[SC] Attracting more subDAOs, grants and community participation

The context

I believe API3’s structure of subDAOs and grants is a good approach to scaling DAOs and attracting talent. In the coming years, it will most likely establish some best practices and benchmarks in the larger space of DAOs.

We have seen some early traction and, with a variety of proposals – i.e. the ones from operating teams, special projects like dAPI and partnership with other projects such as Quid. However, predictably, the proposals have mainly been from the people who have a close understanding of the API3 project and the ideas have focused on core development areas.

On the other side, community participation on the forum and for voting has not been high. Perhaps the limited community engagement could be because it has largely been business as usual. As an indicator, top community participation has been on new / evolving areas – dAPI, DAO tracker , Marketing, Exchange listing and liquidity. This low activity also poses the risk of triggering a second loop, where potential external contributors may be less motivated to submit proposals, as they do not see a lot of activity.

To the team’s credit, they have been promoting an open and democratic culture, and encouraging more participation from the community. The project has also gained good visibility in the blockchain space. We are seeing results in terms of partnerships, but not yet in attracting talent.

If DAOs are about the 3 Ps (Purpose, Principles and Process), I am hypothesizing that one thing that could help is further detailing the last part, of process.

My suggestion

I believe it would be helpful to build a basic framework for the different types of proposals + reference checklists. To an external audience, this will reiterate the project’s seriousness in promoting subDAOs. It can also help recognize some of the unique elements of different categories of proposals, and not take a cookie cutter approach to all. The benefit for potential contributors is that they do not need to reinvent the wheel each time, they have a starting point on top of which they can innovate / get creative. This also collectively saves time for the contributors and the community, by helping them focus on value addition.

How this can help

  • Attract talent & promote innovation. Because,
    • Even the smart talent may appreciate pointers in crafting a proposal
    • Contributors need visible assurance that external proposals are given importance
    • Provides some reference points for areas where contributions can be made, as not everyone will necessarily know API3 in depth
  • Support the vision of fractal scaling
    • It may help to showcase the variety of projects. Currently all projects are perhaps seen from the same lens and their uniqueness is not recognized
  • Equitable value distribution between main DAO and the projects
  • Provide an aid for the team & community to evaluate proposals and later review the progress
  • Reinforce API3’s position as a leader in the DAO space

What it should not be

  • Should not be a rigid set of rules
  • Should not stifle creativity / innovation
  • Should not set an expectation that once the items in checklist are addressed, the proposal will be automatically passed. It should be made clear that approval will depend on strength of the proposal and will be approved though voting

What I am proposing

I am sharing my thoughts for inputs from the community. If this is deemed a useful effort, it can be developed as a proposal. I envisage the work will be done in 2 phases

  • Phase 1: Identifying potential categories
  • Phase2: For each category, a customized reference list. This would include items such as –checklist, financial evaluation, quantifying other benefits to API3, approvals required, payments (e.g. upfront / stage gated / lock in / success fees), potential revenue sharing with main DAO, representing API3 interest on partner boards, timeline for discussion and approval, etc

This can be structured as a 2-3 month project and will be an iterative process with community feedback.

The guiding principles will be

  • Maintain API3’s open and democratic nature
  • Strengthen the DAO
  • Not restrict creativity or innovation
  • A framework that can evolve with the project
  • Align with API3’s legal structure

Request everyone to share their views and feedback

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@Ashish - great post. Having the framework and necessary docs in place is a good starting point.

Somewhat hijacking the thread in a slightly different tangent, infrastructure projects are mostly B2B (or B2BC) and due to this, there are so much that the community can contribute at the early stages (unless you’re a dev). Its a biz-to-biz level integrations and partnership discussions, whereas DeFi projects like CRV or LUSD can easily have a community member suggest an integration and yield farming strategies to quickly scale and achieve interoperability. The contrast example is like Pocket (decentralised infra) which we partnered with and has begun the project much earlier than us but if you look at their governance forum, its pretty quite as well. Governance - Pocket Network Forum. Whilst they are a decentralised org, a lot of the initiative have to come from the team and in private discussions first, before the initiative get put into a governance vote. I think this is the reality for us as well given the B2B nature or at least initially until the DAO reaches an inflection point. Until this point, the reality is that the team needs to hire more people to spin off subDAOs e.g. tailored API3 oracle solution on solana/avax/polygon etc (though we are EVM compatible). Expecting someone to magically approach us or use the forum to start a subDAO isn’t realistic at this point in time. This initiative and drive needs to happen internally is my view and slowly transition to the idealistic model as we grow.

Thank you for your encouragement @AP13

Sharing my thoughts on the other points mentioned in your post.

I do not think it needs to be an either / or call between hiring and other forms of engagement, both have their uses. But only using the hiring route could be suboptimal. There are many parallel tracks possible

Working with other projects - Web 3 is composable by nature, even in B2B. Partnership will definitely happen. However, if we can proactively build in a framework for value sharing or aligning objectives, will be beneficial for for API3.

