Temp Check Discussion on Shutter 0x36 Structure, Organization, Coordination, and Service Provider Agreements

Shutter DAO
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As the LBP comes to a close and the Shutter DAO 0x36 begins to embark on its first relationships, several questions have surfaced around how the DAO wants to structure the coordination, oversight, and agreements with various service providers.

While this conversation began in a different forum thread discussing the initial transfers to Artis (thread here), this thread is meant to be a “whiteboard” for the DAO to discuss different options and structures for future organization and relationships.

There seem to be two main topics that have been recurring themes in recent days as the DAO has discussed contractual agreements with Artis. (I’m not endorsing either - just creating a place for us to handle pros/cons of the ideas that have been surfaced in other conversations):

Should the 0x36 DAO have a formal foundation for entering into agreements in “meatspace”?

This is a common practice across some DAOs, with differing amounts of authority or agency granted to these groups depending on the needs of the given DAO. Creating and empowering a Foundation would be complex, but some have suggested this approach as a way to formalize agreements.

Questions on this approach:
  • How would this group be chosen?
  • By what legal process would it be incorporated, and where?
  • What authority (if any) would it have?
  • What resources would it have?

Should the 0x36 DAO have “subgroups” that are empaneled for specific purposes or time periods?

This is another common practice in DAOs, with these groups being selected or elected by the DAO to function as a coordination layer. These groups can have specialized skillsets and could be as simple as a group of volunteers that help facilitate tasks or projects. This is organically what has happened with the Artis relationship, with a few volunteers from the 0x36 DAO working through some of the more difficult problems with Artis and reporting back progress to the DAO. These can also be as formal as an elected group that serves for a time period with or without a budget from the DAO.

Questions on this approach:
  • What groups should exist?
  • How would the group members be chosen?
  • What authority (if any) would the groups have?
  • Should they be given a budget from the DAO?

The 0x36 DAO could also completely forgo coordination models like this and continue using the same ad hoc response to proposals that we currently employ. This is a perfectly viable option as well, with understandable downsides being additional overhead and bandwidth from the delegate body when reviewing the forum and proposals independently.

I encourage everyone with experience in these matters to offer feedback or thoughts on these ideas as we divine the path forward for the 0x36 DAO. The options above can be expanded with any other suggestions as this conversation unfolds.

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Separating my personal response into a reply -

On the subject of a Foundation, I’d say that would be a difficult and highly complex thing to enact here, and I’m not sure I’ve seen the need for this. I think the 0x36 DAO should pursue better and more refined processes around asset allocation that would allow for more onchain tools that would require less trust, therefore lessening the need for formal “meatspace” agreements. Even if this is a bridge that needs to be crossed, it can be postponed for now.

On the subject of smaller workgroups, I think something like this could benefit the DAO by providing better facilitation and coordination. These groups tend to have specialized skills and are able to devote time and attention to processes or proposals. They don’t necessarily have to have formal authority in any way, but their mission can be to simply help find consensus and signal when delegates attention is needed for action to be taken.

My initial suggestion would be to start small and select a group of volunteers (perhaps 3, 5, or 7 members) to function as a facilitation group for a very short period - perhaps a month or two - with their goal being to evaluate these questions and package up some clear proposals back to the DAO that the delegate consensus can then enact as the best path forward. This same group could also be tasked with close oversight of the initial asset transfers and usage from our DAO selected service providers.

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I think Shutter DAO should find a way to solve this alignment or coordination issue. This post is a great start. The topic of MM accountability and representation for the interests of Shutter 0x36 DAO has been discussed multiple times and should have some concrete action taken which would be good all stakeholders involved.

I think having a small working group would be an easier choice since other important stakeholders have also expressed that idea.

Right now such a working group can already have a concrete set of tasks to start with so it would not be governance for governance.

Once enough people have shown interest to join this working group. A multiple-choice vote can be created to codify its existence and its members.

With such a working group, we can answer some important questions: How to have a legally sound contract, should we let Artis use surplus funds to do actively DEX MM which they are also asking us, and also have some oversight on the provider’s performance

A foundation sounds better in the long term which I personally think could be explored but might cost more resources and time to align.

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There should be an entity in my opinion. If the existing one is not a good fit Cayman Foundation or similar can be incorporated for example.

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As a minimum, regardless of everything else, there should be a bimonthly governance call to discuss about upcoming proposals.

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As the DAO is still in the early phase, I suggest to keep it ad-hoc and see who is actively involved in the governance without a formal structure. Formality will come at a point in time. We can look at other DAOs past and see how they evolved. A small group to start with is a good idea but, there should be a “path to let go” to keep power structures loose.

