The Unicorn DAC, a non-hierarchical decentralized governance experiment

Why are bosses necessary? They aren’t. Self-managed organizations exist all over the world, but there is no template for how a decentralized self-managed organization should work. Let us try to change that.

A different type of governance.

Self-managed organizations (those without a management middlemen layer and hierarchy) have to overcome a lot of hurdles when it comes to governance. For example, on one side, the direction of the organization cannot be dictated top-down by management and on the other side nobody can push responsibility up and “just do what they are told”.

These hurdles, Frederic Laloux, author of “Reinventing Organizations” suggests, exist mainly because traditional management practices and traditionally managed organizations are so prevalent that we have a lack of examples to follow. In other words, we might have never seen better! Moreover, there have been years and years of organizational research and practice on hierarchical structures (think both about an old-age tribe with a clear, visible head and also a large corporation with a twitter rant-prone CEO).

On top of that, we have new models of governance arising within blockchain structures or enabled by blockchain solutions (here’s a pretty good article that touches on some of the key points), although there is not so much literature on specifically non-hierarchical, egalitarian structures.

While there are great companies pushing the envelope in both blockchain governance and self-management, it’s time for us to investigate, explore and document different forms of non-hierarchical governance for organizations. Giveth’s Governance Circle, and particularly Loie, whose goal is to foster governance experiments, is launching the Unicorn DAC on that regard. Lorelei devoted countless hours to ideate, iterate and bring to life this project with the rest of the Unicorns… and this is the result.

Stepping up the game

Operationally, Giveth works much like a swarm. Around a strong core of main contributors, collaborators that are aligned with the purpose of Giveth come and go and offer their time, ideas and work. Some of these collaborators do one assignment and leave and others stay collaborating on the periphery but for the longest time. They are rewarded through a mechanism called RewardDAO, with which everyone can get points that then can be exchanged for ether if they upload a video on our Wall of Fame or to the DApp itself.

But these points are awarded somewhat arbitrarily and there’s a limited amount of monthly ether that goes to fund these rewards. Hence, the amount that collaborators receive in ether can vary depending on other people’s contributions and points. We think it’s a great introductory system for getting into the Giveth Galaxy, but might not be ideal as a fully decentralized non-hierarchical governance model. In fact, it’s not really a complete governance model, as it doesn’t necessarily steer Giveth’s big decisions, but our experience tells us that it does motivate people to take initiative, talk to the most committed contributors and suggest new projects and initiatives.

Put your money where your purpose is

To be clear, governance in self-managed organizations boils down to who decides — and how it is decided — what the organization dedicates its resources to?

So in the case of Giveth, the question was: How could we empower everyone that is fully committed to Giveth to decide what actions and what strategic direction should the organization take? And even further, could we do that in a way that we leverage our own products, i.e. the Giveth DApp? -we do like our #dogfooding!

Well, the Giveth DApp allows Makers to create DACs, Campaigns and Milestones, and Givers to fund whatever change they want to see realized in the world. Could we not create a DAC that Unicorns can use to propose projects through Milestones, and other Unicorns can fund them if they think they are aligned with Giveth’s purpose? We would distribute money to our Unicorns — this group of core contributors — and they could fund any Milestone they wanted.

What better way to steer an organization than by democratizing both the access to resources and the power to propose actions and then let everyone actually put resources where the Giveth purpose lies the strongest?

Sometimes Unicorns will decide to fund already existing Milestones, and sometimes they will create a new bounty. This gives everyone the power to suggest a project, give it a price tag, and if the funding target gets reached, empower and pay this person to make it happen. If it doesn’t get funded, it would mean that the project was possibly not so aligned with the general feeling and purpose anyway.

Examples of funded proposals:

a) Lorelei is often frustrated by the lack of sharing info in the Ethereum community. Everybody seems to be having the same conversations but no one is hearing each other. When she hears about Tennagraph, the community signaling aggregator to answer just this need, she becomes very passionate about it and decides to use her Unicorn DAC delegation allowance to fund Deam to go to Web3 Summit and raise awareness and adoption for Tennagraph!

Actual Milestone funded for Deam to go to Web3 Summit

b) Lanski has identified a feature for our DApp that a bunch of Makers would like to have in the platform. It might not seem it’s a priority from a technical point of view, but as a matter of fact, all the feedback that he is receiving from the users mentions that particular need. He assesses the cost with the DApp team and creates a Milestone where they (the DApp team) are the beneficiary. The work, though, is too expensive and he cannot pay it on his own, but Lorelei realizes how important the feature is and funds the Milestone too so the DApp team can go ahead and build it to claim the Milestone.

