This article is meant to explore the functionalities DAOCrossing could have to help DAO founders and contributors navigate through chaotic and massive coordination issues powered by web3 technology.

It’s amazing to see what web3 can do to facilitate a group of people from the bottom up and make the flow of information transparent and universal across any platform built on the blockchain. But the bigger question still remains unresolved, or at least it is still largely a work-in-progress — the issue of cooperation and coordination among a group of people.

I will use my first-hand experience as an IRL co-living community builder and the other co-founder, Nico’s community building experience as a council in CityDAO, to navigate the issues we have encountered in our journey. I will also use some of the other DAO I have shallowly participated in to bring awareness to the key issues that prevent us to have a sustainable and successful DAO or NFT membership.

The reason I put DAOs and NFT membership together is that I often find the boundary that distinguishes between the two is often very blurry, and a lot of the strategies they are using are usually very similar, if not overlapping completely with each other. For example, CityDAO uses NFT as proof of their membership, while POPis trying to operate like a DAO by letting its members submit ideas, even though both models didn’t work out too well so far. I will try to identify some potential issues and solutions in the discussion below.

What I Can Get From It vs. What Speaks To Me

Contrary to NFT membership, DAO is usually very unclear about what kind of perks it can provide to its contributors and members. For most people, life is already annoying enough that a person cannot be a core member for more than 2 DAOs. We just don't have the bandwidth. Similarly, in the DAO's perspective, each DAO should assume that only 10% of the people will actively contribute to the DAO, 85% will be assuming a more passive role just like NFT members, and people in between who want to join and participate but only have limited time and don’t know how. As result, they need different business strategies for different people in the spectrum.

However, most of the DAOs I have seen usually don't have any concrete business model to reward the 10% contributors, let alone the 90% people who can potentially be their "shareholders" to support them in the long run. These DAOs rely on the idea of "what speaks to me" (personal subjective ideology or values) to attract people to do works for them, often with lower than market value or simply work for free.

If we look at a typical NFT membership, it operates on the idea of "what can I get from it", and fully recognizing that they’re selling products or services to the people. It can be social status/capital, gift/perks, access to virtual land or actual events, or the feeling of belonging, you name it, and it can be both intrinsic and extrinsic rewards (whether or not they will realize those promises is another story).

2 Successful Case Studies vs 2 Not Quite There Yet Case Studies

I’ll present 4 case studies from my own experience in the DAO/NFT membership I have participated in and talk about the what are the patterns of a good DAO organization. Additionally, I’ll also map Yukai’s Octalysis gamification framework to map to each of the organizations I mentioned below. The top half is usually called white hat motivation, games that usually leave people fulfilled. The bottom half is black hat motivation, games that usually leave people with meaninglessness and voidness.

Case Study 1 - JuiceboxDAO - Meaning, Accomplishment, Empowerment, Ownership, Social Influence

JuiceboxDAO has a concrete business plan to start with, which is the 2.5% platform fee they would get from the project posted on their web app. The core contributors are also the business partners, it has a clear idea about what each of the core members is responsible for and is transparent and flexible about its compensation. It’s a good prototype for the future of work, where big corporation disintegrates into small and cohesive groups. Everyone can vote to bring people in, or vote to raise the compensation, and everyone can build a closer relationship with other people in the same DAO.

It’s one of the few DAOs that can actually pay people with above-market wages for its contributors, building the actual products, and is sustainable. They have an open town hall where everyone can hop in and share their insights, a blog, and a podcast, which helps to reduce the distance between the core contributors, project creators, and the public.

Case Study 2 - Poolsuite NFT membership - Scarcity, Social Influence, Ownership

The original prize of this membership is about 0.3 ETH, and now the prize is around 1.5ETH. One of the few NFT members that break the curse of high start and low end. From their Apple wallet membership card to their perks page, it shows a very mature design for its membership experience. Their webpage, blogs, and derived products are highly gamified (meaning they are fun to play with) and have their own consistent aesthetics, and they keep delivering member perks and their promised product (leisure experience) once in a while to keep their NFT at a good floor price.

Case Study 3 - CityDAO - Ownership, Social Influence, Meaning, Empowerment

CityDAO is one of the first DAO that initiated an experiment where it tried to tokenize actual land in the real world. However, it underestimates the complexity of facilitating communication among different people. The degree of miscommunication usually grows exponentially as the number of people involved in the conversation went up. Having multiple people owning the same piece of property is nothing new, and is already lawfully permitted in the current judicial structure, but most of the time no one wants to buy the property with strangers and even if they do, it didn’t end up well. Why? Because people just hate each other. Okay, let’s be serious, if you have studied non-violent communication, you know what I’m talking about. For centuries, so many tragic happen because people just can’t communicate effectively with each other.

Building a city and coordinating the needs and egos of thousands of people is just nearly impossible. It’s not something that a bunch of engineers can resolve. It takes anthropologists, psychologists, sociologists, architects, attorneys, and people who can communicate like a saint to even just make a little bit of progress. Nevertheless, it’s a cool experiment and people I met in CityDAO gatherings are awesome.

Case Study 4 - POP NFT membership - Scarcity, Unpredictability, Avoidance

As an info hub meant to provide valuable information to its members, the only successful thing it did is creating hype to sell its membership at 3ETH to 2777 people and perhaps generated another considerable amount of royalties from people who resold their membership because it was too bad (it would be genius if this is their actual plan). If discord is noisy enough, using telegram sub-chats is just a different level of chaos.

