Five ways Moloch’s DAO could fix giving.
For those new to the Moloch disrupt, here is the inaugural tweet from SpankChain’s CEO Ameen Soleimani
In order to get my head around it (not being a “dev”), I drew a picture and added it to the open source love in:
Since then Molock has also been discussed in greater depth by
Simon de la Rouviere (@simondlr) who lifted his head out of trying to crack curation markets and bonding curves to write this article:
You should also take the deep dive into the github Readme in order to grasp the DAO concept itself before visiting the ideas that I posit hereunder.
1. Binance
Binance has made much ado about its new Blockchain Charity Foundation (BCF) including announcing it in front of UN dignitaries at the UNCTAD World Investment Forum last November. This followed the FUD quashing announcement that Binance would be donating all listing fees to charity.
What could a Moloch-BCF adaptation look like?
Binancians could send a capped small amount of BNB to the DAO in exchange for votes (submitVoterProposal) and “donations” (listing fees) could be sent to the DAO by Binance in exchange for a different native asset (submitDonorProposal). Each would have a “ragequit” option (Binancians could take back their BNB and Binance could withdraw its charitable “loot”).
By tweaking the DAO’s design to allow vote holders to vote on funding requests, Binancians could be firmly in the decision-making driving seat about how this money was spent democratizing giving and decentralizing charity.
2. Impact investing
Everyone working in development (the “developing world”-type not code) knows that grants will never get us far enough. This sector has, therefore, become fixated on “leveraging private finance” using sparse grant resources. Interestingly, one of the major proponents of this has been public finance (government donors) heralding a proliferation of blended finance funds.
Consider the Binance model “1” above; Moloch could also allow impact investors to deploy capital using the token asset sent by voters (e.g. BNB) as collateral; perhaps this could leverage Dharma Protocol to manage the loan. In this way, we have leveraged private investment capital with a tokenized asset deployed for reasons of voting on how said capital is deployed.
3. Philanthropy
Any tokenized project could deploy a Moloch DAO to contribute to social good. Take a big transaction fee-generating DEX, or any of the hundreds of would be global token issuing decentralized platforms. As these entities head towards full decentralization they could deploy Molochesque DAOs that receive hardcoded allocations of fees or issued tokens. Their token-holding communities would be able to become voters by sending a small fixed amount to the DAO. They would then decide how the money is spent.
What an enhancement this is to today’s measly CSR (corporate social responsibility) departments in the centralized corporate world! Of course, the opposite is true; if all these projects do not do something like this they will just become hyperefficient about neglecting social good altogether.
In the above scenario, the risk of abuse increases because the funds cannot be “ragequit” extractible. But pragmatic solutions are possible. The DAO could have a limited funding proposal cap of, say, $300. If its agreed purpose was, for example, funding wells in villages in Africa then this would be fine. The risk of fraudulent proposals denuding the funds is further mitigated by the need for a sponsor to submit each proposal. These could be people on the ground finding recipients with the greatest bone fides. Imagine this funding mechanism with a two week turn around as compares with today’s business as usual where an “NGO” raises money, pays overheads, sends a white person to manage a “project”, and somewhere way down the road a well gets dug, pictures get taken (cost more than the well) and the insufficient cycle continues.
4. Crowdfunding (and Open Source)
CLR (Capital-constrained Liberal Radicalism) is one of the hottest topics in solving Open Source financing and its tragedy of the commons issues. It comes from Buterin, Zoë Hitzig, and Glen Weyl and basically combines crowdfunding with matched donations. Gitcoin weighted in here:
I don’t see why we cannot reverse the order with the same effect: matched funding first, and crowdfunding next. Actually, I think this might be more effective.
A Moloch DAO could incorporate conditionality that a successfully voted on grant will not be made unless it goes on to raise its quantum through an additional crowdfunding phase. I can’t see this applying so much to grants like the Ethereum Foundation’s recent $5million grant to Parity Technologies, but imagine the effect on traditional smallscale crowdfunding of having proposals first defended by the rigorous multi-stage validation process of a Moloch DAO before asking everyone to chip in so that the grant gets released.
5. ACT
Back in early 2017, ACT was launched with a white paper describing something that Moloch appears to be a manifestation of. ACT’s vision was an unstoppable instrument used by citizens globally to make the State accountable and responsive to their needs. Basically, funding activism. It involved “buying votes” and this aggregated micro-capital becoming an unstoppable driver of change deployed by DAO members without any centralized organization. As climate change bites down and only the power of people rising can drive the necessary change, we are firmly committed to this vision.
Moloch delivers on this substantially, but some combination or iteration on the above ideas might be a killer dApp for us as well as the entire giving / social good sector. I am inclined to agree with Ameen Soleimani:
It only remains to say that these are all just ideas quickly formulated but they do come from 20 months of battling with the underlying issues, coding challenges and design complexity.
Thanks for reading — clap if you think others should see it. Highlight and tweet is also a great tool of Medium- try it!
fraser@act.foundation
