We are living in amazing times. As the global elite is gathering in the remote Swiss town of Davos this week to decide the future of humanity, meanwhile a group of talented and passionate individuals are building the first truly decentralized, participatory and global democracy: Democratic Decentralized Autonomous Organizations (or DDAOs, for short).

Two DDAOs (maybe the only ones in the space at the moment) that attract our interest are Proof of Humanity DAO (PoH) and Humanity Unchained DAO (HUD). We will now explain how they work and compare to each other.

Proof of Humanity DAO

As explained by this post from Kleros (the team behind the creation of Proof of Humanity), “Proof of Humanity DAO is the first ever truly democratic 1-person-1-vote governance system with open participation”. It is powered by Proof of Humanity, a sybil-resistant identity protocol that allows to create a list of Ethereum addresses owned by different humans. We recommend to read the Kleros post and their documentation for more details in how the registration process and the app work.

User interface

Voting

All relevant decisions of the DAO are discussed prior voting, generally on the forum, Telegram and Discord, and then been voted using Snapshot, which is an off-chain voting platform. This inevitably requires that trusted members of the community manually do the on-chain settlement of the voting result.

Recently, a major initiative is being carried out which consist of the election of a Mission Board, the purpose of which will be to agree on the direction the project must take in terms of goals, milestones, resources, etc.

At the time of writing, the provisional outcome is the following:

Tokenomics

Proof Of Humanity launched together with Democracy Earth the Universal Basic Income (UBI) token. The Universal Basic Income (UBI) token aims to provide a source of wealth for humans to sustain their basic needs. The reader may visit the PoH website for more information on the mechanics and goal of the UBI project. To be eligible to receive the token, the receiver needs to be verified in PoH, thus UBI serves as an incentive for humans to register their identity in PoH.

Buy force: Buying and burning UBI tokens has been the main driver to pull the price of UBI up. The UBI tokens are bought with half of the yield generated by yearn Finance on DAI, WETH and WBTC deposits in a specific vault.

Sell force: The token is intended to be spent by humans as a complement of their income, therefore a relatively strong sell force is expected by design as holders with less financial resources need to liquidate their UBI tokens to cover their basic needs. This would not be needed if the token remains in the system instead of being exchanged for other more liquid tokens or currencies. Increasing the utility of UBI has been on of the goals of the PoH team, that is, make it possible for UBI to be spent for goods and services directly. A marketplace, Yubiai, is created for that purpose.

The following chart shows the evolution of the UBI/USD price over time:

Supply: The UBI token issuance is 1 UBI / hour / human, currently reaching ~50 million tokens. Despite that there is no cap, the total supply is neither unlimited nor nondeterministic, as it depends on the number of humans ever verified and how long they have been verified. This creates scarcity to an certain degree.

The UBI token can be traded against DAI and ETH in Uniswap:

Humanity Unchained DAO

Humanity Unchained DAO (or HUD, for short) is different to Proof of Humanity DAO in several ways:

• First, as explained in the project’s GitHub page, HUD is a DAO running a semi-direct democracy on-chain in contrast to snapshot.org, which is off-chain. Since HUD is deployed on the Polygon network (as opposed to PoH which is on Ethereum’s mainnet), HUD’s on-chain voting is affordable for everyone as transaction’s fee cost is less than a few cents of a dollar.

  This is how HUD’s semi-direct democracy works: Citizens of the DAO can cast their vote on every proposal directly. Optionally, citizens can delegate their vote to a delegate. Citizens can change their delegate or override their delegate’s vote on a particular proposal anytime. New proposals can be submitted by any member of the DAO.

  HUD uses PoH’s list of humans in order to follow 1-human-1-vote rule. The only prerequisite to become a member of HUD is to be verified in Proof of Humanity. It is important to note that, because of Proof of Humanity and HUD live in different blockchains, HUD smart contracts include an oracle contract that keeps an up-to-date snapshot of the status of PoH’s address registry. The updating process is currently done manually by the DAO itself. In other words, the DAO needs to approve the transaction that updates the oracle.

• Second, the DAO votes transaction proposals, that is, raw transactions. Similarly to a multisignature wallet, if a majority of the members of the DAO approves a transaction proposal then the transaction is released from the DAO smart contract to the destination contract address. In this sense, HUD allows verified humans to collectively interact with any smart contract. Therefore, HUD does not require trusting a middleman or a team to, for example, manage the DAO’s treasury or to upgrade the smart contracts.

• Third, HUD’s token has a fixed supply of 100,000,000 tokens, which initially belong in full to the DAO’s reserve and are progressively released in different ways, as we will explain later. But most importantly, the DAO has full control over the token, which means it can, if the community approves so, revert transactions or lock funds. The rationale behind this is that the DAO is sovereign and therefore can implement justice enforcement by controlling the flow of HUD tokens, if the DAO decides to do so. This is a crucial feature that, we believe, needs to be well-understood by the community as it is a double-edge sword, as we will explain later on.

HUD has a limited number number of delegate seat. There are 20 seats initially, but more can be added via democratic voting. Only delegates with most citizen appointments can opt to sit on a seat. As citizens can change their appointed delegate anytime, the traditional concept of elections does not exist in HUD. Instead, delegates compete for citizens support continuously. However, it is important to note that citizens do not need to appoint a delegate as they can always cast their votes directly.

User Interface

HUD’s web app is basically a dashboard consisting of different panels serving different purposes such as list of proposals, tallies (or proposal votings), delegate seats, token parameters, user’s HUD balance, etc. The best way to understand how HUD works is probably trying it yourself or watching the tutorial videos.