Let’s face it, a club with 30 close friends sharing valuable information is totally different from managing a club of 3000 members with new people coming in and out every day. Dealing with information noise, talent matching, and coordination still remain the biggest issue even for those well-managed DAOs or NFT clubs. And that’s why DAO tooling product has their own category. It also mostly operates (like a lot of other NFT clubs) on the black hat motivation, where it plays with people’s fear of scarcity, and greed for unpredictable rewards.

The Patterns

1. Small core team size: For a successful DAO, the size of its core contributors should be inevitably small. Of course, if a DAO is really growing big, people can spin out and create sub-DAOs while still sharing the resources from the main DAO, but then they can be treated as a different entity. For each unit of the DAOs (e.g. guilds), the number of the core contributor will and should remain small. It means that as a DAO contributor, you shouldn’t be talking to more than 10 people about something you’re working on.
2. Clear business model: No matter if it’s for-profit, non-profit, or just a passion project you trying to experiment with to see where it takes you, it needs a clear business model to be sustainable in the long term. Boil down to some very specific and important questions: (1) How do I fund myself and other core contributors? (2) How do I retain people who will be my passive supporters, what benefits can they get? 3) How do I engage people in a meaningful way?
3. Low information noise: We need to know what things people actually care about. Most people don’t want to deal with thousands of messages just to figure out what’s important to them, most people don’t read weekly digest either as high-frequency content usually indicates high noisiness. What we care about is likely the reason we join the DAO in the first place. People may care whether something they build actually serves its purpose. They want to know if they have been treated fairly compared to other DAOs. They want to know the pulse of the community (How many people joined us? How many active members? is DAO still in alignment with my own value and needs?). How to design a good enter and quit system? What are the expectation and compensation for my labor? What important snapshot voting do I need to attend? What does it even mean to me? What’s the value of my vote anyway? When and where are the cool events? What are the schedule and members’ rate of the timeshare and events you promised? When and where to claim my perks? Etc.

Looking Back And Move Forward - Future Directions of DAOs

I think so far I can conclude three different directions a DAO can go.

1. Reinventing Work: A lot of people working in remote web3 jobs actually have similar sentiments and motivation - they are trying to escape from their bullshit corporation job in search of reclaiming their passion and life. In this case, a viable business model is crucial and there are still challenges related to basic health insurance, labor union, and whether it can be recognized as a decent job if say, someone wants to apply for a mortgage.
2. Social Movements: From controversial ConstitutionDAO to ChoiceDAO, people are trying to use the power of web3 to start social movements. Would it be more effective than the traditional movement? If so, how? Would it increase people’s engagement when they can use their NFTs to showcase the values they support? Would they develop some apps that would make charity less likely to be a black box and more transparent as to where the money is being spent? Nevertheless, it’s an interesting area to explore.
3. CSA but for small business or passion projects: Shopify already launches its NFT program open for selected businesses. Because the NFT is built on the same protocols, it means that it will be easier for small business owners to make collaborations with each other. For example, if a person holds membership to two businesses, they will get some rare perks. Membership of this club can trade for something to another club, there are infinite possibilities here.

With all being said, there’s nothing mystical about DAO. In fact, a DAO has existed in the history of humankind for a long time and web3 is not a requirement for a DAO to exist. I think what excites me the most about the emergence of DAO organizations is that people can actually live a life. And the movement of living a good life all starts with this global pandemic. People start to realize how alienated they are at the workplace, and how working from home actually help to make them live more like a human than a machine. They have more time to spend with their loved ones and friends they actually enjoy. They can use all the commute hours to learn a new hobby. Being happy isn’t about six figures and then impulse spending all of them because of the void caused by the meaningless work, but about living in the moment and doing projects that one can actually see its impact. We already have more than enough of what we need and being truly happy and satisfied isn’t really about attending fancy parties and eating fancy food. This is the most attractive part of working in a DAO to me and I hope I can create good DAO toolings and a viable model that can facilitate this movement of reclaiming our life back.

What’s In The Schedule And What DAOCrossing Can Build

What is already on our building agenda:

1. A personal name card with DAO membership and responsibilities (defined by guild treasury wallet).
2. A functionality where DAO can create NFT badges and send them to core contributors.
3. An XP is calculated for each member by pulling on-chain data based on the ERC20 token transaction between the DAO treasury and the personal wallet. It is meant to showcase a person’s reputation in a DAO community. However, ERC20 alone cannot really reflect the true contribution level, the calculation of XP will also integrate things like Snapshot interactions and other customizable contribution tracking mechanisms.
4. A customizable avatar and personal space where you can buy decorating assets by using the XP you have to showcase your personality.
5. A contact book where you can save your other members’ rooms and visit their personal space.
6. A customized DAO space for each DAO to update their important information and reduce discord noise. For example, a whiteboard link to the weekly blogs, a group of small tents representing each guild and connecting to its treasury wallet account, a treasury box pointing to a page where people can redeem their latest member perks, and a congress building that links to the latest Snapshot vote people can participate, a portal link to DAO’s Voxel metaverse, a bank where people can trade tokens and memberships, etc.

What we can build:

1. A metric that measures the “healthiness” of a DAO. Measurements include:
   1. What promise did a DAO make and how much of them actually realized?
   2. What are the participation and execution rates in Snapshot?
   3. What’s the level of diversity and inclusivity in a DAO? What does the culture feel like?
   4. Where did all the money in the treasury go? What does the distribution of money look like?
   5. How well did they treat their core contributors? What is its compensation structure? How is the labor being protected than exploited?
2. Please let us know what are the issues that bugging you as a community builder or contributor and we will be more than happy to hear you out!