Tldr:

• This post is the first of three updates to be provided by Powerhouse this month, covering an update on the overall vision. The next post will focus on our MakerDAO roadmap, and the last on our path to sustainability outside of MakerDAO

• Powerhouse has made great progress in building a Universal DAO Toolkit and shaping up the details of its overall vision, which was further articulated with the team during an offsite in Berlin in May.

  • The Powerhouse infrastructure layer leverages three key pieces of technology: Document models, Event-based architecture and a synchronization protocol

  • DAOs need a holistic approach to organizational data. Powerhouse does process modeling for DAOs and identifies how data should be stored and retrieved, only relying on the blockchain when necessary

  • Powerhouse is pioneering the concept of “Scalable Network Organizations” or SNOs which build on DAOs and onchain governance, but also includes the offchain infrastructure needed to scale DAOs

Powerhouse is an Ecosystem Actor for MakerDAO that was introduced in June 2023 when the former Sustainable Ecosystem Scaling Core Unit (SES) spun off. While governance focuses on what a DAO should do, Powerhouse is focused on how it executes its vision in the most efficient way once it’s decided what to do.

Powerhouse’s mission is to build a universal DAO toolkit with open-source software that optimizes the operations of open organizations. We have four products live - Fusion, Connect, Renown & Switchboard - and another in development (Academy, for DAO training and onboarding)

To learn more about the story of Powerhouse, check out our two previous updates to the MakerDAO community:

• An extensive product and roadmap overview in November 2023

• A community call in January for the Regenerative Finance AVC.

The Powerhouse team gathered during Berlin Blockchain Week for an offsite in May. This was the first time many team members had met in person, so it was an opportunity to move forward on the technical, product and legal front.

At the end of our time in Berlin, Powerhouse hosted Power Brunch at Full Node to showcase the work we’ve done during our offsite. These presentations give a detailed overview of the technology and operational philosophy behind Powerhouse.

Watch the full Power Brunch recording here​📺.

The rest of this post is focused on three ideas presented there:

• Powerhouse Infrastructure Layer - the core technologies that underpin the Powerhouse Universal DAO Toolkit

• Powerhouse Processing Model for DAOs - the philosophy behind how Powerhouse views organizational data and its interactions with the blockchain

• Beyond DAOs: Scalable Network Organizations - the business model and legal framework to enable decentralized organizations to build and operate products on a global scale

Powerhouse products are foundational building blocks that organizations can use to customize to their specific needs. As such, the Powerhouse products are first and foremost, developer-facing products that will be used to optimize operational processes for large organizations to interact with contributors, community members and users.

These products work seamlessly together and share several common technologies between them, particularly Fusion, Connect & Switchboard. Three key technologies tie these products together and make it easy for organizations to scale their data gathering and visualization capabilities using Powerhouse:

• Document models

• Events-based architecture

• Synchronization protocol

Document models are a common architecture and design choice for complex systems when dealing with structured data. All data in the Powerhouse ecosystem is structured as a document model, which means it comes as a pre-loaded template with certain rules baked in. In a recent presentation Core Dev PM @CallmeT likened Document Models to recipe books.

Document models ensure that organizational best practices are embedded into software. This ensures less friction in onboarding new contributors and provides appropriate boundaries for long-term contributors to prevent errors. This helps move management from “Don’t mess up” to “Can’t mess up”.

Document models can also be reused or forked by other organizations. All Powerhouse software is open-source. Common organizational tools from payroll, grants program management to a DAO address book can all be built as a document model. Other organizations can leverage these existing packages in Powerhouse’s “app store” or build additional features for their organization’s needs.

The second key technology Powerhouse employs in its design is how new data is recorded, employing an event-driven architecture (also referred to as event sourcing). To change a document model, rather than store a new state, the changes are noted by publishing events (or operations) of the specific updates to the document. When viewing the document, all operations (or events) are performed and the end state is the current version of the document. This is similar to Google docs, where every keystroke is marked as an edit that can be viewed and previous versions can be restored. In Powerhouse, every action has a corresponding operation, which is similar to a blockchain transaction.

Synchronization Protocol

A fact of life for DAO operators has been the necessity of centralized software to coordinate with other DAO contributors and stakeholders. Many DAOs operate on Google’s Office Product Suite because it allows for easy, simultaneous editing of spreadsheets, word processing and all documents. Never mind this means ceding DAO sovereignty to the googlers in Mountain View. Powerhouse architecture is built to allow this same collaboration but without the centralized servers, enabling P2P coordination with P2P communication.

