What’s In a Hatch?
Understanding the Initial Phase of the Token Engineering Commons
This piece explains what is involved in a ‘Hatch’, and what initial conditions (both cultural and technical) should be in place for the launch of a resilient Commons ecosystem. These could be considered ‘warm DAOs’ — more than just financial empowerment for a community, they also form templates of online cultural practices to ensure sustainability, drawing inspiration from Ostrom’s principles for the commons.
Healthy Initial Conditions for a Commons
The Token Engineering Commons (TEC) will be the first community to apply the Commons Stack design pattern in a live deployment — what we call a (capital C) Commons. Our plan is to collaborate, learn, and integrate lessons from this deployment back into the Commons Stack library of processes for launching healthy community ecosystems.
The first step for engineering any complex system is a consideration of its initialization conditions — in a Commons, we call these initial conditions the ‘Hatch’.
Hatching the TEC ecosystem will take place in two phases, to allow for sufficient decentralization in decision making, as well as allow time to iterate and test smart contracts to ensure a safe, non-technocratic launch. At a high level, those phases are:
PHASE 1: HatchDAO Configuration. An initial ‘HatchDAO’ will be configured by community members using quadratic voting via TokenLog. The HatchDAO will have basic DAO functionality, akin to a Moloch DAO (but deployed on xDAI via the 1Hive Dandelion Voting framework).
PHASE 2: Commons Upgrade. The HatchDAO will vote to parameterize and ratify the ‘Commons Upgrade’, to build further functionality into the DAO, like an Augmented Bonding Curve economy and Disputable Conviction Voting to allocate community funds. More details on this phase will be explored in an upcoming article.
Why Call it a Hatch?
Why a “Hatch”, instead of a Token Generation Event or ICO? Because new paradigms sometimes require new terminology, to avoid misconceptions and the connotations of old vocabulary. The TEC is experimenting with entirely new ways to foster and nurture community empowerment, different from anything that has been tried before. These new ‘community organisms’ are designed with nature-inspired feedback loops to be autopoietic, able to sense and respond to their environments in regenerative and ecological ways.
The aim is to create a unique blend of conditions that is conducive to the long term health of the Commons ecosystem, which aims first and foremost to support the needs of the community it belongs to. This goes above and beyond ‘normal’ DAOs, to include Ostrom’s commons principles in the nurturing of cultural processes like recognition and monitoring, dispute resolution, and the exclusion of non-philanthropic actors who are acting only for individual benefit, to the detriment of the collective.
This unique combination of conditions creates the possibility for a new form of community infrastructure to flourish. Commons could be considered ‘warm DAOs’ — beyond just financial tools, they offer polycentric governance mechanisms, inclusive cultural practices and other considerations for the needs of the group.
These tools can facilitate purpose-driven communities in their ability to collectively pool and govern shared funds towards projects of mutual benefit. In essence, a new form of collective lifeform is coming into being.
Mechanics of the Hatch
Next, we will discuss the mechanics and token flows in the Hatch, and break down each phase in turn.
Phase 1 : Configuration of the HatchDAO parameters
The primary purpose of this phase is to provide legal and cultural insulation to the Hatch process. While anyone is free to submit a configuration, only community members who have “skin in the game” (i.e. hold CSTK or IH tokens) may participate in decision making. The Trusted Seed ensures that founding members of the community are aligned with the mission of the Commons.
Step 1 — SUBMIT CONFIGURATION: Any community member may submit a parameter configuration proposal via the TEC Hatch Configuration Dashboard and its Github function.
Step 2 — VOTE: All CSTK & Impact Hours token (IHT) holders vote on those configurations, discussed further in the next section of this article.
- Note: Quadratic token voting (using both CSTK and IHT) takes place using TokenLog.
- IHT were/are being issued for time and impact contributed to support the launch of the Commons
Step 3 — LAUNCH HATCHDAO: The community launches and funds the HatchDAO, and all eligible addresses (CSTK holders) can input wrapped xDAI (wxDAI) into the TEC HatchDAO, initializing the DAO pool.
- Note: If the minimum fundraise cap isn’t reached, all funds are returned.
Step 4 — HATCH FUNDING CLOSES: Hatch tokens are issued to wxDAI contributors proportionally. Hatch tokens will be used to vote on HatchDAO decisions, such the Commons Upgrade.
