About Modern Job Trade — Nomad DAO

If you’ve come this far, you’ve been patient. We’ve spent a lot of time describing the inefficiencies in modern job trade and its related consequences, now it’s time to detail out our solution.

Nomad DAO is a decentralized freelance network owned and controlled by its members through a novel governance process. Members are required to commit capital to the network’s treasury in return for equal amounts of two types of tokens:

1. Governance tokens for participation in the governance process
2. Market tradable cash flow tokens securing rights to future dividends from the treasury

The economic game of gaining power and securing dividend rights incentivizes members to increase the value of the network through collaboration, governance participation, and recruitment. Members can sell cash flow tokens, but must burn the same amount of governance tokens to maintain their ratio between power and skin-in-the-game. Through sale of tokens, the network can price the exchange rate between committed capital and governance tokens. A liquid exchange of tokens also sends price signals on available actions that may increase the value of the network — for instance, recruitment of in-demand competence. The members use these price signals to maximize the value of the network they own, be it collaboration in marketing, sales, project delivery, recruitment, document sharing, knowledge transfer, expertise input, in-house development of products, or investment management.

That’s not really clarifying, is it? How does this improve modern job trade? And why blockchain?

Blockchain is the engine of the network — it enables the economic game by facilitating the continuous share issue that ensures the 1:1 ratio between member contribution and network ownership. The rules of the economic game are deployed immutably on-chain and network participants only have three options:

1. Don’t play the game
2. Play the game
3. Propose changes to the game rules through on-chain governance process

The latter is what makes the network decentralized and autonomous — the initial rules of the network can be changed post-launch by the members.

Initial recruitment is critical to the success of the network. The first 5–10 members must have a proven record in freelancing and represent a great variety of competence. This competence will be utilized in growing the network through recruitment. If a future client trusts the initial members, skin-in-the-game recruitment would work as a vouch for the remaining ones.

A member journey might look something like this:

1. An existing member proposes your membership through the governance process
2. You deliver a CV and complete competence interviews with one or more members of the network
3. A significant majority of the network approves your membership
4. You commit 5% (decided by the network) of your next client contract to the network’s treasury and receive minted governance and cash flow tokens in return (causing inflation and adjustment of power distribution).
5. You utilize the network’s internal market (resources, expertise, financial services, knowledge sharing, marketing, sales) through an interface communicating with deployed smart contracts (facilitating trustless collaboration)
6. You participate in the network’s governance process (recruitment, treasury management, network parameters, etc.), weighting your votes according to your relative share of governance tokens. (if governance is boring, you can delegate your tokens to a member you trust)
7. You sell or buy cash flow tokens on the open market (selling X cash flow tokens requires burning X governance tokens)

Wait, commit 5% of my salary to a treasury? Isn’t this just a new third-party in disguise? No — the money is still yours, it is just made available for the entire network to manage. Why would you let some strangers manage your money? First of all, some of the products and services of the internal market are free for you to utilize — sales, marketing, business administration come with an alternative cost (third-parties, never forget), others are not even available outside full time employment — access to international expertise, volume of resources, financial services and an incubator environment. Second, they’re not strangers, they’re the result of a picky recruitment process. Also, their money is in the same pot — you have a common goal — maximizing the value of your network.

In the early stages of the network, the treasury will fund further development of the network’s products and services. Who decides what to develop? The network. Who is responsible for development? Members, receiving payment from the treasury. This could serve as a hedge on bear markets — no clients to serve? Serve the network (and get paid). In a mature stage, the treasury may contain free capital that is invested externally or internally (we’ll discuss Nomad’s potential as an incubator in a later post).

Where will it end up? No one really knows. We’re building a snowball and pushing it down a mountainside. We can only decide the initial size, the steepness of the hill, and the force of the push, but the rest is up to the network — it’s a decentralized entity in control of its own future. Does it grow randomly? No, the members try to maximize the value, listening to the price signals of the market. Where does it end up? Let’s find out! All we know is that even the smallest motion can bring down a mountain.

References
Nomad Labs, Whitepaper