D.E.E.P. A formalised Protocol for the DAO - Part 1 (Opinion and background)



Hello folks

Sorry for consuming two entire threads for this post but one of them (part 2) is actually a documentary contribution, which I wanted to keep "clean" for discussions about the document itself. (I'll post it shortly). This here is about the background and my broader personal opinions about the DAO at the moment. So if you want to "flame" me, post your own rants or generally make interesting political commentary please use this thread :)

What is The Problem ?
In response to various community tensions triggered recently over proposals, proposers and general ideas about "professionalism", I had to go off and have a think for a while. In my humble opinion, the Dash DAO is in SERIOUS need of some kind of a constitution or at least an associated protocol of communication to encourage a more procedural approach to the submission, appraisal and operational reporting of proposals.

The recent Kuvacash request for funding their beta-launch for example, was nothing short of a car crash IMHO. It is a big project and while the proposer in that case made some significant departures from what would be commonly accepted as "best practice communications protocol", the way the community responded was infinitely more damaging given what was potentially at stake. It resulted in a gross over personalisation of the debate, a factioning of community members and left many genuine attempts at due-diligence in informal forums obscured by a cloud of acrimonious jungle politics.

Recent events have also hinted at the potentially more sinister prospect of a "weaponised" DAO where distinct factions use it as a mechanism to mitigate the influence of opposing views by defunding each other's proposals based on weakly argued due diligence priorities and strongly expressed interpersonal aggression.

This trend must be put into full reverse with immediate effect IMO, otherwise we'll lose the involvement of valued professional members of the community in these debates.

Why ?
The monetary support that the DAO provides is generated by miners at great cost to themselves. Mining is an extremely competitive activity with small margins of profit and high levels of risk. We have a duty of care to the mining community who supply the hashpower to the network (and therefore the proof of work which supports the coin value), to spend those funds in the most optimal possible way that adds value to the network.

The consequences of not doing this are potentially disastrous because the return on investment of the proposal system MUST offset the mining cost of the coins, otherwise a vicious cycle will start to take hold where marginal cost exceeds marginal revenue due to the overhead of supporting the proposal mechanism which never comes back to the miner.

The Functional Role of a Constructive Community
Pouring money into black hole budgets on a "cross fingers and hope for the best" basis is not an option for us. Nor, however, is dismissing potentially important proposals on the basis of interpersonal politics because the entire cryptocurrency space is becoming more competitive all the time and there will always be a competitor who uses their resources more diligently. In that regard, significant proposals which have large budgets and potentially "game changing" impact are always going to be controversial. But they also demand the highest quality of debate that focuses on technical arguments of merit, illuminating discussion and honest transparency of information. This means that having a constructive community is not just a "warm and cosy" extra, it's actually a critical component that makes the asset work.

We therefore need to become a WHOLE lot more sophisticated in how we deal with proposers IMO. We also need to become more sophisticated in making well founded technical appraisals of the initiatives on offer. The challenge is however, how to do that as a disperse community with all kinds of different backgrounds, priorities and business experience ?

IMHO, as a start, we need a common vocabulary of clear terminology, commonly understood points of reference and unambiguously stated priorities with regard to each point of debate. When faced with air turbulence, an airline pilot does not "respond in kind" and go thrashing at the controls in blind panic. They do the opposite and dampen it which allows them to stay in command of the situation by following a well established set of protocols.

A Human Protocol for the DAO
Similarly, we need to start developing a framework with which to asses proposals dispassionately. It should also serve as a basis on which to communicate with each other.

When I vote on proposals, I have an intuitive "checklist" in my head that I follow. I've never really thought much about it because as I say - it's "intuitive". It wasn't until I sat down and wrote out the list that I realised how extensive it was. Consequently, I've restructured the little "checklist" and am submitting it here in a separate thread for general discussion.

If people find it of use it can be evolved and potentially even endorsed with a vote in the DAO itself to give it some authoritative value.

