KPI Sub-DAO Structure
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January 5th, 2022

Governance is minimized to focus purely on two areas:

  1. What are the KPIs/metrics and OKRs of the DAO?
  2. Which proposals should be funded?

The entire DAO will be organized as sub-DAOs and ideally two-pizza teams:

  • All sub-DAOs will take care of their own internal governance, compensation, and allocation of responsibilities (central leadership is encouraged when practical)
  • Anyone can join and contribute to any arbitrary number of sub-DAOs
  • Sub-DAOs can have any arbitrary amount of members
  • All sub-DAOs engaged to the overarching DAO via work proposals
  • All work proposals outline:
    • The specific KPI that the sub-DAO will focus on driving success in
    • The actual work that the sub-DAO will undertake to drive toward the KPI
    • The compensation and resources requested by the sub-DAO

Every 3.5 months (April, August, December), the DAO engages in a two week intensive period of governance participation revolving around:

  • Assessing whether the DAO’s key outcomes and KPIs should change
  • Assessing whether the DAO’s funding forwards proposals have created satisfactory progress towards the key objectives (identifying what works and what doesn’t)
  • Identifying key organizational needs and bottlenecks to be addressed (these would need to pose a barrier to the DAO in achieving its key KPIs)
  • Pivoting, iterating, improving, and creating new work proposals

During these two weeks, everyone in the sub-DAOs is expected to participate in shared discussions. If a team’s work is found to be ineffective or needs improvement, they either can quickly iterate their plans or are given a notice period for which they may continue on for another 4 months but need to iterate on their work plan.

When focusing on accelerating the progress of the DAO, the goal is to grow horizontally via more sub-DAOs (vs. growing vertically through working groups)

Through more sub-DAOs, the entire org can increase the number of teams trying new approaches to solving and innovating on existing problems and focuses while maintaining the same level of meta-organizational admin/overhead required to run. The competition is good.

Encourage new community members to join existing sub-DAOs or start new ones.

What it looks like starting DAOs under this structure

IMO, starting DAOs will still look fairly similar to how we start them right now:

  • Starting small, walk before you run
  • Initial monolithic group

But the key difference is that when the DAO looks to scale and accelerate the work that it’s undertaking, it does so via an open call for Sub-DAOs to apply for work as opposed to encouraging more member growth under functional working groups.

Principals of this Sub-DAO model:

  • If a work proposal has a decent chance of driving forward KPIs, fund it
  • Loosely fund and operate as many ideas that may have a chance of working, allocate more resources to sub-DAOs that produce results, de-fund ones that don’t
  • Encourage competition of ideas in driving KPIs (being open to two sub-DAOs in running similar work eg. two teams working on two different go to market plans)
  • Once proposals are funded, let the proposers/sub-DAO figure out the rest

But what about protocol governance?

A protocol may still need its parameters to be tweaked, smart contracts upgraded, etc.

This is generally imo this is generally a far more straightforward side of protocol governance and can run in parallel to the sub-DAO processes.

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Credit goes to James Young for most of the core ideas outlined here.

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