Decentraland DAO Community Pulse: January 2023

The Decentraland DAO Community Pulse is a monthly publication written by the DAO Facilitation Team spotlighting community content creators and diving deep into active governance issues.

Creator Spotlight: Bay Backner & Serena Elis

Welcome to the 4th edition of our Creator Series! Join us as we feature Decentraland DAO grantees: showcasing their journey — from concept inception to making their projects a reality!

This month we interviewed: Bay Backner ****from Vueltta and Serena Elis from ****Entertainment and Women Empowerment. Our conversation with Bay and Serena covered a wide range of topics including, their rabbit hole journey into Decentraland, project overview, proposal writing process, collaborations, future projects plans and finished out with a discussion around confidence and mindset in this space.

My experience with the grants program, has been phenomenal. The fact that a platform like Decentraland wants to support, visionaries, creators, and talented individuals gives me great hope for our future. We need artists to share their gifts with the world, as creativity brings new life and energy which creates transformation and change. This has given me so much hope, relief that I am part of DCL, and they want to see artist like me succeed. This goes beyond a dollar amount, the impact it will have on how we produce content will be fruitful, and I am so grateful I get to be apart of this amazing experience. Decentraland DAO can be a great example for other brands and companies to do the same. I am looking forward to what is to come

— Serena Elis

As a DAO, we are here help support and encourage creators to build, grow and contribute. One of our goals with this series is to foster a more cooperative, supportive, and inclusive community by showcasing the amazing work being done by our grantees. We hope that by taking the time to listen and learn from the individuals like Bay and Serena who are helping shape the future of Decentraland, you may discover where you would like to contribute. We hope their journey and exploration can inspire new ideas and projects that you have been eager to bring to life. So grab some coffee sit back and enjoy!

Being a DAO grantee gave us access to an inspiring community of creators, all pushing what’s possible in Decentraland. It meant that we could open conversations with future collaborators and new friends, as well as gain the financial support to make our builds possible

— Bay Backner, Co-founder, Vueltta

🎬 Enjoy this highlight Clip where Bay discusses her first exhibition Refuge

🎥🍿👉🏽 Watch entire interview

Voting Power Distribution & Whale Votes

Voting power (VP) distribution is a complex issue and the subject of debate in nearly all DAOs. Decentraland DAO is no exception. Recent debates surrounding VP at Decentraland DAO have centered on issues of who should have the right to vote, how much voting power each participant should have, and how voting power should be distributed among participants. This report summarizes discussions surrounding the issue of VP distribution in Decentraland DAO. It includes information drawn from ongoing discussions in the DAO Discord, past preposals, community-led research, and interviews with two community members working on potential solutions to the question of VP distribution: Gino and Ile.

Ultimately, the approach a DAO chooses for its VP structure will depend on its specific goals and the type of decisions it needs to make at any particular stage of its governance process. Different approaches to VP distribution have benefits and drawbacks that may vary between DAOs, depending on their needs and goals. Some common approaches are laid out in the table below:

Decentraland DAO could best be described as a stake-weighted voting system, since voting power is directly associated with the amount of stake that a user has, e.g. 1 VP = 1 MANA). VP is accrued through LAND ownership (1 LAND = 2,000 VP), MANA holdings (1 MANA = 1 VP), Name ownership (1 Name = 100 VP).

While there have been some changes to Decentraland’s VP system since the DAOs formation, all modifications remain within the stake-weighted voting modality. For example when the DAO was established, VP was restricted to MANA and LAND holdings only. Subsequent proposal have attached VP to Names, as well as the original six Layer 1 Wearable Collections.

In recent months, however, the question of VP distribution has received increased community scrutiny, as large, single-wallet votes, i.e. a “Whale” was able to pass measures when there was not broad community consensus, or in the face of broad opposition. In other instances, a while vote was made at the last minute, “flipping” the outcome of a vote, leaving no time for community mobilization or response.

As part of this conversations, Gino from the Governance Squad has been researching different ways to address this specific issue with an eye towards adapting our current system without starting from ground up. Different voting systems are not only associated to DAO specific goals, but also to DAO specific contexts and stages of its governance process. The stake-weighted approach probably made sense at early stages, but with the incorporation of multiple stakeholders with different voting capabilities, the situation has gained more complexity.