- Note: Impact Hours Tokens are also converted to TECH tokens according to parameters chosen.
What is Being Parameterized in Hatch Phase 1?
Since the Hatch is the first stage of the TEC launch, appropriate components must be configured. The following will be under consideration in this stage:
- Length of hatch
- Min/max acceptable funding amounts (funding caps are critical for safe launches!)
- Hatch tribute
- Membership ratio (how many funds can be sent to the Hatch per CSTK score unit)
- Hatch minting rate (how many tokens minted per funds input)
Reward for Impact Hours holders
- The TEC has issued Impact Hours tokens for everyone who has worked to get the TEC to where it is now
- These tokens will be converted into TECH tokens in the Hatch according to the community voted parameterization
- Quorum requirement
- Support requirement
- Vote duration
- Vote proposal buffer (time that must pass before next vote)
- Tollgate fee (fee required to propose a vote, goes into the funding pool)
To dive further into Hatch Phase 1 parameters, check out these threads on the TEC forum.
After the Hatch is completed, we will dive deeper into configuring other components of the TEC ecosystem, including the Augmented Bonding Curve, Conviction Voting, Celeste, and more. Watch for more information in an upcoming article.
Phase 2 : Commons Upgrade
While we will dive deeper into the details of Phase 2 parameters in an upcoming post, the process involved in the Commons Upgrade is similar to configuring the HatchDAO, however the primary purpose of this phase is to configure the token issuance and proposal funding mechanisms of the Commons economy. This includes voting on parameters for the Augmented Bonding Curve (ABC) and Disputable Conviction Voting.
Step 1 — SUBMIT CONFIGURATION: Similar to Phase 1, anyone can submit parameter configurations via the configuration dashboard.
Step 2 — VOTE: Hatch token holders vote on configurations for the Commons Upgrade, which will be explained further in a subsequent post.
Step 3 — COMMONS UPGRADE: Based on the successful vote, the HatchDAO upgrades to a Commons, including the launch of an Augmented Bonding Curve and Conviction Voting to fund community proposals.
Step 4 — TEC ECONOMY OPENS: Once the Augmented Bonding Curve launches, anyone can enter and exit by buying and/or selling TEC tokens. Anyone can submit a proposal for Token Engineering projects to the Commons, but only TEC token holders can vote on funding allocation using Conviction Voting.
Who Can Participate in the Hatch?
The TEC Legal working group recommended using the Commons Stack Trusted Seed as an initializing community for the safe launch of the TE Commons, and this decision was subsequently ratified by the community. This means that you must earn and maintain a CSTK score to participate safely in the launch of this new form of community organization.
It is worth noting that the launch of the TEC is the first time (that we know of) that a DAO configuration is completely open to the community! The Token Engineering Commons rallies behind the slogan “Your economy, your choice” and has a strong drive to “end the DAO technocracy”, where all important configuration decisions are made by developers without input from the end community.
In this first iteration of the process, governance for all parameters is radically open. Other Commons deployments may decide to apply access control to different layers of parameters to appropriate stakeholder groups, even by reputation or expertise. We aim to continuously improve our collective decision making tools to be able to enable weighted representation in future Commons configurations.
After the Hatch is completed, the community will proceed with next steps towards Phase 2, configuring and voting on the Commons Upgrade. In this next stage, we will look at parameterizing the Augmented Bonding Curve, Disputable Conviction Voting, the Celeste ‘social oracle’, as well as looking down the road at the live deployment of the Token Engineering Commons after all of the proposed upgrades are complete.
How You Can Participate
The Hatch is just around the corner! Submissions for HatchDAO configurations will start up next week, stay in the loop on the TEC channels below. Take part in this new form of purpose-driven collective, focused around advancing Token Engineering public goods for a safer web3 ecosystem.
If you want to be involved in the Hatch of the TE Commons:
📑 1. Apply to be a member of the Trusted Seed: https://commonsstack.org/apply
🌱 2. Activate your TS membership: https://member.commonsstack.foundation/
📞 3. Join the TEC Hatcher AMA to talk with someone from the Hatch Outreach team or reach out anytime on the TEC Discord