How to DAO
Decentralized governance
The Waves DAO is a dApp developed on the Waves blockchain and used as a decision making tool by the Waves Association, which sets up development directions for the entire ecosystem and makes strategic decisions on the Waves, Gravity and Neutrino protocols, as well as other products.
When the association was formed on January 31, 2020, it was announced that decentralization and transparency will be its main governance principles. Based on that, a simple and clear procedure for accepting new members was established, as well as a standard for making strategic decisions, including project funding in the ecosystem.
But the association has to stay transparent not only for its members, but also for any blockchain user, and, therefore, all its processes need to be run transparently. To implement this, the Waves DAO was built.
Thanks to the Waves DAO concept, the community can see what decisions are currently discussed by the association, how votes are run and who is behind any decision on issuing funding to a project. This concept not only fosters trust in the association, but also helps keep the community up to speed on what is happening and even engage its members in deciding on formats, dates and volumes of support extended to projects based on Waves technology. Eventually, this is how the entire ecosystem’s development directions are decided. Based on the “wisdom of the crowd” concept, it is important to have as many opinions from interested parties, as possible.
This guide will explain in simple terms and in great detail, how decisions are made using the Waves DAO and who takes part in the decision making process. Any community member will be able to use this guide to understand how the Waves DAO works and take advantage of it to learn the statuses of processes and projects in the Waves Association.
To get a basic understanding of what a DAO is, I suggest you check out this article: What is a DAO?
User roles
The DAO Manager is a DAO administrator who has the right to set the working group and association member lists. Currently, the DAO Manager is a single account, to which the association’s secretary has access . The DAO Manager doesn’t participate in votes.
A DAO Member is any association member who was accepted by recommendation of the Membership Working Group, paid a membership fee and has the right to vote on grant distribution decisions. A list of accounts that have a DAO Member status is decided by the DAO Manager. Currently, it includes 30 association members.
A Working Group Member is a member of the Working Group for Funding & Grants. The working group’s task is to play an administrative role in the grant program management. Specifically, WG Members have to suggest grant assignments, open and close votes on grant issue and prepare reports on grant execution. Currently, the working group includes 8 people. Their accounts are added to the DAO by the secretary.
An applicant is a user who is not added to the DAO member list. This is any community member who has applied for a grant using their Waves account. If their application has been approved and confirmed by voting of DAO Members, the user will be granted a Performer status.
The Association Board is an entity within the association, consisting of working group heads and the president. This entity doesn’t directly interact with the smart contract but, in real life, has the right to confirm a working group’s decisions.
Grant types
All user roles are involved in the grant distribution process, except for the DAO Owner. For convenience, we’ll use abbreviations: DAO Member (DM), Working Group Member (WG), Performer (PE), Association Board (BO).
Disruptive Tech Grants
Grants of this type are suggested by association members. Normally, these are major development or research tasks that can be vital for the development and adoption of blockchain technology.
Workflow:
(offchain) WG & RD & BO: discuss tasks
WG: proposes task
WG: adds a task description and reward amount
DM: votes on the task (do we really need it?)
WG: finishes voting on the task
PE: applies for performing the task
DM: votes on task applicants (choose the performer)
WG: finish performer election
PE: starts work on the bounty
PE & WG: off-chain communication
(offchain) BO: approves a solution
WG: accepts a solution with a work report and pays a reward
A detailed diagram of participant interaction in the decision making process is available on the Waves DAO website.
Web 3.0 Development Grants
Ideas for grants of this type are suggested by applicants. Normally, these are ideas for dApps or startups. You can check out Web 3.0 Grant ideas that have been approved so far in this article.
Workflow:
PE: proposes a solution
PE: adds a solution description and requested reward amount
WG: initializes a vote on the solution
DM: votes on applications
WG: finishes voting on the task
PE: starts work on the bounty
(offchain) PE & WG: communication
(offchain) BO: approve solution
WG: accepts the solution and pays a reward
A detailed diagram of participant interaction in the decision making process is available on the Waves DAO website.
Interhack Grants
Grants of this type are as close as possible to the hackathon format, familiar to most developers. The association suggests an idea and offers a prize, and developers who pass preliminary selection compete in implementation of the idea.
Workflow:
(offchain) WG & RD & BO: discuss tasks
WG: proposes a task
WG: adds a task description and reward amount
DM: votes on the task
(offchain) BO: approves the grant
WG: finishes voting on the task
PE: applies for participating in a hackathon
DM: votes on hackathon participants
WG: finish participant election
WG: sets up a jury list & starts the hackathon
PE: submit solutions
WG: stops accepting submissions
JURY: votes on solutions
WG: accepts the best solution and pays a reward
A detailed diagram of participant interaction in the decision making process is available on the Waves DAO website.
This type of grants implies another entity, the JURY — as list of addresses of DAO Members participating in the selection of winners. This is done to speed up the process of evaluating solutions after the completion of a hackathon, as it requires a smaller number of involved individuals.
Looking forward
Grant distribution is the association’s main task. However, for harmonious and sustainable development, it has to implement other tasks, as well. The Waves DAO should become the main tool for running the association’s processes. Therefore, in the future, it should acquire functionality that is not directly related to the grant program.
For instance, the process of accepting new members should be moved to the DAO, from the working group voting stage to membership fee payment. This will help make the system independent and cyclical, ensuring an inflow of new DAO Members who will vote for project sponsorship.
The addition of other votes on changes in the Waves ecosystem is also possible. When the first grant batch was processed, the issue of insufficient verification of project tokens on Waves exchanges was discovered. One type of votes that could be added to the DAO is a vote by association members on token verification, with adding approved token’s avatars to Waves.Exchange.
The Waves DAO is evolving into a large-scale system for decentralized decision making. At the first stage, it will be used for transparent distribution of funding to project, and later it will expand to become a framework for the Waves ecosystem governance. Meanwhile, the Waves DAO is an independent product that can be used by other teams. Therefore, the solution’s open-source nature and transparent development were priorities.