Gino: “Not against whales voting, I’m against people voting without context or without saying why they vote the way they vote (…) A proposal can be resubmitted, there are ways… but it’s really difficult to regain the trust when you’re just like a metaverse legislator or DAO user voting on things, lobbying to get some VP to vote on things you believe are right, and then a whale comes and votes without context. I would like to see some guardrails for that, finding mechanisms for those kinds of wallets to be responsive for what they vote”.

Currently, there are approximately 5,000 historically active members of Decentraland DAO. However, as evident in the chart below, of the 85.5M total active VP, 60% of VP is controlled by only 18 wallets.

Another specific issue discussed within the #vp-distribution DAO Working Group centers around encouragement of voting participation through incentives, and the importance of balancing between incentivization to encourage participation, without excessively influencing the decision-making process, or drawing in purely incentive-based actors.

What has become clear, is that increasing voter participation should not only be a core value in a decentralized organization, but also a mean to achieve better outcomes for the organization, it’s stakeholders, and the decentralized ecosystem as a whole. Some positive potential outcomes that we identified are included below:

Decentraland DAO could best be described as a stake-weighted voting system, since voting power is directly associated with the amount of stake that a user has, e.g. 1 VP = 1 MANA). VP is accrued through LAND ownership (1 LAND = 2,000 VP), MANA holdings (1 MANA = 1 VP), Name ownership (1 Name = 100 VP).

While there have been some changes to Decentraland’s VP system since the DAOs formation, all modifications remain within the stake-weighted voting modality. For example when the DAO was established, VP was restricted to MANA and LAND holdings only. Subsequent proposal have attached VP to Names, as well as the original six Layer 1 Wearable Collections.

In recent months, however, the question of VP distribution has received increased community scrutiny, as large, single-wallet votes, i.e. a “Whale” was able to pass measures when there was not broad community consensus, or in the face of broad opposition. In other instances, a while vote was made at the last minute, “flipping” the outcome of a vote, leaving no time for community mobilization or response.

As part of this conversations, Gino from the Governance Squad has been researching different ways to address this specific issue with an eye towards adapting our current system without starting from ground up. Different voting systems are not only associated to DAO specific goals, but also to DAO specific contexts and stages of its governance process. The stake-weighted approach probably made sense at early stages, but with the incorporation of multiple stakeholders with different voting capabilities, the situation has gained more complexity.

Gino: “Not against whales voting, I’m against people voting without context or without saying why they vote the way they vote (…) A proposal can be resubmitted, there are ways… but it’s really difficult to regain the trust when you’re just like a metaverse legislator or DAO user voting on things, lobbying to get some VP to vote on things you believe are right, and then a whale comes and votes without context. I would like to see some guardrails for that, finding mechanisms for those kinds of wallets to be responsive for what they vote”.

Currently, there are approximately 5,000 historically active members of Decentraland DAO. However, as evident in the chart below, of the 85.5M total active VP, 60% of VP is controlled by only 18 wallets.

Another specific issue discussed within the #vp-distribution DAO Working Group centers around encouragement of voting participation through incentives, and the importance of balancing between incentivization to encourage participation, without excessively influencing the decision-making process, or drawing in purely incentive-based actors.

What has become clear, is that increasing voter participation should not only be a core value in a decentralized organization, but also a mean to achieve better outcomes for the organization, it’s stakeholders, and the decentralized ecosystem as a whole. Some positive potential outcomes that we identified are included below:

• Improved Decision Making: the more participants that engage in the voting process, the more informed and representative the decisions will be.
• Increased Transparency: when more participants engage in the voting process, it becomes easier to detect and prevent malicious activity, such as vote manipulation or attempts to sway the outcome of a decision.
• Strengthened Decentralization: by encouraging wider participation in the voting process, a DAO can become more decentralized, with power and decision-making authority spread across a larger group of participants. This can make the DAO less susceptible to control by a single entity or group of entities.
• Increased Investor Confidence: high levels of participation and engagement can build investor confidence.

To date, the community has identified several possible ways to incentivize voting, and to address VP distribution and engagement in our DAO. Some have already been implemented, for example, Voting Delegation — a solution proposed in the DAO’s early stages. Others remain under discussion in the DAO Discord, forums, and in active or recent proposals. This includes dozens of past proposals specifically addressing or mentioning voting power; and more recent proposals that explore Multiple Wallets VP Delegation Proposal, Addressing Power Distribution in the DAO Poll, and VP for Social Capital Pilot.

