Different ways to distribute Reputation in a new DAO

*NOTICE: I’VE WRITTEN AN UPDATED POST ABOUT THIS TOPIC HERE.

With a handful of DAOs launched on Alchemy and many more on the way, I thought I’d compile a list of the different ways a DAO can initialize its Reputation distribution.

This will be a list of practices that we’ve already seen happen plus some other ideas I personally think would be interesting to explore. Without further ado:

1 - The founders directly choose who receives Reputation

This is the most straightforward way to do it, it’s like hard coding the distribution. Don’t get me wrong, the founders always choose how Reputation is distributed initially, the key word here is “directly”. This means that the founders collect the specific ETH addresses of the DAO’s future Reputation holders and assign some Reputation score to each holder.

This is how the Genesis Alpha DAO was initialized back in June 2018, with the initial group of Reputation holders being a mix of DAOstack staff and Pollinators.

2 - Have token, will get Reputation

Hodling a project’s tokens is one of the most practical ways to prove one’s belief in that project. As such, newly founded DAOs can choose to proportionally distribute Reputation to their token holders.

An example of this is happening right now with PolkaDAO, where 80% of the DAO’s Reputation will go to DOT holders. An interesting nuance to this is that only those who manually claim their Reputation will actually receive it, in order to prevent “dead” Reputation from being distributed.

3 - Token locking

I see this a step beyond simply holding tokens. Reputation can be programmed to be distributed to those who lock a specific token in a smart contract. The amount of Reputation they receive can be a function of the value of the tokens they’re locking and for how long. Typically, someone who locks a lot of tokens for longer will receive more Reputation.

For example, in the dxDAO, you may receive Reputation by locking any amount of the DutchX whitelisted tokens (GEN, among others).

4 - Completing bounties or contributing to the DAO

Another way of proving one’s belief in a project is to make non monetary contributions to the DAO by doing real work. Then, not unlike a bounty program, Reputation will be distributed to the contributors.

This method is of course very difficult to implement and needs a centralized body to assess the contributions, but I still think it’s a viable option and especially relevant for non-profit or similar projects.

5 - Sortition

For me, the purest (but not necessarily the most efficient) form of democracy is sortition. Simply put, a sortition-based governance model would distribute reputation completely randomly among a group of people, like a lottery.

While this is not implemented yet, I see it being used in small, niche projects or DAOs that involve local communities where this is most practical.

Fun fact: The ancient Athenians used sortition as a way to select political officials in the 6th century BC and after. They considered sortition to be a democratic process because it was random and elections to be an oligarchic process because a rich man could buy his way into power. Ahead of their time, weren’t they?

6 - Distributing Reputation through a DAICO

DAICO is a fundraising model for ICOs that want to decentralize control over the funds they receive and possibly implement a continuous funding model and a smart contract based refund policy.

While this hasn’t yet happened for DAOs powered by DAOstack, I see it as a very viable option for projects that want to raise funds and give voting power directly back to the contributors.

I’m coining the term DAICRO: Decentralized Autonomous Initial Coin & Reputation Offering.


I’m sure there are a lot more ways to distribute reputation which I missed, so I invite you to write any others below and let’s create a complete list together!

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Thank you @Stratis for this. Really helpful. A few comments/questions…

On #4 above re completing bounties… you wrote that it “needs a centralized body to assess.” My question: is there a way to use holographic consensus and GEN incentives to summon a group of “QA” ppl to assess whether in fact a task/bounty had been completed? This removes the centralization risk, increases participation possibly, and increases throughput b/c of bottlenecks.

On #5. Love the part on sortition (and the Athenian reference). I’m sure you saw this, but just in case, there’s a great TED talk on sortition. I blogged about it (and DAOstack) here

ON #6, I had just finished the Aragon post re: DAICO when I read this, so it was timely for me. A couple of comments.

  • does DAOstack/GENDao have any capability like the one Aragon describes? Either now or in the near future?

  • is there a blog post somewhere (I am sure there is) that explains why Rep matters more than Stake? It seems to me that a part of the decision process for would-be DAOs is understanding this key difference and how it could impact them (either way) down the road.

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Hey Jeremy,

Regarding (4):

Yes, I think this is possible. I’ve actually pondered what this sort of specification would look like. Let me give an example:

Let’s say for instance you have a scheme for proposals that mirrors the Contribution Reward scheme, but is limited to only paying out 10 DAI. Let’s call this scheme “Tweet Validation.” Since within the Genesis protocol, there is an incentive for the GPN to stake on proposals with a given DAOstake (the automatic downstake), there would always be an incentive for the GPN to curate. Now, the only proposal that happens in the Tweet Validation scheme is exactly as it sounds: the DAO validates that a person Tweeted something that aligns with some pre-conceived objective of the DAO, or delivers certain results the DAO is looking for.

Regarding (6):

Yes, dOrg is currently building a similar fundraising module and it will be made available to DAOs powered by DAOstack. Perhaps @orishim can chime in here on what that will look like.

Aarrghh…you are right. I did see that in @orishim’s deck. My apologies. Still, interested to learn more as I think the DMO could benefit from this, particularly if it supports multi-collateral assets.

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