• DAOs, or decentralized autonomous organizations, are a new, experimental method to align members. Often these members bond over a shared purpose, accompanied by incentives to support. The community members can choose to contribute any combination of resources to a DAO. DAO contributions can come from time, work, money, etc. Assistance does not have to look like a simple job description and can come in any form. Suppose somebody believes the community or the DAOs majority no longer aligns with the original vision of the DAO. That person can propose a governance proposal and spark the conversation regarding a specific change.

• Traditionally, companies and ideas have started with one person. A tiny group of people brings an idea to life. Scaling can be complex, and staying lean in the early stages of building a company is commonly seen as a wise decision. DAOs instantly align large groups of people and communities by flipping this idea on its head. A publicly visible set of rules govern the members, and hierarchy is determined on-chain. Including everyone in governance typically forces a tradeoff; transparency can be difficult for operating teams who strive for speed. Decisions must be made quickly, and heavily disputed topics often drag themselves out or come to a stalemate - where managers are typically in place to make a final decision. However, DAOs can decide to put the issue (i.e. proposal) to a vote. This is where the token allocation becomes critically important. If the founders hold a majority of the tokens, they can override all decisions and silence the community. However, if they feel passionately about a certain decision, who is to say they are wrong? For the projects struggling with overrepresentation for early adopters, one potential solution lies with the idea of progressive decentralization. Over time as the community becomes more engaged and more structure is in place, you can offload more of the decision making to the community.

• Transparency in decision-making is a critical step forward for groups sharing a central goal. The more on-chain your decision-making, the more your community will trust its leading members and view the voting process in a fair and honest light. Since any community member can submit a proposal, conversations should continue to align with the the central vision, as well as all parties involved. Some DAOs reward users for taking increased on-chain measures, such as staking an ERC-20 or ERC-721 token. The space is seeing more and more governance recorded on-chain instead of being decided in an isolated board room.

• Creative distribution for DAOs is one of the most exciting, revolutionary possibilities for aligned groups. Whoever writes the smart contract for the DAO can program

  1. the maximum supply of tokens

  2. the exact type of tokens released

  3. the emissions rate of the tokens, and

  4. the perks of membership behind the token(s)

• This sense of freedom allows any distribution style to occur, and as of 2022, we have seen many different models. The current models are far from perfect, yet the open-source nature of crypto allows projects to bootstrap the best ideas and continue to iterate, choosing the best ideas from previous models.

• A manager no longer has complete authority over decision-making. DAOs allow the community to take more initiative in governance proposals and select specific, aligned tasks. The low barrier for entry allows for a more inclusive and transparent view of DAO operations but also comes with weaknesses. Potential weaknesses include a dominant group of early adopters controlling a majority of governance voting power, free-riders, roadblocks for operating teams, and unknown regulatory risks. DAOs are currently in an experimental phase with innovators leading the charge, and "best practices" are yet to be laid out.

• With most markets, ideas, and projects, a natural cycle emerges. Many ideas are presented, ~95% will not survive, and the ~5% will merge or survive independently to serve as a benchmark for experimentation and iteration. DAOs will continue to define their niche and become more specialized over time. As of now, we have seen DAOs serve a specific purpose (usually through acquisition), as a means to facilitate coordinated investments, and as a network for people to meet like-minded individuals to brainstorm the next revolutionary idea.

https://twitter.com/0xmaxyz/status/1491126316888133633?s=20&t=QrWggnmmnBhiWIvlq7GjuA

• Some promising DAO’s that serve as inspiration are listed below:

  1. Nouns DAO:

     1. Each day, forever, Nouns DAO auctions off an NFT with 100% of the funds going to the treasury. Each NFT serves as one vote in all governance proposals over the treasury. (currently, the treasury contains 26,958 ether)

  2. Bright Moments DAO:

     1. Bright Moments DAO is navigating the globe with 10,000 NFTs, 1000 minted in a new city, each serving as proportional membership in the DAO. With a focus on generative art partnerships and IRL minting experiences, the DAO connects crypto-curious, technical, and artistic supporters.

  3. Constitution DAO:

     1. Gaining headlines in late 2021, Constitution DAO raised $42 million in under a week with the shared goal of purchasing the US Constitution. The bid did not win, yet the experiment opened millions of people's eyes to the future potential of DAOs.

  4. Klima DAO:

     1. Klima DAO has created a decentralized, open market for offsetting carbon. Currently, users of Klima DAO have absorbed a total of 15.72 million tons of carbon. You can use the native token to participate in governance or burn it to offset emissions.

• Legacy club infrastructure is problematic in three main areas:

  • Funding mechanisms:

    Schools give a set budget to help students cover expenses for general meetings over the year, paid quarterly or semesterly. This money typically goes towards club incentives, outreach, etcetera. Rather than formally applying to this program, more specific grants and funding exist externally. Instead of getting a lump-sum amount, university DAOs can raise funds externally for a particular event, propose and vote on a predetermined fundraising amount, and bypass the institution-capped limit.