As an early contributor to EthLend (now Aave). Maybe the Aave guardians concept can be of inspiration: Aave Guardians - Governance

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I’m in favor of keeping things as simple as possible to start with. Setting up a foundation adds a lot of overhead for sure, and although it’s nice to be able to go into legal contracts in meatspace, I think and hope it won’t be necessary too often in the future.

I would be happy to see something like the Guardians mentioned above or at least a small group of active people that could also be signers of a multisig that could be used for executing some recurring txs that has already been approved by the DAO. An example could be to pay an incentives pool on a weekly basis or so. Would be annoying to vote for it every week, hence it could make sense to approve the full amount to this multisig and let the signer execute on a weekly basis.

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Ideally, no group would ever have any authority so that the true nature of the DAO can be respected.

If there’s agreement that no legal documents will need to be signed, then the conversation becomes very clean and straightforward.

The only immediate needs that might remain would be more around coordination, facilitation, and communication. These are tasks that may or may not even be needed for 0x36, but they would only serve social purposes for delegates - nothing authoritative.

I’d love to hear what Kleros Labs thinks (@0xAlex).

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It looks like most people prefer to create a small coordination group. This way we don’t have a too big process to start with.

BTW this group should be no way to replace DAO voting just to be clear and should come out of an around of voting results (also should not be an empty group or rubber stamp just for a DAO formality)

Would be great to hear from other DAO members

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deleted as it is a repeated comment due to my browser

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Hi @5pence, thank you for your post. The Artis proposal was definitely a good way to discover these specific needs. As you did, I will split the answer of Kleros Labs into two parts:

On the subject of a Foundation,

Having a foundation can be useful for some legal requirements; however, the main drawbacks we see are the following. First, some people could see this as going against the spirit of the “DAO,” as it creates a central point of authority. Secondly, at Kleros Labs, we believe that pursuing this path could create some extra complexity as there will be two separate entities (the DAO and the Foundation) with different roles and responsibilities.

Another approach could be to seek legal recognition of a DAO with projects like Otoco or MiDAO. At Kleros Cooperative, we have some contacts there and could help if needed. We are not lawyers, and this is not legal advice, but basically, our understanding is it could help protect individual DAO members against Unlimited Liabilities, for example.

In our view, if we want to set up a foundation or have legal recognition of the DAO, we should have a clear need defined. As we are in the first steps of the DAO, we believe this could wait, especially because it might require a lot of time and resources, as mentioned by @han .

On the subject of smaller workgroups,

On this topic, at Kleros Labs, we really believe in such a model of DAOs where small workgroups or committees can be empowered as they are more knowledgeable on the topic or have more time to do due diligence, etc. If we take the recent topic of MM with Artis, this was a technical topic where some community members and delegates were more knowledgeable than others. By having clearly defined committees with power and accountability, we believe the DAO could become more efficient.

In our view, there are some tools that can make this easier. The DAO could have some operational multisigs that are dedicated to some recurring or specific tasks like the GHO Liquidity Committee in AAVE DAO . This could have been used in the MM cases where a multisig could have been created with Artis as one of the signers and other members to keep custody of the asset.

At some point, we can even go further and incorporate tools like Hats Protocol. This would allow Shutter DAO to grant temporary roles and permissions to a working group, with the right to revoke it at any time (have a look at this video to get the idea of such a setup: Hats Modules: Automated Granting and Revocation of Roles. Another tool that could be useful, especially to deal with service providers and security parties, is to use something like a Kleros escrow solution. Basically, the Service Provider and the DAO could agree on some milestones, the payment is in an escrow contract, and if one party disagrees with the other, they could request arbitration on the Kleros protocol (see a short video here showcasing this: Kleros - The justice protocol explainer. )

These tools represent the long-term vision of what can be done to make Shutter DAO more efficient and a trustable partner. In our view, in the short term, there could be a lot of value in electing a small committee, as described by @5pence , for 3 or 6 months to deal with coordination, facilitation, and communication, and also with the relationships with Service Providers. Roles, responsibilities, and the accountability scope of this group should be clearly defined. We would be happy to help with such an initiative and also +1 on the bimonthly governance call mentionned by @miohtama

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I am quite agree with what @5pence said. I do not think we need to have a subgroup to make any decision. But I do think we should 1. have a bimonthly call to discuss the important topic 2. have a group chat for protodao member, kelpers or other contributor to have discussion. Here is more on vote and make decison but we also need more thought share and discussion as well.

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Ok guys it’s been good discussion so far so. I wrote a proposal ( Create a process to manage asset transfer to market making provider(s) - Shutter DAO / DAO Proposals - Shutter Forum) summarize most of mentioned needs/potential role of such group.

Sorry for the delayed for finish up/posting the proposal.

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