DAO Debt: Do we need a social consensus?

UPDATE: As of this morning (assuming those proposals that were boosted, and have majority yes vote will pass) and considering a couple of still unredeemed proposals, Genesis is in debt by

ETH -76.77
DAI -26951

Pasting one of my comments to the proposal here!

Just to be clear, I completely support the development of the mobile app and love the work Mark Pereira has been doing for the Genesis ecosystem.

The reason for downvoting is the lack of consideration for the financial situation of Genesis, which negatively impacts all other proposers.

According to my calculations, this proposal will put us into debt until ATLEAST LATE JANUARY 2020.
Debt if passes = 2k DAI (ape-unit) + 65 ETH (dOrg) + 34 ETH + 20K DAI = 100 ETH + 22k DAI

(EDIT: Just saw Kate’s comment and it turns out it’s even worse…)

Dec 16th payment: 20k DAI <- This means either Ape-unit gets paid and Mark can’t redeem or Mark redeem and the DAO is completely broke for 2 full weeks and Ape Unit can’t redeem
Dec 30th payment: ~9k DAI + ~50ETH (if we go ahead with including DAI in the financials) <- Mark would now redeem his proposal leaving the DAO with just 9k DAI for another 2 weeks
Jan 6th payment: ~9k DAI + ~50ETH <- The DAO will have to sell some of the DAI in order to be able to pay out dOrg which results in Genesis again having only 7k DAI to spend for 2 weeks.
!! Around this time dOrg will likely submit another monthly payment proposal, which would put us into debt again…

Jan 20th payment: This could be the first debt-free payment we receive, however, if dOrg submits another 15k proposal mid-January Genesis would only have 5k DAI to left for this period.

We’re all responsible for the financial situation of the Genesis as should take this responsibility seriously!

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We should also talk about accountability and methodology. A large tech development proposal should minimally have at least an outline of design, scope and deliverable, not just a two sentence summary. We need to understand screens, integrations, deferred items, etc.

I’m not talking about any proposal in particular. It’s more a question of a general practice.

Agree with Pat, it means we need to prioritize fund raising of the DAO and by doing that shape the value proposition to match the sort of proposals we want to see funded. The challenge will be communicating a coherent mission and culture that entices diverse yet satisfyingly productive participation. For that matter the fundraising efforts must include diverse representation.

The DAO debt is actually a sign of progress toward maturity that says the DAO has found a list of project it is interested in seeing developed rather than waiting for proposals that get submitted just because there is budget that can be deployed.

Essentially now the competition on resources is harder and that should result in higher quality of projects funding. Overtime some projects would graduate being funded by the DAO as they’ll want more operational independence. We should find a way to foster long term mutual benefit with projects that were considerably incubated in GenDAO (e.g. Alice, DAOfest, dHack). I’m thinking we should have GenDAO ecosystem incubator and the leaders from dOrg, Alice ETC can be mentors for new DAO participants for example, but these are ideas for after we figured fund raising :slight_smile:

To sum up, the things that need to happen IMO:

  • Fund raising committe with diverse representation should be set up
  • Value proposition for 3rd party funding of GenDAO
  • Build a mechanism to foster long term connections between GenDAO and affiliated projects for nurturing and mutual benefits.

I won’t be able to join the upcoming pollinators call (:cn::airplane::new_zealand:), but, would be interested to work on that with interested parties. We’re already discussing some of it for dHack with @Eylon and @eric.arsenault. Worth starting it’s own thread probably.

Cheers :purple_heart:

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This cannot be overemphasized.

I wholeheartedly believe there’s funding sources available for the DAO, as well as funding pathways, such as:

  • VC/Fund – sale of locked GEN
  • Grants – governmental, NGO (e.g. this governance study being commissioned by the EU could totally be a Genesis project)
  • Other Ethereum orgs – can we grow the DAO’s membership and swap locked GEN for funding?
  • Applications – could we accept management of an app’s smart contracts in order to decentralize as a service provider?

etc…

This is a bold experiment with much to do and a network to do it. Look at Decred, DASH, etc… the DAO “community treasury” model has been proven with much less effective tooling. I fully believe we can do the same with the right backers.

Let’s go whale hunting, folks :whale::bow_and_arrow:

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I think incubating DAO projects should be the number 1 priority of Genesis. I would love to help make this happen!