  • Outside Action and Travel:

    Taking action(s) outside campus require thorough and strict planning schedules. Travel schedules often require at least six months' notice, which can be severely limiting in the crypto world. Many conferences and events are planned (or created) under that requirement, and clubs cannot gain funding to travel or have to pay out of pocket. Blockchain at Cal Poly has run into this exact problem - and we want to solve the problem for our club and all future and present blockchain groups. Schools often have the budget and resources to support them, but they are largely inaccessible from a practical standpoint. While this may not be the case forever, DAOs serve as a way to bypass much of the bureaucracy found on college campuses.

  • External Participation:

    • External coordination among a student club can be troublesome. More specifically, student clubs often use a combination of methods to interact with alumni and community members. This list consists of outdated emails, old phone numbers, social media profiles, and connections via friends. Typically, you have to deploy various sales tactics, many of which alumni do not enjoy.

    • Clubs are currently very isolated, contrary to the core pillars crypto stands on. Student clubs typically host meetings, and students work on highly innovative and exciting projects behind closed doors. Democratizing access to these clubs provides immense value for all parties involved.

      1. Alumni gain a more transparent view of internal projects.

• Blockchain @ Cal Poly has been fortunate to gain scholarship funds via the Celo Foundation, allowing members to attend international conferences and hackathons. Members have had the opportunity to network with protocol founders and bounce ideas off experienced community members. Without revealing too much, Mustang DAO is planning a hackathon and hoping to bring many different blockchain clubs, university DAOs, and curious students together to continue to iterate on the next generation of the financial system. Additionally, we hope to continue to integrate with the Celo ecosystem through development, education, and community building.

• Some direct perks and activities include:

1. Providing grants to students to use for travel expenses - allowing University DAO members to travel to meet founders, investors, and like-minded individuals active in the blockchain space

2. Transparent on-chain governance decisions are publicly available for all current and future students, supporters, and community members, including the freedom to modify internal team structure.

3. Continuing to propagate education for all members and providing support (both internal and external) for students to define their role(s) uniquely and gain educational and financial support

1. Continue to develop a transparent voting system for operational matters, allocation of funds, and more

2. Provide token-gated mechanism for voting; potentially earned via participation, fundraising support, bounties, research, etc.)

3. Write a second paper discussing existing DAOs, governance models, and provide insight to the overall landscape

4. Write another, more technical paper outlining the steps needed to bootstrap our DAO configuration

• DAOs, or decentralized autonomous organizations, are a new, experimental method to align members. Often these members bond over a shared purpose, accompanied by incentives to support. The community members can choose to contribute any combination of resources to a DAO. DAO contributions can come from time, work, money, etc. Assistance does not have to look like a simple job description and can come in any form. Suppose somebody believes the community or the DAOs majority no longer aligns with the original vision of the DAO. That person can propose a governance proposal and spark the conversation regarding a specific change.

• Traditionally, companies and ideas have started with one person. A tiny group of people brings an idea to life. Scaling can be complex, and staying lean in the early stages of building a company is commonly seen as a wise decision. DAOs instantly align large groups of people and communities by flipping this idea on its head. A publicly visible set of rules govern the members, and hierarchy is determined on-chain. Including everyone in governance typically forces a tradeoff; transparency can be difficult for operating teams who strive for speed. Decisions must be made quickly, and heavily disputed topics often drag themselves out or come to a stalemate - where managers are typically in place to make a final decision. However, DAOs can decide to put the issue (i.e. proposal) to a vote. This is where the token allocation becomes critically important. If the founders hold a majority of the tokens, they can override all decisions and silence the community. However, if they feel passionately about a certain decision, who is to say they are wrong? For the projects struggling with overrepresentation for early adopters, one potential solution lies with the idea of progressive decentralization. Over time as the community becomes more engaged and more structure is in place, you can offload more of the decision making to the community.

• Transparency in decision-making is a critical step forward for groups sharing a central goal. The more on-chain your decision-making, the more your community will trust its leading members and view the voting process in a fair and honest light. Since any community member can submit a proposal, conversations should continue to align with the the central vision, as well as all parties involved. Some DAOs reward users for taking increased on-chain measures, such as staking an ERC-20 or ERC-721 token. The space is seeing more and more governance recorded on-chain instead of being decided in an isolated board room.

• Creative distribution for DAOs is one of the most exciting, revolutionary possibilities for aligned groups. Whoever writes the smart contract for the DAO can program

  1. the maximum supply of tokens

  2. the exact type of tokens released

  3. the emissions rate of the tokens, and

  4. the perks of membership behind the token(s)

• This sense of freedom allows any distribution style to occur, and as of 2022, we have seen many different models. The current models are far from perfect, yet the open-source nature of crypto allows projects to bootstrap the best ideas and continue to iterate, choosing the best ideas from previous models.

