Distributed Responsibility

DeFIRE Roadmap Series: DAO 2.0 Explained

Learning From the Past

The only way to transition from the boom and bust cycles of past DeFi seasons is to build transparency and trust into the core of a protocol’s operations.

In DeFIRE, we are not just paying lip service to the popular concept of community-controlled DAO governance. We have developed a detailed plan for a highly effective and productive organisation that will be instrumental in carrying out our longer term vision for the future of decentralised finance.

Fundamentally, these supposedly decentralised and not so autonomous organisations did not communicate or act on behalf of their investors as their white papers suggested they would.

We’ve thought about this ever since we decided to build this project, and now we’d like to detail the ways in which DeFIRE can create a better DeFi ecosystem through transparent and community-run governance that protects your long-term investments.

What is a DAO?

DAO stands for Decentralised Autonomous Organisation. If you test most protocols with DAO in their name, they fail on the first word because, contrary to what they claim, they are not decentralised.

With few exceptions, existing DAO’s centralise authority around the founding team. The founding team controls what goes to a vote. The founding team decides if community contributors are paid. The founding team controls the treasury.

At the end of the day, the reality is that the founding teams of these protocols can do whatever they want. Unfortunately, in some cases, this includes negligence and mismanaging investors’ money.

What if there was a protocol that operated as a true DAO from its very inception? And what if the founding team saw themselves not as owners of a project, but as a set of training wheels guiding the project through its early growth, seeing it safely to a point at which the organisation matures into sustainable, true autonomy?

In the DeFIRE protocol ecosystem you, the investor, will ultimately be the one in charge.

How DeFIRE is Different: DAO 2.0

DeFIRE is building a DAO 2.0. The founders are shaping and directing the early growth stage of the project, but then the rest of it is up to the investors as a community. And the improvements of DAO 2.0 to the old model will be integral to the success of the project as a whole.

Source: This excellent article written by Nichanan Kesonpat.

DAO 1.0 — Founders run everything and dictate tasks to individuals. Some of these individuals are paid. Some are not.

DAO 2.0 — The DAO runs everything. Contributors self-organise into teams of working units to accomplish tasks in a specific domain. These tasks are then reviewed by team leaders in their respective areas of expertise. And finally, the work is paid for out of the DAO based upon the difficulty of the work completed.

So essentially, you work to make the community better, and you’re fairly compensated with tokens, which can then be sold or reinvested in the DeFIRE protocols.

The Importance of DAO 2.0

As our name suggests, we believe the F.I.R.E. investment philosophy should be applicable to DeFi. Our financial products will allow investors to not only catch a great deal early on, but to continue to find value and build a fully risk-diversified portfolio of assets.

We must not only transition from the power structures of traditional finance, but also avoid repeating the mistakes of DAO 1.0 protocols. Without a truly decentralised, efficient, and transparent governance structure, diamond handing and hodling are merely memes. Decentralisation is crucial for transferring power from the founding team to the community.

If community members are asking, “Can devs do something?” then the DAO is still too centralised.

DeFIRE will adhere to these organising pillars:

  • Transparent guidelines for how community contributors are compensated.
  • Contributors work in autonomous groups (core units) so the founding team isn’t a bottleneck.
  • Continuous feedback loop between contributors and token holders.

It Takes a Village

Cliches are cliches for a reason, and it is true that this project will ultimately be a community of investors. The DAO organisational chart we are building from allows for a substantial body of contributors.

Source: This excellent article written by Nichanan Kesonpat.

Beyond potentially benefiting financially from the value creation of the protocol itself, our contributors can count on a clearly laid out means of compensation. In fact, it’s already been drafted and will be subject to approval by the DAO upon formation. Transparent compensation is necessary, so every contributor can assess their potential compensation before they ever take on a project.

A team of DeFIRE contributors will be dedicated just to onboarding talent, assessing skill sets, and rewarding contributors. For every work stream there will be a separate working group, and for every working group there will be a team lead.

Eventually, the founding team will merge into leadership roles within the autonomous structure of the DAO, each to their respective areas of expertise, and work in parallel with the team leads in other areas of operation who started as contributors.

Our contributing team structure is part of our value proposition, so it only makes sense that this value be shared as financial compensation proportionally to each contributor’s efforts.

Have you always wanted to work on a crypto project? Do you want to have a direct impact on your own financial future? You can join us and help us build a better, more transparent, and trustworthy means to financial independence. This is what DeFIRE is all about.

What’s Next?

Our project is going to expand to have something new and rewarding for every type of investor. If you’re an experienced crypto nerd, you’ll have a home here. If you’re brand new to crypto, welcome to the community. If you want to diversify your portfolio, you can put your money to work and rest assured that constant communication about your investment will be available through a network of team members who are investors as well.

And for those who are beginning their journey and just learned how to transfer Layer 1 tokens to their wallet from a centralised exchange, we’ll be working on a long-term project called DeFIRE Academy to help with onboarding and continuing education.

Drawing from the best resources in DeFi education and the brightest minds in DeFi entertainment and social media, the DeFIRE Academy will be collecting resources for an educational consortium, which is a severely underdeveloped space in the DeFi community.

Education for all investors, and especially those who have never explored outside the familiar confines of traditional finance will be crucial to delivering on our roadmap. Be on the lookout for more about this in the next part of this series.

We firmly believe that the transparency and trust built through the DAO 2.0 governance model, in tandem with the permissionless and accessible nature of DeFi, can create the right environment for ever-increasing adoption rates in new, untapped communities of investors everywhere. If you like what you’ve heard, please join us on this journey as we strive to make financial independence open and accessible for all.

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