Discussions over VP distribution and the impact of heavily concentrated VP within a single wallet, particularly VP that has been delegated to that wallet, remain ongoing in the #vp-distribution and #whales-votes public Working Groups in DAO Discord. At this time these groups are operating without a formal product in mind; however, are intended to serve as a forum for discussion and solutioning and consensus building toward designing a comprehensive policy with broad community support. Included below is an approximate summer of these conversations:

DELEGATION

• Decentraland DAO: Although intended first to be a way for investors to exercise their VP by delegating it to players who have a shared vision for the future of Decentraland and to bring another layer of security to those assets, Voting Power Delegation was the first big step for the community towards achieving better distribution of the VP in the DAO.
• Quadratic delegation: This proposed solution involves the establishment of a VP Matching Pool, modeled after the concept of a Matching Funding Pool utilized in Quadratic Funding. A financial mechanism is then created that incentivizes the participation of large token holders in the pool, referred to as “Whales,” by offering an interest rate-based return on MANA tokens staked in the VP pool. VP accrued through this mechanism will then be distributed based on a quadratic formula to a group of recognized delegates within the DAO, that are identified and eligible based on a certain set of to be determined criteria. The rationale behind quadrating delegation is to create incentives for whales to delegate and therefore distribute their concentrated VP among engaged community members. To learn more about this proposed methodology, visit the living document.

ile: “I think if we give people hope or an avenue to gain more influence, we could alleviate a lot of their frustration. Inequality and spread of VP could be considered as the biggest issues around. (…) If we could combine delegation with a sort of VP reward system that would allow people to gain more voting power without necessarily spending money, and if we create that avenue to get more influence in our political system, we’ll be also creating a sort of achievement system or metagame within Decentraland where you can acquire more VP by doing significant things”.

REPUTATION-BASED INCENTIVES

According to this method, participants could earn a reputation within the organization based on their voting and engagement history. This reputation could be used to grant additional voting power, or to unlock other benefits within the organization. One of the main points of discussion around this approach surrounds the use of the DAO’s treasury to give incentives and/or allocate VP and how that should be implemented.

Gino: “From a philosophical standpoint, I think it’s the right way to go and the right thing to do, because the content creators community in Decentraland is probably the most important one. It is the one that’s laying the grounds for the people to join the metaverse and find compelling content, great stories, amazing visuals. Basically, they’re building experiences up from the ground, so I think we definitely need to recognize that community by giving them a stake in the decision making process. I’m not 100% sure what’s the way to do that but we’re gonna find a way”.

• Content Creators VP allocation: This approach aims to amplify the voice of content creators in the governance of Decentraland. The objective of this approach would be to create an incentive for content creators to continue contributing to the project by allocating defined amounts of VP as a way to be rewarded for their work. As a possible side effect, it would also encourage more people to create and submit high-quality content.
• Spending time in-world: Another suggested approach by community members considers the possibility for Decentraland users being rewarded by spending certain amounts of time in-world. Here, the rationale suggests that users that spend more time in-world are the ones that have a better knowledge of the platform, and therefore will be more interested and will make better decisions surrounding Decentraland’s growth.
• Decision Making Process Engagement: This approach proposes assigning a specific weight and value to different kinds of engagement with the decision making process of the DAO (e.g. voting, leading discussions or being the author of successful proposals). This could include incentives such as badges and reputation points linked to set amounts of VP; multiplier boosts; or simply the allocation of pre-defined amounts of VP for carrying out certain actions or activities. Allocated VP and/or boosts could be either temporary or permanent, in order to encourage continuous engagement to maintain a level of earned VP.

MONETARY REWARDS

A monetary reward system would offer participants financial incentives for voting and engaging in the DAO. This could include rewards for casting votes, participating in discussions, and contributing to the decision-making processes.

GAMIFICATION

Voting and engagement processes could be incentivized by incorporating elements of game design: creating a competitive environment by using leaderboards, challenges, or other game-like elements such as quests or missions for participants. This approach could also be combined with others, for example rewarding accomplishments with VP.

VP TOKENIZATION

This approach suggests creating a new governance token separated from MANA for voting and could also be combined with other approaches above. The creation of a new voting token could provide the DAO with greater flexibility in terms of tokenomics, allowing it to better manage incentives and discourage undesirable behavior. Also it could increase security by separating the voting token from the existing token, reducing the risk of the voting process being manipulated by “malicious actors”; or be used on specific votes or categories where a single-wallet, linked to a known single identity could be beneficial. Community members have however noted that a wholesale reformation of the underlying tokenomics structure of the DAO would likely be overly complex, and could result in unpredictable changes in fluctuations across the broader ecosystem and confidence in MANA as a whole.