• A manager no longer has complete authority over decision-making. DAOs allow the community to take more initiative in governance proposals and select specific, aligned tasks. The low barrier for entry allows for a more inclusive and transparent view of DAO operations but also comes with weaknesses. Potential weaknesses include a dominant group of early adopters controlling a majority of governance voting power, free-riders, roadblocks for operating teams, and unknown regulatory risks. DAOs are currently in an experimental phase with innovators leading the charge, and "best practices" are yet to be laid out.

• With most markets, ideas, and projects, a natural cycle emerges. Many ideas are presented, ~95% will not survive, and the ~5% will merge or survive independently to serve as a benchmark for experimentation and iteration. DAOs will continue to define their niche and become more specialized over time. As of now, we have seen DAOs serve a specific purpose (usually through acquisition), as a means to facilitate coordinated investments, and as a network for people to meet like-minded individuals to brainstorm the next revolutionary idea.

https://twitter.com/0xmaxyz/status/1491126316888133633?s=20&t=QrWggnmmnBhiWIvlq7GjuA

• Some promising DAO’s that serve as inspiration are listed below:

  1. Nouns DAO:

     1. Each day, forever, Nouns DAO auctions off an NFT with 100% of the funds going to the treasury. Each NFT serves as one vote in all governance proposals over the treasury. (currently, the treasury contains 26,958 ether)

  2. Bright Moments DAO:

     1. Bright Moments DAO is navigating the globe with 10,000 NFTs, 1000 minted in a new city, each serving as proportional membership in the DAO. With a focus on generative art partnerships and IRL minting experiences, the DAO connects crypto-curious, technical, and artistic supporters.

  3. Constitution DAO:

     1. Gaining headlines in late 2021, Constitution DAO raised $42 million in under a week with the shared goal of purchasing the US Constitution. The bid did not win, yet the experiment opened millions of people's eyes to the future potential of DAOs.

  4. Klima DAO:

     1. Klima DAO has created a decentralized, open market for offsetting carbon. Currently, users of Klima DAO have absorbed a total of 15.72 million tons of carbon. You can use the native token to participate in governance or burn it to offset emissions.

• Legacy club infrastructure is problematic in three main areas:

  • Funding mechanisms:

    Schools give a set budget to help students cover expenses for general meetings over the year, paid quarterly or semesterly. This money typically goes towards club incentives, outreach, etcetera. Rather than formally applying to this program, more specific grants and funding exist externally. Instead of getting a lump-sum amount, university DAOs can raise funds externally for a particular event, propose and vote on a predetermined fundraising amount, and bypass the institution-capped limit.

  • Outside Action and Travel:

    Taking action(s) outside campus require thorough and strict planning schedules. Travel schedules often require at least six months' notice, which can be severely limiting in the crypto world. Many conferences and events are planned (or created) under that requirement, and clubs cannot gain funding to travel or have to pay out of pocket. Blockchain at Cal Poly has run into this exact problem - and we want to solve the problem for our club and all future and present blockchain groups. Schools often have the budget and resources to support them, but they are largely inaccessible from a practical standpoint. While this may not be the case forever, DAOs serve as a way to bypass much of the bureaucracy found on college campuses.

  • External Participation:

    • External coordination among a student club can be troublesome. More specifically, student clubs often use a combination of methods to interact with alumni and community members. This list consists of outdated emails, old phone numbers, social media profiles, and connections via friends. Typically, you have to deploy various sales tactics, many of which alumni do not enjoy.

    • Clubs are currently very isolated, contrary to the core pillars crypto stands on. Student clubs typically host meetings, and students work on highly innovative and exciting projects behind closed doors. Democratizing access to these clubs provides immense value for all parties involved.

      1. Alumni gain a more transparent view of internal projects.

• Blockchain @ Cal Poly has been fortunate to gain scholarship funds via the Celo Foundation, allowing members to attend international conferences and hackathons. Members have had the opportunity to network with protocol founders and bounce ideas off experienced community members. Without revealing too much, Mustang DAO is planning a hackathon and hoping to bring many different blockchain clubs, university DAOs, and curious students together to continue to iterate on the next generation of the financial system. Additionally, we hope to continue to integrate with the Celo ecosystem through development, education, and community building.

• Some direct perks and activities include:

1. Providing grants to students to use for travel expenses - allowing University DAO members to travel to meet founders, investors, and like-minded individuals active in the blockchain space

2. Transparent on-chain governance decisions are publicly available for all current and future students, supporters, and community members, including the freedom to modify internal team structure.

3. Continuing to propagate education for all members and providing support (both internal and external) for students to define their role(s) uniquely and gain educational and financial support

1. Continue to develop a transparent voting system for operational matters, allocation of funds, and more

2. Provide token-gated mechanism for voting; potentially earned via participation, fundraising support, bounties, research, etc.)

3. Write a second paper discussing existing DAOs, governance models, and provide insight to the overall landscape

4. Write another, more technical paper outlining the steps needed to bootstrap our DAO configuration