What is the DAO?
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This article is meant to cover the second of a series of important announcements for September 28th, 29th, and 30th. With a fully revised whitepaper being released on Friday, October 1st.
Decentralized Autonomous Organization (DAO)
What are they?
Ask a group of cryptocurrency experts and you are going to notice that you will get a range of answers as to what they are, what they do, how they work, or just about anything related to them. And none of them will have one single explanation. What everyone will enthusiastically tell you is that they are the future. Naturally, we will begin by defining what our vision of a Decentralized Autonomous Organization is before going into why this will be helpful for Direwolf token or how we intend to implement the entire idea.
DAO essentially means there is a project which has no single point of leadership. Instead, the community leverages their votes for virtually all major decisions. This is a rigid structure and we feel this rigid structure is unlikely to succeed in the long run because some level of centralized leadership will be required for efficiency.
The best examples that show what forms of governance will evolve into over time is to look at governments, corporations, and similar organizations. Most likely what we will see in the long term is DAO governance evolving into a hybrid of all of them, while intertwining technology into the governance models. Each DAO, depending on its purpose, will ultimately be governed, structured, and managed a little bit differently.
The main thing which connects the DAOs of the future together will be the fact that technology will allow for every single holder of a cryptocurrency or token to vote instantaneously and in a secure manner on crucial decisions. The intertwining of blockchain technology deep into every layer of a DAO’s structure will foster a more robust “network effect” for its users by leveraging the immutability of the blockchain that will ensure alignment between all parties.
Cool, so DAO is a project where I get to vote on a bunch of stuff?
Yes, but in a more formalized and structured manner. A system of proposals, checks and balances, operating procedures, and much more is required to organize all of these votes to allow for the organization to actually do useful stuff. Our idea is to not have all the votes only be determined by the quantity of tokens held, but over time find ways to add more complex voting systems for different situations. The community may for instance delegate authority to structures within the DAO to operate with different parameters, where every vote is equally weighted for efficiency and other purposes such as security to prevent voter manipulation. Most DAO’s have every single vote based on the number of tokens that are owned. Meaning the more tokens you hold, the more influence you have in the direction of the DAO.
We hope to innovate with more complex structures where different types of votes will have different methods for counting votes as mentioned above. This includes the use of NFT’s and SFT’s as a means of giving elected positions the ability to have some level of autonomy in some situations to keep projects agile. This is one of the major weaknesses of the current models. A more delicate balance is likely needed where certain votes only require ownership of a minimum number of tokens where each vote is equal, but other votes may take into consideration the total number of tokens owned and give more weight to those people. NFT’s could be issued as temporary super votes for elected officials to remain nimble and not have to have the community vote on every tiny little change or spend of community funds.
Present implementations of Decentralized Autonomous Organizations (DAO’s) are not hardened sufficiently to withstand long-term instability or manipulation without compromising either decentralization or autonomy. DAO’s need to reach an “escape velocity” in terms of autonomy and organization before they are decentralized. This must be achieved by more carefully selecting the votes which are determined by token holdings and strategically including voting where all votes cast are equal (situationally) or supervoting power being elected for limited well-defined purposes. Basically, a more complex and dynamic use of the voting weight is necessary for the long-term success of a DAO.
Additionally, instead of aiming to be decentralized from day 1, a DAO should be launched by a centralized team and transitioned to a fully decentralized organization strategically in phases. As long as the team is determined to give the power to the community in a fair and distributed manner, then the original central team can remain agile enough to launch the project to the necessary “escape velocity”. At which point it will hand leadership to the community, who will have a refined structure and governance model to work within. This will resolve the present dilemma that most DAO’s face, which is having too many hands on the wheel at the same time.
Leveraging a centralized team to architect and launch a DAO will allow Direwolf to strategically use its collective power to meet its long-term objective of continuously adding value for token holders. Upon completion of these objectives, to the extent the project can run autonomously with a sufficiently large treasury, the team takes a passive role by continuing in assisting and growing the initiatives they have launched or are passionate about within the Direwolf ecosystem. Clearing the way for more initiatives and projects to be launched under the Direwolf brand, funded by the treasury that the original team built up for it during the bootstrapping phase. Instead of leaving the project, the original team members continuously contribute to the areas of the project which they remain passionate about.
Direwolf History of Governance
In the past this project has previously had a governance council with well over 30 members at some point. There was a great deal of confusion about who was an actual “team” member and who was a member of that council. That group consisted primarily of large holders of the token.
