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It’s Time For DAO-to-DAO Coordination

PrimeDAO to Develop and Dogfood D2D

This blog summarizes concepts described more deeply in previous work. See the D2D Tech Report, D2D Digests [1] & [2], and the D2D AMA for background.

An era of DAOplomacy is coming! Over the course of the last six months, PrimeDAO has advanced the research and prototyping of DAO-to-DAO interactions (D2D) — in short, ways for DAOs to interact and negotiate with each other. Prime is pleased to present a complete prototype (Github) that demonstrates a minimal viable D2D mechanism using the Gnosis Conditional Tokens Framework. The framework itself is pretty complex, and would require an article of its own to review, but if you’re truly passionate about D2D, check it out!

To offer a very brief summary of the D2D mechanism: it allows for tokens to be trustlessly exchanged between DAOs depending on predetermined event conditions. It is:

  • Agnostic: Any DAO that can issue external transaction calls can use Prime’s D2D mechanism. It doesn’t matter if you’re running on Gnosis Safe, Daohaus, or DAOstackany governance framework can work.
  • Trustless: All parties can recover any funding issued for a D2D collaboration when all conditions are not satisfied. This reduces significant negotiation overhead as there is no possibility of financial loss. Either the collaboration occurs, with the necessary funding being correctly directed, or it doesn’t, and each DAO gets its funding back.
  • Flexible: The D2D prototype goes beyond traditional escrow mechanisms to allow for flexible negotiations that operate closer to existing, real-world negotiations. Conditions can be added in real-time to account for any changes that may arise while a negotiation is in process — something impossible with a bespoke escrow smart contract.
  • Granular: Conditions can be as simple or as complex as the parties involved wish them to be. The complexity of collaborations is decided by the parties creating the conditions, and they may choose anything between a single shallow condition or deeply nested, granular conditions.

Beyond these key benefits, there are other more complex bonuses to the mechanism, such as the ease of working with multi-party binary and scalar outcomes and more. You can learn about these advantages as you wish, but the overall point is that the hard research is done and delivered: it’s time to supercharge the future of D2D coordination.

The Future Of D2D

An aggressive roadmap for D2D is planned to start following Prime’s current strategic raise.

Prime will develop a Negotiation Interface to fulfill the need for a place in which D2D negotiations can be facilitated, ratified, and archived.

This interface is lacking, meaning that the majority of D2D discussions take place in relatively silo-ed spaces of projects’ personal forums or other communications channels.

This interface will allow users to:

  1. Clearly define the terms of their proposed DAO agreement, by filling out a proposal template specifying all of the pertinent information for a potential D2D collaboration. The completed information will be uploaded to IPFS.
  2. Create the on-chain conditions for both DAOs or a single DAO. For the latter, an open proposal slot will be created to be signed and addressed by the counterparty in the future.

Just as DAO interfaces currently show current and past proposals, the interface will become a public archive of previous proposals facilitated by the D2D mechanism. The interface will provide collaboration-as-service for DAOs on Ethereum. While brainstorming and creating an effective business model around the interface is still in its early stages, PrimeDAO will aim to take a fee from successful collaborations for maintaining and governing the interface as a decentralized service provider.

But what about the use cases the interface will support? A three-phase roadmap:

Check out the first co-liquidity pool — a BAL x PRIME pool co-created by the Balancer and Prime DAOs!

Phase 1: Joint Ventures, Co-liquidity Pools, and Token Swaps

The first use cases for D2D are straightforward:

  • Co-funding a Joint Venture: The foremost use case for the D2D prototype is co-funding a new wallet representing a joint venture between the funding DAOs.
  • Co-funding a Liquidity Pool: This use case is essentially the same as co-funding a joint venture, except instead of transporting the funds to a wallet, the funds are sent to a custom smart contract that turns into a liquidity pool. The D2D mechanism will synergistically work together with the Prime Pool interface to facilitate these interactions.
  • Token Swaps: Many DAOs today want to trade tokens with each other directly, but need it to be done trustlessly, with specific conditions.

Phase 2: The Proposal Inverter

The proposal inverter is a funding primitive that enables multiple groups or individuals to collaborate on common proposals. It inverts the typical Proposal / DAO relationship to facilitate cross-DAO initiatives, such as co-funding shared research. The D2D mechanism can be used to facilitate the proposal inverter by making sure that initial contributions are met before initialization.

Diagram outlining a potential instance of the Proposal Inverter

Phase 3: Cross-chain D2D

As interchain assets, communication, and governance become increasingly common, and bridges between chains multiply, the need for a D2D mechanism to facilitate all of these in a trustless manner will become ever more important. The third phase means extending the D2D mechanism to interchain negotiations.

Conclusion

An era of DAOplomacy is coming. Mergers, acquisitions, and exchanges between organizations have existed for thousands of years. Now, much of the overhead of exchange can be automated, helping empower a new wave of collaborative entrepreneurship. Prime will pave the way for these interactions by dogfooding itself into a headless brand — an open value network that builds effective organizational coordination tools that secure the collective future of DAOs all over the world.

🌱 PrimeDAO is hosting a Seed Round to fund D2D development — check it out or register to join!

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