Individual contributors - Some individuals may prefer to engage for projects rather than as full-time employees.

Diverse workstreams are possible - I think we should not dismiss the range of innovation possible, just because we are B2B. We should provide the foundation and see what comes up. And the subDAOs need not be only around dev, we have seen Portal slowly taking shape, as a community hub.

Hiring is the team’s decision. However API3 has chosen a subDAO approach. This can result in overlaps with external teams. The dAPI team started off as a nice collaboration amongst API3 team members and then may add on to an external partnership with Quid.

I do not expect my suggestion to be a panacea or ‘magically’ attract contributors. The team has done a lot heavy lifting already – a beta product, establishing the brand, API3 alliance, etc. This is just a small addition, taking ahead the vision and strategy.

As startups grow, the processes and systems also need to evolve. While there is a lot of literature on it, the Rule of 3 and 10 is a good simple reference. If processes do not enable the strategy, execution can be slow or go off track.

One point of clarification: “hiring” only goes so far as a given DAO Resolution - the decision to grant money to any individual contributor in a team is included in a DAO Proposal, and if there is disagreement with any such grant, it would be fleshed out here in the forum/discord and if necessary, the proposal would be modified accordingly. So while “heads” of given teams receiving DAO grants may choose additional contractors for a given cycle, they are still beholden to DAO vote when the next proposal comes.

Overall, I think more information for prospective contributors/subDAOs is beneficial, though I am having trouble envisioning how something more precise than this post will not result in a de facto pre-set of rules/checklist items. I am certainly willing to change my mind with some concrete examples. To me, a prospective contributor or subDAO would first propose some rough ideas here or in the Discord, flesh out what would be most attractive for it and API3 DAO, then work with feedback and comments to put together the “formal” proposal that is more likely to pass given the social consensus. A more in depth/lengthy/high value proposal may need more formal guidelines, though the co-grant Rust version of Airnode seemed to arise pretty naturally.

So, maybe the Portal DAO proposal (assuming it is forthcoming somewhat soon from your post?) might be a good example of a well-structured proposal with specific deliverables, as a useful precedent from which to build some different examples? In fact, this framework idea seems like it would somewhat fit within the community activation goal of Portal if I understand correctly.

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It should be noted that subDAOs are just one sub-organization structure and primarily useful when the organization comprises a relatively large group of people with the need to create a more granular voting distribution than a regular multisig would enable. For example, this could be the case when setting up a native governance DAO for API3 on a non-Ethereum platform like Solana, or creating a tokenized project on top of API3’s tech, linking the subDAO with a governance token (similarly to how the authoritative API3 DAO is set up).

However, a subDAO is not useful for everything, which is also why it’s not being used as the organization model for any of the current teams. As such, I would suggest adjusting the scope of this to something a bit more holistic and approaching this from a perspective where the challenge is facilitating community participation through increased process clarity in general - not only for subDAOs, but for all sub-organization types. Because individual contributors grow into teams and teams grow into subDAOs - that’s part of the fractalized nature of this all.

I agree with original post in general. I’ll just address a few things in the thread.

the team needs to hire more people to spin off subDAOs

There are two major advantages of fractal scaling for the project itself (at least theoretically):

  • Scales up while keeping the teams small and efficient
  • Captures the entrepreneurial types that are not necessarily looking for a job, but rather to work on their own project under high risk–high reward conditions

If we hire people to spin up a subDAO, we would just be growing our own team and not receiving any of the benefits. You can argue that subDAOs will never take off and we should aspire to do everything ourselves in the first place, but that provably doesn’t work, which is why this was proposed as an alternative in the first place.

I am having trouble envisioning how something more precise than this post 3 will not result in a de facto pre-set of rules/checklist items

If you agree that the fractal scaling Medium post helps people understand that setting up a subDAO is an option and is generally supported by stakeholders, then I think this implies that additional material even simply discussing the subject would be beneficial to an extent.

I would suggest adjusting the scope of this to something a bit more holistic and approaching this from a perspective where the challenge is facilitating community participation through increased process clarity in general - not only for subDAOs, but for all sub-organization types

100% this in my opinion. It is indeed difficult for a subDAO to spontaneously occur, but that’s because a subDAO will probably start as a TG group, than a multisig making a proposal, which will evolve into a subDAO later on. Or it won’t, because what they are doing doesn’t involve on-chain governance. Giving too much importance to subDAOs is misleading.

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I agree with @bbenligiray and @heikki completely here, it’s not just about subDAOs (although I agree they’re more interesting because the idea of them is novel).
Building on the conversation that we had on this a couple of weeks ago, and my inability to communicate my thoughts very well at that point, I’ve come up with a visual analogy to express my thoughts.

