Check out the first post of the Power DAO launch series, to understand the key flaws preventing DAOs from becoming effective decision-makers and valuable product development orgs.
The idea of using blockchain technology to focus the wisdom, capital and labour of a crowd on achieving a single goal is novel, but as we explored in Why DAOs Today Fail, to make DAOs an effective and scalable alternative to centralized organizations, meaningful improvements to on-chain governance are needed.
Rather than copy/paste traditional governance models, the Power DAO framework aims to unlock the next-generation in DAO governance though an innovative model that maximizes decentralization and can be applied not only to blockchain-based systems like DeFi (decentralized finance), but can have a wide range of social, cultural, and political applications.
This decentralization-first governance model is built on three core principles:
- The governance process is integrated with traceable and transparent on-chain KPIs
- KPIs are established and validated by the community that accomplishes them
- Voters are financially rewarded or penalized for decisions and actions that help or harm
Voter accountability comes from clear goals that are set in advance as a part of the governance process. Without clearly defined key performance indicators (KPIs) it is difficult for any individual or community to monitor and decide how successful governance decisions are at achieving a goal — or how to get better at making them as time goes on.
How Does On-Chain KPI Tracking Work?
In the messy world of collective decision-making there will always be disputes and deadlocks.
To address this inevitability, the Power DAO framework is stratified into two layers: 1) a single Mother DAO, which has very little structure and functions as an incubator, angel investor, and arbitration layer, and which can generate 2), an infinite number of Child DAOs, each with unique community-designed architecture and specifications.
Every Child DAO that is initiated and activated will have a community determined hard-coded goal and list of KPIs that define milestones on the way to achieving it. Child DAO members are wholly responsible for KPI tracking, completion, and approval, and the Mother DAO acts as an Executive-Branch-As-A-Service to settle any governance disputes or deadlocks. In addition to arbitrary proposals, the Power DAO framework introduces a unique mechanism for Child DAO users to self-govern called ‘KPI settlement transactions’.
KPI settlement transactions are submitted on-chain for the community to vote and decide if an attempt at completing a KPI was a success or failure. Power DAO also introduces a special role for users willing to take responsibility for the positive or negative outcomes of tracking, completing and submitting attempted KPIs for community approval.
If Child DAO users disagree on whether a KPI has been completed or not, the vote is escalated to the Mother DAO for resolution.
If a KPI is successfully completed, the Child DAO community and KPI submitter are rewarded. If an attempt to complete a KPI is unsuccessful, the community and KPI submitter are penalized.
The Power DAO framework is one of the first attempts to create a governance model that cannot be feasibly realized without decentralized technology, and provides a basic platform for continuous improvement and increasingly intricate model design.
In the next installment of the Power DAO launch series, we will reveal the Power DAO framework in detail and explore the practicalities of how it will work.
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