Apologies to the audience as this paper is, a little rough, and mostly concept oriented as there are many directions one can go with this in a practical sense. This paper is meant mostly to introduce the topic for discussion not to delineate the exact direction a particular DAO goes when creating their own DAOnetwork. (god help me on formatting… )
For some time after thinking about DeepLiquidity DAO DeepLiquidity - Ideas - 1Hive , to stop communities from pairing their DAO tokens together in LP, I realized a better way for communities to support each other is by building a DAOnetwork. Many of our DAO communities are already supporting each other, with people, funds, development, cross investing, etc. However, when I survey the landscape, these efforts are fragmented and not focused. Below is my vision of how a DAOnetwork can form.
- It is much harder to sybil as a DAO. Put simply, DAOs with their domains, webservices, discord, twitter, etc. are entities that are well known, where as wallets are not. This makes DAOs potentially better citizens than people when it comes to interacting with each other.
- A DAO needs to build it’s own DeepLiquidity DAO DeepLiquidity but can do this with other communities as follows:
- A) DAO1 swaps community Token1 with DAO2 for community Token2.
i) Types of conditions or things that can be done by each community with other community tokens.
a) Can have vesting or vesting conditions. For LP farming, staking, to elect representatives to participate in governance or development/community decisions (or be non-voting)
b) Can be used to be paired into the community DeepLiquidity to earn return as well as be a community investment.
c) Can be used to pay devs in community 1 with Token2 for support and work for community 2
d) For payment for business referrals.
e) For bounties on joint venture projects
- A DAO, by doing a token swap above, diversifies its market exposure, gains community exposure (PR, investment), and potentially supports another community by taking some of its stablecoin cash to provide DeepLiquidity for another comunity, earning that community a return on all the trading as well as possibly more ownership via staking. If communities hold some of the cross tokens, they get full exposure to gains if that community token does well. These relationships can remove Token supply from markets, reducing ‘float’. raise cash too.
- A DAO in a DAOnetwork then has good reason to utilize resources or services of another DAO in the network because they cross own part of that DAO. In fact, it makes more sense to funnel business to a DAO you own than to ‘redo’ or ‘fork’ the work of another DAO. Certainly, they can still make a business ‘deal’, but loosely speaking, given a choice of between services of a DAO in the network or not, it makes more sense to go with in network because this keeps business within DAOnetwork family.
- Every DAO can and should from its own network. The beauty of the DAOnetwork is that it becomes spoke and hub like as communities form their pair relationships with business links, cross investments, people, LP etc. Put simply, a DAOnetwork can quickly become much larger than the sum of the parts due to network effects. Also, as one DAO in the network does well, it will lift the values of their affiliated partners simply due to the cross investing component.
- In principle, the DAOnetwork can take its own treasury assets or fractions of revenue streams and then tokenize those to create a DAOnetwork fund for cross DAO partnerships, lending, borrowing, etc. This allows the network to expand its asset bases and diversify revenue streams and the investment porfolio.
A practical example of a DAOnetwork is 1Hive via the swarms. 1Hive has a number of joint ventures and has effectively formed a DAOnetwork and while there is some cross-asset sharing, seed money placements, talent sharing, etc., nothing has been formalized in terms of the creation of the network. 1Hive has important intellectual property that can be used to grow and formalize their DAOnetwork.
- Honeyswap - a DEX where people can and do trade Tokens and the communities can build DeepLiquidity if they chose to commit to that as a network goal.
- Farming tech - the mechanics to incentivize farming on a per pair basis for one or more pairs. 1Hive could encourage communities to come by providing them with COMB rewards for their COmmunity Tokens via the Token-xDAI pairs on xHoneyswap (xHoneyswap is Honeyswap on xDAI) and Token-USDC on Polygon.
- Gardens- 1Hive has the community governance and fiducary framework to build out not just their governance structures but also their finance ones.
- Celeste - Integrated for dispute resolution.
- Agave - lending, borrowing.
I become more convinced that providing infrastructure so DAOs can build their own networks and cross investing in each other to seek return, diversify community asset portfolios, and grow communities will be the next major change in crypto landscape and the earlier communities begin to adopt a mindset of working with each other building on each others strengths vs. competing with each other the better off the space will be.
Posted for discussion and as a thought for a longer term approach to DAO building not just for 1Hive but for /r/ethtrader, vote.finance, Maker, SourceCred, etc.