project or a particular problem that they all agree is is the common goal that they're wanting to work at work on and that the smaller you the smaller your unit or the more effective your unit uh the more the more you can do in a daily basis and the other side of that is you can even have these small units within a larger organization right people naturally like to fit within a small group and that small group can identify as part of a big ecosystem all right and then the other one was being clear on participation versus contribution right I can participate uh in the ethereum ecosystem I can also contribute to the ethereum ecosystem those two things I think are really really really important uh to be to be very clear uh on when when you're kind of working in in a doubt right um I'm part of a many many discords um sometimes it gets a bit noisy and so I don't necessarily contribute to every single one but I do participate in many of them and keep up with the news and as I as a participant in many dials I know what my role would there be is I have a vested interest uh whether it be intrinsic or extrinsic to want to make sure that that dial survives and grows and becomes a vibrant ecosystem within the contribution side should be an active decision from my side to contribute in that space um and I think that right now a lot of people mistrewd being a contributor versus a participant and you get a lot of armchair commentary from participants pretending to be a uh contributors and I feel like that often is quite a stifling force with any sort of like governance issue in action now now being a participant that raises a valid concern and a valid issue is is not kind of the point I'm touching on here um the point is is when a participant that has no understanding of the problem that that the contributors are working on is um is a big issue like I can't tell you how many times you've seen like these long well thought out Forum posts and you just see two three people go no this doesn't make sense to me I don't I don't like it in in Forum posts and that governance happens on on a lot of these foreign posts and that's that's sort of like disheartening to the actual contributors that leads to the inviting and the ultimate explosion of of the dam cool so that's mainly what I want to do and talk about today I have one last shout out um to do not really related to to my talk um but my ex-colleague Clayton at umer sent out the Tweet where he is asking everyone for um for laptops phones you know for everyone that's got that's upset secure that bought a new phone bought a new laptop for for Colombia um you can actually put that to use these are going to um to students for an education path to basically learn have the access to the internet to to kind of just learn and there's going to be web 3 Focus so it's basically onboarding more people in the web 3 for people that are in need he's really collected over 20 devices I think actually I didn't I checked with him yesterday it's closer to 50 at the moment so if you have a new phone um or if you have an old phone or an old laptop or an old iPad any internet connected device um downstairs in the um in The Vibes room with the chair in the music there's a guy there that's called John you can drop your device there um if you do want to still contribute to this and you don't have your device here I also recommend handing it over into someone in Miami they do have an office there so if you're in the US you can also contribute to this and this I think is just a really great way to say thanks to the team in Bogota and and the entire city for hosting us it's been a really exciting experience and I've really loved my time here in Bogota so thank you to Bogota this is a good way I think that you can say thanks to the Colombian people for hosting a really awesome Devcon [Applause] um I've got a bunch of time for questions if you'd like one question one question uh you mentioned uh you know small teams working towards a common goal but I didn't see you talk much about how you come up with that common goal and how all these small teams could agree on that common goal because that's in my experience has been a big problem in a couple dollars where they don't agree on the common goals so then they break apart in their own ways and the arguing starts happening yeah um I think naturally when when like-minded individuals get in a room they're often like oh this is the this is the problem that we're working on this is the kind of solution that we're working on uh let's go do that right like I I'm gonna use the sharing Point example again they're fundamentally there to like help public goods and the the conversation the discourse and the whole like uh Dynamic around public goods funding um and so they they all work towards that common goal right and if you no longer want to work on that common goal you can go in and out to that that was like an organic formation based on people just coming together I think dials that come together that aren't part of a like common goal that just kind of want to you know get get together I think that's more like a social club and so I think I think being intentional about what you want to do with a group of individuals is is multi it's extremely important right because then you can direct your effort you can direct your attention and you can direct your your um your like common Collective outcomes cool thanks guys [Applause]