We now have a core team which is listed on the whitepaper and a few consultants who assist in their areas of expertise when needed, but stay out of the day to day decision making process. The team has chosen to really consolidate its approach until it feels comfortable that this project can operate under an innovative DAO model that it has designed together with the community.
Phased Approach
Phase 1: A voting system is developed and deployed for making a limited amount of votes that impact the future of the project. This phase is to get the community familiar with the platform we develop and actively participate on the voting platform.
The DAO’s architecture, engineering, implementation, and such will require the team to work heavily with the community through a series of votes. Think of this like designing and making a provisional government, but this will not begin for a few months.
As for the current initiatives that are mentioned in the forthcoming Whitepaper and Medium articles, the team will not leverage a community vote to make these important decisions, including spends of marketing and treasury funds. This means that a community vote will not be leveraged for spending over $3500.00 until Phase 1 is complete. This is in an effort to seize on the multiple opportunities presently available to the project. We feel that remaining agile and being able to maintain non-disclosure requirements is crucial for the project to operate effectively in the near term.
This means in the near term the team will operate in a centralized fashion, selectively coming to the community with things to vote on regarding the project’s operational future. It is important to note why the team will not bring every single major decision to the community and will really take control of the project. This is to allow it to rapidly scale, secure more partnerships, and expand the scope of present partnerships.
Phase 2: The voting system the community is familiar with will be used to begin architecting our governance model. This is like designing a government from the ground up and will take time. The team will do everything it can to allow all viewpoints to be heard, but will exert control when there is an impasse. It will attempt to resolve the impasse in a manner whereby the matter can be revisited in the future after the full launch of the DAO and changed if needed when possible. This phase will be a lot of work and require a great deal of help from our community to really design something great.
Initial voting will be weighted based on the amount of tokens held i.e. the more you hold, the greater the impact of your vote. A fully written out and detailed form of token governance will be established through a series of votes over time until the DAO is fully autonomous. We will vote on situations where the community feels that votes should be equal for some situations, and also elect representatives who can work with some level of autonomy to accomplish the DAO’s objectives. We will not vote for specific people in this stage, instead design all the rules, bylaws, covenants, and other similar governance items.
Phase 3: We will vote for the first elected positions to be filled that will work with the team as they slowly delegate control and responsibilities to the DAO. This stage will mark the final stage that completes the full transition to a DAO.
It is important to stress that the team is not abandoning or leaving the project in this phase. Some members of the team could potentially be elected to fill the early positions if required, but this would pose a conflict of interest and should be avoided. Instead, the present core team will focus on leading initiatives within the project they are passionate about and enjoy. The core team members can continue to grow the initiatives listed in the upcoming whitepaper after they hand over control to the DAO.
The measurement of success for the DAO will be determined by the initiatives it launches, their impact on the treasury, total number of holders, community engagement, and growth of image/brand equity.
If all goes as planned, the treasury will enable the project to gather funds in the form of ETH and other cryptocurrencies to be used to incubate further initiatives/projects not envisioned by the team presently. The community has wanted us to do many things, but at the end of that day it all comes down to not having sufficient time and resources to accomplish every single objective. Current and future initiatives will provide a level of utility that fuels our growth long term. Ultimately the DAO’s purpose is to manage those resources and provide oversight to the initiatives under the Direwolf brand.
It is important to note that by collecting these other forms of cryptocurrencies, we are not relying on Direwolf to fund the future utility of the project. We will not be forced to sell large amounts of Direwolf Token to pay developers, advertisers, and others. The treasury should still hold large amounts of Direwolf Token to use for strategic purposes, but by expanding our treasury and not forcing users to pay in Direwolf Token, we would be stabilizing our available resources required for not only marketing, but development costs as well.
With all of that being said, be careful not to limit your perception of a DAO to controlling a treasury. It is ultimately a pooling of diverse resources, such as the collective knowledge and ingenuity of our community to accomplish a common goal, which is to increase the long term value of holding the Direwolf token and the overall sustainability of the project. It is the definition of what a community driven project truly is, as the community will help in determining the future direction.
How long will all of this take to implement?
It is hard to tell and will heavily depend on the community’s involvement and assistance. It could take one year or it could take a few years to fully reach a point where the DAO can run multiple initiatives/projects in parallel, governed by a DAO instead of a centralized team. Each initiative will likely have its own core members that lead the project, but even they are answerable to the DAO’s structure. Essentially, it will take as long as it has to.
Official Direwolf Links:
🌎 Website: https://www.direwolftoken.com/
🔊Discord: https://discord.gg/x9SMH4J8Qk
🗣 Telegram: https://t.me/direwolftoken
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🗒 Medium: https://direwolfpack.medium.com