Finally, just to address some obvious points that people may have "out of the gate", I'll do a few pre-emptively here:

1. "Overly Complex"
While this may be true from the perspective of the "awarder" (masternode voter) it isn't true for the proposer. All the points in the protocol "exist" whether they are explicitly discussed or implicitly assumed. Since the proposer is receiving and managing the funds they will also be applying all of the criteria themselves whether consciously or sub-consciously. Bank accounts are involved. Those accounts are "owned" by interested private parties. Expenditures will be made. Those expenditures will be arbitrated over in relation to capital costs (where the value is preserved and potentially owned by the proposer) and service costs (where the value is consumed). In both cases someone's interest will be served. There should be at least enough reporting transparency for the community to determine a satisfactory level of return in this regard.

2. "Overly intrusive"
The protocol is restricted to dealing with the funding allocated by the DAO only. It doesn't require the proposer to disclose their private accounts or other aspects which they may consider confidential. In fact it doesn't even ask for potentially confidential information with regards to the DAO funds themselves (such as specific bank balances etc). It only asks the proposer to account for how the funds have been allocated in very broad terms, sufficient for the community to "learn" over time how budgets are optimally managed

3. "May be restrictive for certain types of proposal"
Compliance with the protocol is voluntary. Also, one of the great things about a "decentralised" system is that it doesn't have to be the "only one". It can serve in 3 potentially increasingly formal roles:

A. masternode voters can adopt it as an informal "checklist" of items to consider and augment their own criteria
B. the community can improve it/create an alternative
C. following from "B", if sufficient consensus evolves around the protocol, it could be submitted for voting and endorsed as an authoritative reference guideline for both "awarders" and "proposers" alike

4. "Compliance involves a lot of work in the area of reporting"
It doesn't really. If the proposer is following the bare minimum of reasonable accounting practice internally, producing the 3 statements in the protocol each month involves very little work.

I'll post the proposed protocol in a separate thread labelled "part 2" for people to comment on. (I've done that so that it appears as the top post, not obscure by this one).

Regards !

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Active Member
May 29, 2017
@toknormal -- I've been meaning to respond to these for some time now, but just now getting around to it. I absolutely agree with your assessment of the problems the DAO faces, as well as the incredibly complex and nuanced nature of navigating the DAO and its responsibilities, as well as the dire need for professionalization of its operations and participants.

1. This should hopefully be addressed by the proposal creation system built in to Nexus which allows for much more thorough and detailed proposals. The way the workflow of the Nexus proposal creation system is designed encourages POs to include KPIs, Metrics, and itemized budget, as well as milestones and reporting after a proposal is launched, which will hopefully make the work of Dash Watch and continued due diligence by the MNOs much more efficient.

2. This issue has only come up a handful of times, but yes, expectations and general best practices/policies should be set in place for how intrusive our requests for budget accountability should be.

3. Sure, all schemas and rubrics and value systems have their limitations in terms of contextual viability. As long as it remains a "living document" so to speak, subject to change and asterisks, I don't see the harm in its use and inclusion.

4. Nexus should make compliance much easier. When proposals are built from the Pre-Proposal stage (now called "Concept" stage in Nexus) with many of these factors already in mind, the normalization of this level of reporting decreases the likelihood that a great deal of work/effort will have to go in to retrofitting existing or long-standing proposals with proper information.

Additionally, I'd recommend you have a sit down with both Jeffh and Yuribear from Dash Nexus and some of the staff from Dash Watch (Paragon, Gethen, etc), and take the time to understand their plans, goals, and processes, because there's a lot of overlap and commonalities they've already anticipated in their designs and protocols.

Several of us have already begun to undertake various initiatives to improve the DAO/PO relationships and process in ways that you might find interesting. I'd be happy to include you in those discussions and initiatives as well if you'd like.
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Thanks for your informative reply @Arthyron . Both Dash nexus and Dash Watch are doing some very interesting things. I'll take a closer look.

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