Lomads

Tailoring the Right Governance for Your Organisation Simplified

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Inspiration

Decentralized autonomous organisations (DAOs) have gained reasonable traction in the Web3 space.

According to DeepDAO, there are over 2246 DAOs with a total treasury of about 10 billion in assets and around 3.8 million members across them.

As DAOs become a mainstream feature of financial and cooperative organizations, there are still some challenges that need to be settled. Some of the problems facing DAO’s today when it comes to governance and operations are:

  • Low Member Engagement: For 99% DAOs, there is less than 0.5% participation from governance token holders
  • Centralization Crisis: Rich will always be rich and strong will always be strong
  • Decisions are difficult to Balance: Conflicts between opinions of domain experts and the interest of other community members. Should everyone vote in all cases?

We believe that the answer lies in balancing governance rights with active member engagement. We propose a solution where the members will be incentivised not just through tokens but through reputation points earned for their contribution to the DAO. These reputation points will in turn unlock different rights and privileges. Such a system will help:

  • Incentivise DAO members for their work
  • Promote proactive DAO members
  • Fairly distribute governance rights
  • Keep DAO Member Contribution record (Who is trustworthy, Who is contributing value etc.)

What it does

The proposed reputation system would would rely on:

  • Tokens , which represents the financial contribution of the member
  • Reputation, which represents the “sweat” contribution of the member

Sweat contribution (Reputation points) which is a quantification of the member's contribution in the DAO. It is calculated by assigning importance to various metrics based on their importance and aggregating their values. These metrics are fixed in advance by the DAO but can be edited as the project progresses. Table below shows an example for a Co-Living DAO.

Parameter Tags Score (1-10)
Organise Pop up Coliving Weekend Event 10
Attended an Experience Weekend Event 6
Rent a Co-living Space Product and Services 8
Referrals: People who rent Community 3
Referrals: Places / Coliving Spaces Product and Services 4
Mentioned on Social Media Community 2
Joined Discord Community 2

These Reputation points are then used to calculate Strength (S) which is the weighted mean of member's financial skin in the game (token holding) and the work (sweat) contribution to the DAO. Respective DAOs can select the weights based on what is more important for the functioning of the DAO.

S= wtT + wtR

T = No. of DAO Tokens Staked

wt = Weightage of Staked DAO Token

R = Reputation Points (described below)

wr = Weightage of Reputation Points

Strength points will give users Right and Access (RA)-NFTs which are the real-world equivalent of access cards. In a DAO there can be several levels of RA-NFTs, each providing the holding member with a set of rights and access. For example, NFT level 1, NFT level 2, NFT level 3 so on and so forth. A DAO can decide whether the RA-NFTs would be soul bound (linked to the wallet of a member) or can be passed on to others.

A member can increase or decrease their Strength points through either the number of DAO tokens held by them or reputation points assigned to them which they can:

  • increase due to contribution to the DAO
  • increase due to rewards for exceptional performance (manual)
  • decrease due to time decay
  • decrease due penalty for misbehaviour (manual)

In short, the value NFT level will keep changing. The RA-NFT held by a member will be immediately burnt if either a member’s Strength points fall below a certain threshold set by the DAO.

How we built it

While building this project we took the following steps:

  • Brainstorming and Ideation: This was helpful to chalk down all the ideas and filter out the one that the team would be working on for this Hackathon. Since we have already been working with DAOs we had a good understanding of the problems faced by them. This helped us in making our final choice
  • Define the problem, solution and the project scope: Once we had decided what problem we will be working on we then set out to elaborate the problem and our proposed solution. Defining the scope of the project was important as we had limited time and resources.
  • Planning:
    • Set Project Goals and Objectives
    • Determine Project Deliverables
    • Create Project Schedule and Milestones
    • Assignment of Tasks (Design, Coding, Documentation and Presentation, Video)
  • Execution: was also done as a team, with everyone working on their respective tasks but getting regular feedback from the other team members
  • Review and Feedback: We reviewed the final result and got feedback from some people. This helped us in making slight changes

The team consisted of 2 developers, one designer and one product manager

Challenges we ran into

The two main challenges that we faced we: Defining the Project Scope: We want the system to be fully customisable as different DAOs have different needs and priorities. One model fits all does not work. Hence it was challenging to come up with design and user flows. Communication and Time Management: As we were doing this project only on evenings and weekends after our jobs it was sometimes difficult to co-ordinate with other team members. Planning meetings in advance helped us a lot.

Accomplishments that we're proud of

  • The idea: We think that this system will help DAOs in identifying and incentivising the top contributors
  • The design: The customisable design and modular approach will help DAOs to define the system to best suit their respective needs
  • Teamwork: The team worked in sync and gave regular and constructive feedback which helped in finishing the project

What's next for User Contribution based Rights & Access System for DAOs

The next step would be to build a fully functional MVP and test it with real customers and make the necessary edits and additions

Integration with TRON

TRON integration will be in the following steps

  • DAOs build on TRON will use the system. Hence the system will use TRON blockchain for::
    • User Identity and Authentication
    • User DAO Token balance (Token holding and Token staked)
  • Calculation of the Reputation points and the Strength points will be done off chain but the system will use TRON blockchain to
    • Mint NFT for different levels
    • Automatically distribute NFTs
    • Upgrade user NFT
    • Governance Smart Contract (User Rights and Access) linked to the NFT

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