Imagine that you chance upon an incomplete puzzle and a bunch of puzzle pieces on the side, as soon as you see these together, it makes sense that they are part of the same thing and that the puzzle pieces will fit somewhere on the board. However, figuring out where each piece fits is both a factor of how well defined the shape of the piece is and also whatever is painted on it. This is also a good analogy for how we generally form concepts i.e. that a concept is usually a bunch of properties (puzzle pieces) that when pieced together form a concept (concept: chair → properties: raised surface, horizontal, has vertical legs for support etc.) I think of the fractal scaling model as a concept that is similarly comprised of multiple small puzzle pieces that will fit together to complete the model, however, as is the case with most of our concepts, I suspect this will also be a continually evolving exercise. In any case, subDAOs, temporary teams, and permanent teams etc. are some of the pieces that will constitute some part of the puzzle, that is clear. Yes, we do not have all the pieces of the puzzle, yes other people down the line will develop these ideas, yes we cannot encompass all the ways that these ideas will evolve. However, the better defined the pieces are, the better everyone involved in the game (now or in the future) is going to be able to use the pieces. The more pieces that are put into the picture, the easier it becomes to add another piece and the clearer it becomes to imagine the completed version (even if there isn’t any completed version). Making sure the pieces (as many of them as possible) are well defined, is as important to the goal of the game, as the game itself, and to an extent, that responsibility is on those inviting others to play the game. If the game (switching metaphors again, huh) seems vague it is difficult to find it inviting, as I’ve found in these past few months.

The approach to describe or express the general idea of fractal scaling at a granular level has to be more holistic and can’t be limited to subDAOs alone, granted subDAOs will have a clearer place in the picture, as the other pieces are better defined.

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All great points made. I do believe that a more general set of process guidelines and some foundational infrastructure around how to participate and make proposals in general is the way to go here. This appears to be the primary focus of what you’re proposing, and the points about making this only about subDAOs have already been made concisely and I agree with those points.

Overall, if we want to encourage people to participate more and to make proposals in general, a set of tools and guidance I think is a fantastic approach. Another thing I’ll add is that giving some process guidance and clarity around when a group starts in TG then evolves to a multisig making a proposal and finally to a subDAO and when that would be relevant could be great guidance for the rest of the community. That evolutionary process spelled out in engagement and process guidance documentation I think could be really useful, outside of the blog post on subDAOs it does seem like clearly spelling out when and if that should happen would add meaningful insight.

Thank you @AP13, @Erich , @Heikki, @Bbenligiray, @Jiyad and @LikeTheJar for your suggestions.

I would have preferred posting individual replies but that would have spammed and been more difficult to follow.

Also, I see a commonality in the suggestions, and agree with them. My 2 key takeaways are, as @Heikki put it succinctly

  • To include all organization sub-types
  • Objective should be to increase process clarity

I believe this can be done through a document with the following sections

  1. Context: How API3 is structured. A brief intro to the DAO approach and fractal scaling. Can also explain the need for the financial arrangement to be in the form of grants, token swaps, etc.

  2. The different types of sub-structures. Listing and explanation of their relevance, depending on the type of engagement

  3. Steps of the process. Engage on TG/ Discord → Sentiment check → Proposal → Approval → Updates

    • There may some variations for different sub-structures
    • Will include expected role of participants :1. Contributors, 2. API3 team, 3. Community
  4. Pointers. E.g. check for dependencies with ongoing projects, quantifying / detailing the deliverable, review frequency, IP ownership of output, payment schedule, value sharing with API3, etc.

  5. Interesting approaches by other projects. E.g. Offer of council membership by Quid. This can be a live section, which is updated as proposals come up with new ideas

  6. Suggested flow / templates for proposal and updates (?)

  7. Resources. Links to whitepaper, forum, relevant medium posts

  8. Should we add a small process to list potential areas for new workstreams ? Can be based on inputs by team and/or polls with community. Can serve as thought triggers for anyone exploring potential areas to work with API3

The guiding principles for the document would be

  • Keep it short
  • Keep it practical and implementation oriented
  • Serve as an enabler, not a straightjacket

I hope this captures the essence of everyone’s suggestions. Do let me know if I have missed the mark or overlooked something.

Regarding the other suggestions in the replies above

@Erich to your points

  • I agree, this post offered a good template. However, as it generally happens, templates evolve once rolled out. You can check it against the dAPI proposal
  • While I have not provided examples, hope this better illustrates what would be done

@Bbenligiray ‘whether a project involves on-chain governance’ is a nice check, will keep it in mind. Will also keep in mind that a balance is shown among the different sub-structures

@Jiyad thank you for the nice analogy

@LikeTheJar thank you for the suggestion on evolutionary process. It will be under #2, hope I have caught the right essence and incorporated it appropriately

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Love this! attracting talent should be a top priority in order the ensure the DAO can thrive for years to come!