Using events-driven architecture means that only new operations need to be synced, rather than the entire state.

To dive deeper into the products and the technical architecture, check out @CallmeT’s presentation at Power Brunch on Scaling Distributed Computing for Decentralized Operations

Powerhouse’s ambition is to be core operational infrastructure for scalable organizations, so it’s not enough to just be decentralized. The infrastructure is meant to power applications used by billions of users and truly compete with Web2. That means understanding when to use a blockchain and when that can hinder an organization’s ability to scale.

Not all organization data is created equally, and too often DAOs have rushed to put everything onchain and then complain about high costs and slow operations. Powerhouse’s experience with MakerDAO gives it unique insight to provide solutions that maintain decentralization, without sacrificing performance.

All data is not created equally and should not be treated the same by the DAO. Powerhouse builds organizational data models with three categories of DAO data.

First is private peer-to-peer collaboration. In Powerhouse’s Connect application, every user can have their own private and secure workplace. This can also extend to another collaborator or maybe a team that’s all working together who want to share their work with other members of the team but not yet bring it fully out to the public. Transparency is vital to DAOs, but contributors need to be able to do some work without the community constantly peering in.

The second category for DAO data is when it enters the public space. Powerhouse’s Fusion and Switchboard are tools for publishing data for public consumption. Fusion creates easy to use dashboards for an organization’s most important data. It connects seamlessly with Connect, so when new data is inputted, it’s automatically updated in Fusion. Fusion can be utilized for community dashboards, but for those wanting to take a deeper dive into an organization’s data, Switchboard offers an Open API with a GraphQL environment, allowing data scientists and other developers to query data easily.

The last category of DAO data is for the most important DAO data that requires enshrinement into the blockchain. For most DAOs today, “put it on the blockchain” sums up their operational strategy. While this may provide security today, it sacrifices scalability long-term.

While many DAOs use the blockchain as the source of truth, what Powerhouse offers is an integrated data solution that ensures your data has gone through the necessary steps before blockchain enshrinement. These tools allow for private work, team collaboration and other pre-consensus data operations to occur alongside interactions with the blockchain.

For more, check out Powerhouse founder @wouter/Prometheus’s “The Price of Consensus” talk at Power Brunch

Powerhouse conceived of a DAO toolkit that could streamline MakerDAO operations, but also to design organizational structures that could be run on an open-source software as a model for all DAOs. This has led us to think more broadly about what organizations of the future will look like. What we’ve found, however, is that a DAO is just one component of what we are calling Scalable Network Organizations (SNO). Whereas a DAO is an onchain governance entity, a SNO includes this onchain entity but also interlinks with all of the other offchain infrastructure needed to build a product and bootstrap a network.

Powerhouse’s ambition is that SNOs can be the structure that builds a decentralized, Uber, Etsy or other software-based marketplaces, where a centralized entity has complete control over a network, rather than those who make up the network. What are some other characteristics of a SNO?

• Open and transparent - SNOs are freely accessible with a gradual on-boarding path, using open-source software and open data

• Software platform - the core product is some scalable marketplace platform and the organization has its best practices embedded in software and a moving towards progressive automation

• Decentralized - ownership, operations and infrastructure cannot be coopted by a single entity, producing zero lock-in to technology or a platform

SNOs require new software infrastructure that is decentralized as well as open-source legal templates for establishing and linking offchain processes together with onchain governance.

While Powerhouse’s software enables organizations to build customized and streamlined processes, only if this software is integrated into offline components can it be truly useful. Powerhouse has leveraged its experience helping MakerDAO to scale as the SES Core Unit to develop a multi-pronged legal structure to ensure easy compliance and maximum decentralization.

The model for a Scalable Network Organization (SNO)

This model connects:

• DAO - onchain organization with wide, distributed ownership

• Operational Hub - how individuals and other DAO service providers get paid in compliant way

• Operational Collateral Fund - conduit for investors to invest in promising projects based on operational capability and future revenue

• Revenue Generating Hub - the sales arm of the SNO, responsible for taking in fiat revenue or other consumer facing needs

• IP-holding entity - a legal entity that just holds the IP of the SNO, similar to the Dai foundation

To learn more about Powerhouse’s approach to open-source legal templates, check out @layerzero’s talk from Power Brunch

This is the first of three update posts from Powerhouse. The next one will focus on all of the work Powerhouse has done for MakerDAO and the last post will talk about our future path to sustainability.

If you’re interested in learning more, jump into our discord, follow us on our (newly active) X/Twitter profile and check out our recently updated website.