As per the Genesis Budget Management proposal, Genesis agreed to 4 key budgetary buckets

  • Product and Tech ( 70% funding ~ $28k)
  • Research ( 10% funding ~ $4k)
  • Ecosystem ( 15% funding ~ $6k)
  • Other ( 5% funding ~ $2k)

But the Actual Budget in Nov was:

  • Product and Tech ( 59% funding ~ $23.2k)
    • Signal Scheme “Curation of the DAO Header”
    • dOrg Recurring Proposal - November (2/6)
  • Research ( 6.5% funding ~ $2.6k)
    • DAO Legal blog posts proposal
    • Extra work: DAO Landscape research
  • Ecosystem ( 44% funding ~ $17.5k)
    • DAO Meetup in Barcelona (Nov 2019)
    • !! Create alternative onboarding methods !!
    • DAO #Blockathon China Funding Request
    • Completion Reward Proposal: Onboarding Onboarding Report
    • Bootstrap Funding for the FestDAO
    • Funding for Felipe’s FestDAO extra efforts

While the Ecosystem bucket includes activities such as brand awareness, Explaining the concept of DAOs, help onboard developers,on boarding documentation, education, marketing, developer events. In practice we have spent the 20% of Nov funding just on FestDAO. Then, over-run the Ecosystem budget by another 24% ~$9k in funding other DAO meetup and the on-boarding guide work.

Firstly, it is important that Genesis community respect the ‘soft-governance’ proposal passed earlier and in order to catch up with the DAO debt if we have to be selective on proposal then we should down-vote the upcoming fest DAO funding rather than the dev work (Alchemy Moon).

Secondly, it is important to understand that a lot of Dev proposals by default are of higher cost given the time commitment and expertise required and the value offered by work i.e. an app once developed will be used for months by various users vs an event. It is also necessary to note that while it is easy to split Ecosystem proposals by asking funding for each meetup individually, it might not make sense to the same for various development work eg. Once Mark starts working on Alchemy Moon it is all or nothing … A half finished app won’t provide any value.

Lastly, I want to bring attention to the requirement for having reputation cap. In Alchemy Moon proposal we saw how 13 votes (which had some members with pretty high rep) were about able to switch the result against the other 20.

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Your numbers add up to 110% (fyi)

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They do … that’s why the DAO was in debt

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How much GEN does the DAO currently control?
How much total GEN exists right now?
Will it get more GEN from some source (on some schedule)?

How many people/organizations have expressed interest in participating in a GEN auction (what is the perceived demand)?
What would a GEN auction look like? 10,000 GEN? 100,000 GEN? 1,000,000 GEN?

And also they pertain to proposals created BEFORE any consensus was even proposed.

@Kate @papa_raw @Lior … any input on these questions?

How much GEN does the DAO currently control?

None (beside small funds converted to GEN as part of the monthly funding

How much total GEN exists right now?

60M

Will it get more GEN from some source (on some schedule)?

The goal is for Genesis to control the entire treasury of the un-minted GEN tokens (40M). this will probably be a gradual process to ensure the DAO is responsible and can manage these fund in a way that serves the interests of the project; and we try together with Genesis members to design what needs to happen in order to make the DAO as such

How many people/organizations have expressed interest in participating in a GEN auction (what is the perceived demand)?
What would a GEN auction look like? 10,000 GEN? 100,000 GEN? 1,000,000 GEN?

There is no GEN auction. can you explain what you mean ?

I mean if you want to run an auction, you should probably know that there are actual buyers who are interested first. Has anyone, ever, shown interest in actually participating in the proposed “GEN auctions”? How do you determine the proper amount to sell at any given time?

Also - you mention 40M unminted GEN that Genesis may ultimately control. Who currently “controls” that? I don’t understand the details of “unminted” and “control”.

Can you please refer me to the “GEN auction” you refer to ?

@Kate mentions it here https://t.me/c/1171640707/18120

Maybe i misunderstand, but it seemed like there would be a GEN sale for locking (pre-locked?) to raise money and distribute REP to participants. This was described as an “auction”…

Yes, you probably misunderstood. there is NO GEN AUCTION. GEN is not sold/auctioned
The auction discussed is for REP, and the new mechanism described is in the same concept of what dXDAO did when they first distribute the REP when the DAO was created, and the same one NecDAO is currently doing.

The idea is for people with long term interest in growing the GEN economy (= growing the DAOstack ecosystem), will lock their GEN and will receive reputation in Genesis. This is done via an auction mechanism so the amount of REP is dependent on the overall staked GEN and the total allocated REP. Those who lock GEN are expected to contribute to Genesis by doing work, contributing via discussion and guidance and help develop the tools and use cases that will help the ecosystem to grow.

Kate and Ezra wrote about this in more details, i suggest going over that again now the no GEN auction is clarified , i guess the context and rational will be clearer

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Ah yes, you are correct.