Voting

Just like PoH, HUD uses a forum for general discussions. With regard to voting, only members of HUD, that is, citizens and delegates, can effectively participate by submitting transaction proposals, casting votes and executing approved transactions. Any human verified in PoH can join HUD, as a citizen, as a delegate or as both. Becoming a citizen or a delegate is as simple as pressing the corresponding button.

As explained here, the voting process consist of 3 steps:

Step 1: A transaction proposal is submitted for review

For the sake of example, let us imaging that the community wants to pay a freelancer 100 HUD tokens for some work. In this example, the transaction proposal would be a send 100 HUD tokens from the reserve address to a specific wallet.

Now, any member of the DAO can submit a transaction proposal by calling the submitProposal function with the corresponding transaction bytecode. Currently, this operation can only be done through the command line.

Step 2: The community votes on the transaction proposal

The voting process is divided into two phases: deliberation and revocation. Delegates cannot cast votes during the revocation period, only citizens. This guarantees citizens the chance to push back any decision from the delegates. Therefore, citizens can always have absolute control over any decision.

Step 3: The transaction is approved and executed

If the final result of the proposal voting is Approved, the transaction can now be executed.

Like most blockchains, for a transaction to be executed, a gas fee need to be paid which, for large transactions, can be expensive. Now, who should pay this fee? The proposer of the transaction? The last voter? Maybe a middleman? It seems that the best solution to this problem is that the DAO outsources the execution of transactions to the market. In other words, anyone who is willing to pay for the gas fee will be rewarded with a certain amount of HUD tokens. This is done by calling the enact function.

As the price of HUD against other tokens varies over time, so the number of HUD tokens to be paid increases over time up to a certain limit. Executors can decide what HUD price they are willing to pay by waiting and calling to enact function when they expect to make a profit. Currently, this operation can only be done through the command line.

HUD contracts also support Snapshot as an off-chain voting tool, just like PoH does.

Tokenomics

Initially, all tokens belong in the DAO’s reserve. By default, there are 3 ways the tokens become in circulation. Of course, in addition to these ways, the DAO can approve sending tokens out of the reserve address for different purposes. The 3 ways are:

• Delegation reward: Seated delegates are paid a number of tokens proportional to their voting power every second.

• Execution reward: As explained before, the proposals are blockchain transactions to be executed if approved by the DAO. The DAO rewards with HUD tokens to whoever is willing to pay the gas fees needed for the transaction's execution. The number tokens increases for every new created block up to a limit defined by the DAO.

• Referral reward: HUD members can refer other humans. The reward for that is, currently, 50 HUD tokens for both the referrer human and the referred human. Any human verified in PoH is eligible. The referred just needs to submit the address of the referrer by clicking on the Claim button:

All the parameters related to the DAO, including those related to rewards, can be visualized in the Parameters panel, and changed through democratic voting.

Buy force: The motivation for humans to buy the token is their need for change in the current global governance system. In contrast to other cryptocurrencies or tokens, such as Bitcoin, that undoubtedly contribute to the financial freedom of humans worldwide, HUD’s utility goes beyond the financial aspect of human live, as HUD’s goal is to build a whole new global governance system, something that Bitcoin, for example, was never intended to do. With this goal in mind, a holder of HUD is would be contributing to the creation of a DDAO governed world by participating in its economy. It is reasonable to expect those humans who passionately seek for freedom, be it for ideological reasons or whose lives have been affected by totalitarianism, such especially the ones affected by the current social and geopolitical context, would seek refuge in HUD.

Sell force: Delegates and transaction executors may sell their reward tokens to finance their operations. The DAO itself will probably need, at some point, to trade reserve tokens for goods and services from third-parties that the community itself is not able to provide.

Supply: The total token supply is fixed to 100 million tokens. The tokens in circulation are expected to increase over time as they need to be transferred out from the reserve to reward delegates, transaction executors and referrals.

Currently, the token can be traded on the 1inch decentralized exchange. To access it, the user just needs to click on the highlighted icon below:

Then check on I understand and connect your wallet (e.g. Metamask). The wallet must be connected to the Polygon network, as it is where HUD is deployed.

Conclusion

Proof of Humanity DAO (PoH) and Humanity Unchained DAO (HUD) are two DDAOs which are very different in nature. In a nutshell, PoH’s primary goal is to create a sybil-proof list of humans and, in order to efficiently achieve that goal, it has evolved into a DDAO to govern itself; whereas HUD is a DDAO that uses PoH list of humans to build a new sort of state running on the Internet, aiming to become the first one of global market of DDAOs that will improve the status of the world.

The following table provides a summary of the characteristics of both DDAOs:

In terms of synergies for collaboration, we see a potential in that HUD offers new incentives for humans to register in PoH, in a similar way that the UBI token has served as an incentive for humans to register in PoH.

NewFreeWorld is a team of individuals who serve as the first delegate of Human Unchained, a Democratic Decentralized Autonomous Organization running a semi-direct democracy on the blockchain powered by Proof of Humanity. Our goal is accelerating the transition of today’s monopolistic global governance system to tomorrow's global free market of Democratic DAOs.

Nothing contained in this project should be considered financial or investment advice. This project is for experimental purposes only. In no event shall the creators or members of the DAO be liable for any claim, damages or other liability, whether in an action of contract, tort or otherwise, arising from, our of or in connection with this project. HUD token holders must be warned that their HUD tokens can be locked or confiscated if the DAO approves so through a democratic voting.