How to DAO part 1: Proposal Basics

Whether you are writing a proposal or voting on a proposal, it’s important to understand the elements of a great proposal. In this blog post, DAOwl provides a template and some tips for you to use. This is the first in a multi-part series that will empower you to create great proposals. Even if you aren’t creating proposals yourself, as a Pioneer, you’ll want to be able to assess the proposals you vote upon to the best of your abilities.

Below is a basic outline that works for many kinds of proposals. For code changes, we will require security audits and a more rigorous process, so this template isn’t relevant for that. But you can use it for just about anyting else. Rather than giving you a description of what to put here, Owl has created a sample proposal for an imaginary event to show you how it’s done. But first, a cautionary tale.

Cautionary Tale: Guarding the Treasury

In May of 2020, a legal battle began between the AragonDAO and the Autark software development group. The lawsuit, to the tune of $800,000, alleged that Autark did not deliver the software that the DAO had paid them to develop. On the converse side, Autark claimed that they had delivered and that Aragon had not released the funds. The Ethereum community was, to say the least, unhappy that this ended up in a traditional court.

How did this happen? The DAO allocated more than a million dollars — all at once — to its development partners. Autark was one of two selected development partners who were well-known to the Aragon team. Also, how did it end up in court? DAO is supposed to avoid the centralized court system. How can the Aragon Association sue someone without a vote in the DAO itself? The team must have decided without a vote.

Owl does not know how this happened. Maybe a lot of people didn’t know how it happened because a whole bunch of Aragon One Foundation members resigned six months later.

Whatever the case, Aragon is still one of the biggest DAO platforms in the industry, and the Aragon Association has authority over how much of the funds are released to the various DAOs in the system. In other words, it’s not a DAO. It’s a centralized association that decides when and how much funds to allocate to the DAOs registered on its platform.

That is not tomi’s trajectory. For tomi, the DAO has bigger stakes than just a million dollars. We would like to avoid expensive mistakes like this, but even more importantly, we do not want to end up with the power in the hands of an association. The DAO should be mature enough to be able to run tomi responsibly.

We know it is possible because we have an example in the DASH ecosystem. The DAO started as a community fund of 10–15% of the transaction fees, and evolved to what it is today — the governing body of the DASH protocol. MasterNodes participate in a DAO and there is no longer a need for a centralized authority, because the community started with small proposals for code upgrades and marketing activities, and over time, took over all the coding and all the marketing activities of DASH. This is the trajectory we are hoping for at tomi. It took approximately four years, and in the meantime the DASH DAO developed best practices that we can adopt. You might want to read some of the proposals on the DASH DAO dashboard to get an idea of how proposals look in a mature organization.

DAOwl’s Example Scenario

The following proposal is not going to the DAO because Owl is not an event organizer. Owl used ChatGPT to create a sample budget, so don’t copy the content. The point here is to see the level of detail and typical considerations you would want to make public if you are asking the DAO for funds. We realize that in its current iteration, the DAO would not support such great-looking tables and images, so you might want to use HackMD, GoogleDocs, GitBook or even a website to display your proposal. Just make sure that the requests in the DAO are precise.

1. Imaginary Title: tomiBirdBrains

The tomiBirdBrain will take place in the enchanted forest. The goal of tomiBirdsBrains is to bring on 100 new tomiNet users from the BirdNet. Birds do not have free access to the internet and very few of them know how to use Web3, so this is a blue sky market for Web3 and tomi’s revolutionary platform providing free and open internet for everyone.

2. Summary / TLDR

• Budget requested: $80,000, with profit split at the end to return the profit to tomiDAO
• Deliverable: Conference with 500 attendees to take place in the Birdhaus Conference Center on May 25–26
• Logo and branding permissions requested for tomi brand items
• $TOMI 6000 ArtDAO competition to create the logos and items for the conference
• Expected revenue from the conference: Revenue to be split 50% to the tomiDAO and 50% to the Owl organizing team
• tomi Core Team to help with the smart contract development and payment collection programming. Estimated time= 2 part-time programmers, 1 month.

3. Description

Below is an image of the Birdhaus Conference Center, where the event will take place. Owl has already contacted the administration office and confirmed the costs for renting the conference center. There is a separate treehouse for sponsor exhibition desks and a startup pitch stage.