When @papa_raw was saying “hey we could sell GEN to get us out of debt”

And @Kate said in her Medium article: that money could be made (in the form of) DAI or ETH from the sale of LGN (aka Locked GEN)

And I saw discussions of a new REP distribution scheme based around locking GEN

And @Kate mentioned “auctions” but meant "awarding REP for locking your GEN (? weird use of the term)

I thought that meant “we will auction locked tokens from our 40M treasury to generate revenue and distribute REP”

I’m going to hop onto Ivan’s comments here.

Seeing the parallels between the method by which GenDAO has proposed a GEN locking mechanism intended to enable greater GenDAO accessibility and participation — and the method by which GenDAO seeks to jumpstart the GEN Economy with a runaway train of spending…I must ask why the latter is omitted in conversations of the former?

It seems to me that we are sacrificing optimal design and structure of the onboarding and participation processes in exchange for the ability to implement a new method of fundraising (minimum GEN-locking <> LGN sales).

I honestly don’t mind the method of fundraising, but I do mind the fact that it seems to be shrouded beneath a proposed feature with a completely separate intended purpose. By locking GEN, I’m basically giving an interest-free loan to the project in exchange for Reputation (of which I also think is unfairly distributed).

Emerging from traveling and working on China initiatives. Coming back to the two ‘sustainability’ approaches quoted here:

  1. Fund Raising for GenDAO

For us to pursue this path, which I think is essential and attractive, we should transform quite radically into a different Genesis (is it Genesis 1.0? I think it’s a MUCH BIGGER change than what we’ve discussed in calls and forums so far), a much more mature DAO participation structure. e.g. collaborative and accountable pollinator committees that together run the DAO-ops:

  • Fund raising pollinator committee - raising capital is often done in a fairly intimate high trust fashion and fund raising supportive conditions are relying mostly on non scalable social relationships.
  • Grant Pollinator Committee - Sourcing grants notoriously take a lot of time and often times past experience can be crucial for informed assessment.
  • (minimal) Accountability task force - This must be kept to minimum, but has to be there nevertheless.
  • Diverse and representative comms team - Would be important to include non DAOstack employee members too.
  • Onboarding and Happiness team - GenDAO equivalent to something between sales to IT support teams. Can’t overemphasize how crucial this is for GenDAO culture configuration, onboarding is one of the most important aspects of user journey.

This is a general idea for the structure, in practice Genesis 1.0 committees will likely look different.

Those teams/tracks should all be accounted for and accountable for in the DAO budgeting processes. Designating those community roles and responsibilities and in parallel allow spontaneous things to emerge (to a certain extent) will up the level of activity and output of GenDAO. In turn it will make the task of fund raising slightly easier for the Fund Raising pollinator committee as they’ll have simpler way to communicate a value proposition for respective funding sources.
Other pollinator teams will benefit by getting more clarity when following up and executing the operations that deliver desired outcome and create shared positive ROI for DAOists and those who fund GenDAO.

Now, I know it may sound like a ‘firm’ rather than a ‘DAO’, but it really doesn’t have to be a firm, it’s up to us to create the symphony that is GenDAOs vivid culture that will then echo through each and every GenDAO member’s personal impact.
I believe in the goodness of people to show up with honesty and responsibility to deliver and work for the betterment of the collective, but structure put in place can provide healthy framework to achieve it and serve for the right amount of peer pressure in a chaotic environment + it can help attract good future contributors too :wink:

  1. Creating support framework for GenDAO incubated projects (cc @liviade)

The assumption we’re making is that investing and incubating teams is a line of activities that we’re interested to run inside GenDAO. This is super important for GenDAO to start gaining equity + REP in initiatives that are funded by GenDAO, for that to happen, there are some needs to be met before starting:

  • Clarifying the legal framework (or lack of it ?) such that risk to members and contributors is minimized or completely removed.
  • Be a lot more ruthless and narrow down the focus and work with only handful of teams that has the highest potential to achieve exponential things on a global scale.
  • Form a reliable and well funded pollinator team to realize this.
  • How is GenDAO in general and the Incubation team in particular get rewarded from ventures it’s members support (in traditional professional terms: how is carry / management fees divided and distributes?)
    We’re working on a basic version for it with LongDAO(龙DAO).
  • Define thesis for the incubator and stick by it to a fair extent such that it’ll be possible to communicate and incubate with proper financial funding sources.

To summarize, we need to switch fast and steward a structure and culture of accountable and pro-active self-leadership, IMO it’s URGENT because the alternative of not leveling up the participation structure can be a major inhibitor to the greater DAOstack ecosystem.

HNY!

Daniel

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