OWN Insights Twitter Spaces Review: Balancing Contributions and Revitalizing the DAO
Give members DID and reputation, stimulate enthusiasm, and exploit potentialities
In this issue, we will be reviewing the second OWN Insights Twitter Spaces, together with the development of DAOs, and how we can tap the potential of infinite possibility.
The Definition of DAO
What is a DAO? The simplest way to understand it is as a “corporation” managed jointly by all the participants, in a way that the DAO should be a flat structure where everyone has the right to share their ideas while contributing to and benefiting the DAO (both financially and spiritually).
Different from traditional companies, DAOs should be completely transparent and decentralized, to establish trust with members. In other words, members can know the development direction, the decisions, financial status, capital flow, etc. of DAOs anytime and anywhere, and have the right to make decisions and manage them.
Underpinning this is the smart contract, which allows members to make decisions on DAO transactions by voting, while the smart contract executes based on the voting results.
Motivation and Contribution
The smooth operation of a DAO is inseparable from the contribution of its members, so for DAOs, a reasonable incentive mechanism will help their growth.
Currently, the incentive strategy adopted by most DAOs is reward monetization, by giving members financial benefits to push them to participate in various DAO transactions, such as issuing specific tokens or being whitelisted into an NFT.
Undeniably, practical benefits can actively promote the upward development of the entire DAO at the start and attract more people to participate in the governance and running of the DAO.
However, in the later stage, many members often find that their contributions are not exactly in line with the actual benefits, and the difficulty in balancing the power of discourse also causes tension between members. For example, old members may find themselves earning less than new members because they hold fewer tokens than new members.
At the same time, the decreasing sense of interest and satisfaction brought by economic gains can lead to a decrease in enthusiasm for contribution from the original DAO members, which will be followed by the continuous decline of work efficiency and quality.
So it’s time for us to think about “balance”:
• How to define a good contributor
• What ideas/suggestions should be prioritized
In other words, how can we give a DAO member more “fair” rights to increase their motivation?
Definition of “Contribution Degree”
Some DAOs are introducing, or have already introduced, NFTs, which are more like the SBTs of Vitalik Buterin, serving as an identifier to represent members’ voting rights, protecting governance shares, and allocating DAO benefits to each contributor based on NFTs.
However, as a DAO governance tool, this system can only help a DAO quickly identify the contribution degree according to the NFT. However, it does not define the contribution degree clearly. On what basis should the DAO assign these different levels of NFTs?
Perhaps we need to give a definition of contribution degree:
• The number of “tickets” can only partially affect the contribution. Because “tickets” can be purchased in large quantities through the secondary market, it has little significance for the positive development of a DAO, and it is easy for a DAO to fall into capital control.
• On-chain behavior needs to be given higher weight. This refers to participating in various DAO activities, such as voting, interacting with the DAO’s smart contract, posting about the DAO on-chain, etc.
Especially for the latter, the data will intuitively and transparently show the degree and enthusiasm of a member’s contribution, and can more fairly assign the member’s “status” and “level” in the DAO.
DID and Reputation
With such a definition, it is impossible for a DAO to pull out the on-chain behavior data and digital assets of all members every other cycle, and calculate their contribution in the long run. Therefore, a digital/decentralized identity (DID) that can be dynamically counted and visually marked becomes an indispensable tool for DAO management.
At present, part of DID can be combined with such data to generate accurate reputation value and achieve the function of display. This is what Ontology’s ONT ID aims to achieve.
From the perspective of Ontology, DID will become an essential tool in the development of DAOs. Based on DID, the on-chain behavior of each member will become transparent and unified, which will promote better management of DAOs. For example, users who must hold a certain NFT can join the DAO.
At the same time, as the data recorded in a member’s DID becomes more and more abundant, the dimension of reputation construction will be constantly improved. At this point, through scientific mathematical modeling, the data of DAO participation can be synthesized into an accurate reputation value, which becomes an accurate identification of the contribution degree. Since the record of DID is real-time, it represents the immediacy of contribution/reputation value and reduces the statistical pressure on the DAO.
For DAOs, integrating a reputable DID system will bring them more automated contribution identification and member management. Meanwhile, the accuracy of reputation value will realize more equitable empowerment, including management rights, discourse rights, earnings, and so on, so as to improve the enthusiasm of members and solve the later slowdown caused by the decline of economic earnings.
Based on this, DAOs will stimulate more potential of the members and glow with new vitality.
The full recording of the second OWN Insights Twitter Spaces series is available at https://twitter.com/OntologyNetwork/status/1570698365293436929
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