At this time all possible outcomes remain under discussion, as the community continues to explore pathways forward. This information has been provided as a summation of ongoing discussions in the DAO, and to support future solutioning and consensus building efforts.

CONCLUSION

At this time, it appears that community members involved with working group discussions are exploring some form of a hybrid system that prioritizes a more balanced distribution of VP. While a broad solution has yet to be determined, any proposed outcome would likely consider a range of factors that extend beyond the “stake”-based orientation of our prevailing system, including but not limited to: creating voting or VP distribution incentives, participation/contribution to the DAO, reputation, and time spent in-world or involved in other areas of the Decentraland ecosystem.

In any “hybrid” system, establishing sybil-resistant voting mechanism will remain a pressing concern. To address this issue, secure verification of individual voters is paramount. To that end, several solutions have been proposed, including the implementation of proof of humanity mechanisms and the utilization of Soulbound tokens (SBT) — non-transferable non-fungible tokens with specific non-financial applications such as identity verification, academic credentialing, and web3 credit ratings.

Overall, the issue of VP in Decentraland DAO is clearly a pressing concern to a sufficiently large cohort of community members, as it has remained a central point of discussion for many months, and has been approached directly in dozens of proposals. It may not be possible to solve for this issue in a single all encompassing proposal, however, it is important that any policy that does address VP and “whale” voting be as comprehensive and sustainable as possible.

Learn more by listening to the interviews below!

🗣️🎙️👉🏽 Listen Gino’s Interview | Listen to Ile’s entire interview

The Modinator

Over recent Months, the issue of community moderation has remained an ongoing point of contention. There are some who believe the issue is straightforward: there are rules in the DAO discord. There should be moderators responsible for enforcing these rules. These moderators interpret the rules and make moderating decisions. There are others who equally believe that the ethos of web3 and a decentralized ecosystem make it such that there should be no one with the power to make singular moderating decisions, including to ban users from key governance forums, such as the DAO Discord server.

While there may be no right answer to the question of moderation in a decentralized ecosystem, a cohort of Decentralandians has come up with at least an interim solution to community moderation of the Decentraland DAO Discord: The Modinator

At this time, Decentraland DAO’s discord has no official moderators. Until recently, the responsibility fell to members of the DAO’s Facilitation Team (which are the writers of this report!). However, while facilitators serving as moderators in the Discord may have been helpful in the early period of the DAO’s operation, this responsibility was not included in the renewal of our team’s grant, and it is clear that facilitation should in no way include moderation under its mandate. Facilitators are at the service of the DAO to support smooth governance and policy ideation, not police community member behavior and engagements.

Introducing, the @Modinator. The newest addition to our DAO Discord was created by @HPrivakos — a DAO Committee Member. In order to access the bot’s moderation abilities and vote in moderation-related Discord votes, community members must have a DCL Name and validate it through an action carried out at an in-world scene. The bot will be tested in real-Discord scenarios over the coming week; however, upon its start a 24h timeout will require 5 votes within 20 minutes of the bot being initiated against a user; delete a message will require 5 votes within 20 minutes of the bot being initiated to remove a message; and 1 week timeout will require 20 votes within 24 hours. These figures may quickly be increased if they are found to be too low a barrier to prevent undue timeouts or deleting of messages.

Once the bot has been activated in the server, and a user’s name has been validated in world, to access the bot, a confirmed “Community Member” may take the following steps to invoke an attempt to implement a moderation decision (this process may change slightly once implemented):

1. Call the Modinator with /timeout (/ban, /delete) command
2. Enter/select the user in question
3. Select the duration of the timeout
4. Enter the reason for the time out

The action will then go to a community vote in the #general channel, as well as in a specific channel for Discord Moderation.

The Modinator should be active in the very near future, and detailed instructions on its use will follow. Over the medium term, we hope the community will determine a sustainable policy for community moderation that involves some hybrid form of centralized and decentralized control, potentially including the use of professional Discord moderation teams, hired from outside the community.

Good luck to us all!

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The Decentraland DAO Community Pulse Report was prepared by the DAO Facilitation Team: @Matimio, @Fractilians, @Fehz