Example of an unsuccessful proposal:

Lanski wants to make stickers of Giveth’s logo to stick all over the world — for marketing purposes. Everyone has got some stickers left from the last batch, but not enough to cover half of the world with them, so he wants to make MORE. But the general consensus is that we are publicizing well and doing the right outreach in the circles that we want to attract at this stage, so nobody actually funds the Milestone. Sorry Lanski, maybe later when we decide to do a publicity campaign for the general public!

Ins and outs of the Unicorn DAC

The ins…

…and outs.

This Governance experiment is precisely that, an experiment. And the initial parameters are sort of arbitrarily defined and will be polished as we go along.

We’ve been a community gathered around shared principles and purpose for a while now, but never had an official onboarding process because there’s no clear entity to be onboarded to. Now, we have the opportunity to come together around these agreements and create a membrane that gathers and recognizes the most committed of us as we join the Unicorn DAC. You can read about our Onboarding Process here, which ensures commitment to Giveth’s purpose and alignment with our principles in order to opt to be part of the DAC. The resource allowance per head will be the equivalent in ether to 600 USD every week. In order for people not to fund only their own Milestones, we have capped the amount people can put into their own Milestones at 150 USD, so 450 will be used to decide on other people’s initiatives. Unicorns don’t have to use the full 600 USD every week if they feel that there are no interesting projects to fund, or the ones that are truly interesting are already fully funded. Needless to say, people can choose NOT to fund any of their own Milestones. The reason why we allow people to self-fund their Milestones for a certain amount is to facilitate the funding of menial or uninteresting jobs that have to be done, but they would waste people’s time and resources if they had to be reviewed and funded by other unicorns. We cannot expect people to feel connected to a purpose by only chipping money into Milestones. Hence, in order to keep purpose alive, we have a once a month Unicorn Meeting! Here, we discuss which projects we delegated to and why it is aligned to Giveth. As a rule of thumb, Milestones will be created by those who hold roles related to the matter at hand. That’s not to say that people can’t have great ideas outside of their roles, but they should follow the advice process and certainly consult with those who hold relevant roles before taking action, even if it is merely for keeping information flows going. Roles are evaluated on how well they have been fulfilled in a peer review system every month.

MVPing our way through it

We are ready to try the Unicorn DAC and carve our own way in decentralized governance practices. As the experiment that it is, we do expect some issues to come up, and we have already identified a few:

Dogfooding is our motto because we believe the Giveth DApp is a great tool. Nevertheless, it does not yet have the advanced functionalities of a compounded delegation system that would allow you to allocate only up to a percentage of funds into your own Milestones and the rest to others. We will track donations manually at this point while we look for a solution, be it homemade or leveraging Aragon. Foreign influence. Our DAC will always be public, transparent and held to the highest standards, but the fact that it’s an open way to fund the projects that Giveth undertakes, it could be exposed to an admittedly unlikely vector of attack where a powerful party decides to fund specific Milestones or projects that are on the periphery of the purpose and this acts in detriment of the best direction to take. This would be a similar attack to sovereignty to the IMF dictating policies to countries in exchange for bailouts or access to concessional loans. That said, we have funds to support this initiative for a limited period of time, and since Giveth is a non-profit blockchain entity that accepts donations, if you are a donor and want to support Blockchain4Good projects PLUS a decentralized non-hierarchical governance experiment like the Unicorn DAC, we are all ears (and eyes!): hit us up on Riot or Twitter or fund us directly!

Already winning

The Unicorn DAC was presented during DevCon4 at the Aragon Dream DAO contest… and it won the runner-up prize! 250 ANT + 250 DAI for making it a reality! Aragon and Giveth (and the Unicorn DAC in particular) share the basic principles of decentralization and non-hierarchicality. We see Aragon as the perfect tool to facilitate and enable this governance experiment.

Have a look at Lorelei pitching at minute 58:15 below!

#winning

But… why?

It is worth reproducing a conversation I had with Lorelei on the reason to spend money and effort trying to devise and implement untested ways of governance:

“Is it appropriate to answer this question with a meme?

Ha, but in all seriousness, the Unicorn DAC takes these decentralization experiments within. Any good mission reaches as far out into the world as it does into its creator, which in this case is us, the Ethereum community. We can yab about decentralization of power all day while at home we still have one or a privileged few making the influential calls on how money is spent, and this DAC offers a solution to that.”

We are launching this experiment to change how the world looks at self-management. We believe there are more human ways to interact and organize than the rigid, sometimes alienating structures of today.

Come join our dialog in our Riot or share your ideas below — they will be read and discussed! Participate and join us in the revolution of management!

Enter the Unicorn DAC.