ArtSect DAO Governance

The Decentralized Arts Organisation framework

A permissionless effort to produce a vertical Governance framework able to guide ArtSect through the key questions and design choices that are part of the decentralization journey.

The ArtSect Governance framework constitutes the “Social Contract” between members that permissionlessly decide and vote on all IRL/metaverse DAO activities.

The Mission, Intention & Purpose of the ArtSect DAO is the execution of its social contract, where the social contract is a Bill of Rights.

What Structure?

When deciding on what, when, and how the ArtSect core teams can decentralize all the different components of the venture to the community, it is crucial to understand that each element will have its own time frame.

While ArtSect goes through the different phases of Decentralization the core teams might decide to refrain from voting until the community delegates their voting power to them. During this period the focus of the core teams is still to lead ArtSect in every element, including moving the conversations, taking action, and shaping the Governance framework.

How Governance takes place is a particularly important decision for ArtSect because $ARTSECT will not be created with a fixed supply and the number of tokens in circulation is determined by the DAO, ahead of each funding cycle.
This makes $ARTSECT both a reserve coin and a Governance utility token.

Goals of Governance

1. What must to be Decentralized, including but not limited to: Membership types, RWA ownership, Legal structures, Budgets, Grants, Treasury, Risk parameters, $ARTSECT Monetary Policy and even changes to the Governance framework itself.
2. When Decentralization can happen. Define phases/stages/milestones/KPIs.
3. How to decentralize ArtSect will be agreed upon between the core teams and the community. It will reflect the degree of decentralization that the project wishes to achieve in what it decides to decentralize.

Process Stages

User participation is THE elephant in every DAO’s room. People cannot fully engage with what’s going on around all the different activities that ArtSect is involved in and they just want things to get done in a timely manner.

The Governance framework proposed by the ArtSect core teams will consist of multiple working groups promoting a symbiotic relationship between IRL and metaverse community members.

This ArtSect Governance framework will allow the community to move forward fast and decisively while giving at the same time guarantees that each individual has the freedom to express themselves according to their individual needs.

ArtSect Governance will leverage project funding as the preferred mechanism of incentivising community contribution. Instead of simply tapping seed investors/VCs or just mining liquidity, the ArtSect DAO will be “mining” its own biggest collective resources: talent output, risk appetite and social contract. We will from now on refer to this as our Governance Mining.

Using Governance Mining the ArtSect core teams agree to distribute parts of $ARTSECT supply to other teams over a period of time depending on verifiable achieved results. $ARTSECT tokens will be allocated to teams for each budget proposal that is pre-approved by voting of all teams that constitute the ArtSect DAO.

Core teams will still be able to revoke the budget, resources, and asset allocation to the other teams in emergency or pre-longed loss. Teams missing milestones or the expected deliverables will result in bringing core teams to re-evaluate the process and eventually even-stop financing it.

This framework for Governance mining allows management of both risks and opportunities by allowing active community members to permissionlessly collaborate in teams, lead new business opportunities, manage IRL/metaverse DAO activities and get rewards, that take into consideration the scope of the organisation.

ArtSect Governance framework for teams will typically have four or five stages:

• Community discussion
• Community poll
• Off-chain consensus check
• Onchain Governance proposal (if needed)
• Multisig execution (IRL/metaverse)

How to engage and incentivise community participation?

Who can vote

To prevent plutocracy, ArtSect will promote user engagement and participation by requiring all community members to either delegate their votes to teams or to themselves.

Meta-Governance

Another delegation alternative we look to adopt, is through
meta-governance, in which 3rd party DAO guilds or protocols either vote on ArtSect Governance proposals (eg, LexDao or Index Coop) or facilitate a marketplace for borrowing/lending of $ARTSECT voting power (eg, Paladin)

Curation Focused Agency

ArtSect Governance mining proposes four compensation methods for all contributing team members:

• Salary
• Grant
• Bonus (using reputation tools)
• KPI based compensation

The Multisig team

The Multisig team can be seen as the last line of defense of the Governance framework. The Multisig team has the power to retain the execution of decisions made by all other teams until further notice.

The Multisig team’s role is to execute the decisions issued by all the other teams (in their field of action) and also exercise ‘Veto Power’ should the Multisig team feel a decision needs further review.

Although every team has the right to make/propose decisions within their areas of responsibility, the Multisig is tasked with executing the decisions and also holds veto authority if the decision requires further consideration from an ongoing dispute. $ARTSECT holders may delegate this authority to external arbitration or other secure dispute resolution protocols.

By Salome Bernhart & Pedro Unicornio