4. Team

DAOwl from the tomi team will oversee the production, but the actual work will be done by a team of experts.

• Orange Stork: organization, operations, management of all the details for the conference. (linkedin.tomi/in/orangestork/)
• Cockatoo Plumage: website, announcements, visual elements, marketing and outreach. (www.cockatooplumage.tomi)
• Robin Redd: Speakers and experts recruitment. (github.tomi/rrredd)

5. Budget

6. Revenue

After the organizers return the initial $172,000 to the DAO, the remaining, estimated profit will be $193,000. According to the proposal, this profit will be split 50/50 between the organizing committee and the DAO.

7. Requirements for tomi Core Team

Creation of a smart contract that will split the money from the ticket sales and sponsorships automatically between the organizing committee and the DAO, providing full transparency.

Assistance in setting up the website to accept payments in any token. These token will then be converted to $TOMI for the smart contract mentioned above.

8. Requirements for the DAO

• Budget allocation: $80,000 in advance for the down payment on venue, printed items, catering, etc. The remaining budget will be funded by ticket sales and sponsorships.
• The remaining budget will be funded by ticket sales and sponsorships.
• ArtDAO contests: We would like to run 3 contests in the ArtDAO for our logo, swag design, and the venue posters. We would like an allocation of $TOMI 6,000 from the ArtDAO for these designs, and we will give back to the ArtDAO $TOMI 12,000 from the revenues.
• tomi core team smart contract development for ticket payment collection and automated profit share split.

9. Other Specific Requests

• Use of the tomi Logo for the conference and artwork presented at the conference
• tomi team booth or speakers if possible (not required by the proposal, but we would love to have the tomi project featured.) Even if the tomi team does not come, we will create a booth where people can register a tomiNet domain name, open a tomiPay wallet, and create websites on the tomiNet.

10. Outcomes / ROI

• 5 keynote speakers with prominent followings
• 30 speakers and panelists in total
• 500 attendees, of whom 200 are paying full price ($250) to attend, and another 100 will pay a discounted price
• 40 new websites registered on tominet through sponsorship, outreach, and attendees
• 100 new TOMI wallet holders

11. Milestones / Timeline

12. Risks / WCPGW

The main risks are in the area of profitability of the event itself. The organizing team is taking a risk in terms of their time, because profits are split evenly between tomi and the team. Even if the event is break-even for tomi, the amount of publicity and new users will be worth the marketing effort.

End of Imaginary Event and Introduction of the Template

With the fully context of the imaginary event proposal, we hope you have a better understanding of the level of detail and structure required for a successful DAO proposal. Remember that the example provided is not meant to be copied but rather serves as a guide to help you create your own proposals.

Now that you have seen a comprehensive example, feel free to use the generalized tomi proposal template provided in this post to draft your own proposals. Always remember the significance of a well-prepared proposal in determining its success, and approach your projects with diligence and care.

The Generalized tomi Proposal Template

Just copy the headings below to start your own template!

1. Title
2. Summary /TLDR
3. Description
4. Team
5. Budget
6. Revenue
7. Requirements for tomi Core Team
8. Requirements for the DAO
9. Other Specific Requests
10. Outcomes / ROI
11. Milestones / Timeline
12. Risks / WCPGW

Final Words

As you can see, a lot of thought goes into creating a good proposal for the DAO. It takes quite a bit of thought, even for someone like DAOwl, but there’s really no excuse today. We used a bit of help from ChatGPT for figuring out the budget and things like that… you really should be more careful though. If you were really planning something like this you should already be in touch with a venue and a T-shirt vendor, and you’d want to make sure that the tomi team is aligned with the idea. As you can see in the Discord channels, there are people who reach out to Owl or others on the team to get support with their proposals.

The team is here for the success of tomi and to bring the community into the process. That happens through your contributions and proposals to the DAO. Owl does not take sides on which proposals people should vote for, but I do help people with legitimate proposals to make them presentable to the community. Sometimes people say my critiques are a bit too direct, so Owl is trying to learn to be more tactful — but generally speaking, if Owl comments on your proposal it means that your proposal is serious and we want you to succeed. We have a great community and a great DAO, and it’s up to all of us to crush it together!

Follow us for the latest information:

Website | Twitter | Discord | Telegram Announcements | Telegram Chat | Medium | Reddit | TikTok