Dao structural brainstorming (co-ops)

I’m not sure if this has been talked about much, it’s not specifically relevant to the ENS dao, but to the concept of DAOs in general.

So maybe I’m naive, but I just learned a bit about how co-ops work from this short Ted talk:

I clicked on it because the title suggested that I might be about daos.

The way it’s described in this video is very interesting, in that’s it’s basically a real life dao… that has been battle tested for like 150 years and proven to be better than corporations in many regards.

Although a key difference that I find interesting, is that your voting power is not based off of “shares” or tokens, but simply be being a member. 1 member 1 vote. I guess it would be like a soul bound token (SBT) based dao.

Have people considered this when brainstorming dao structures in general? Because if I’m not mistaken, they basically run, execute, organise in the same way most daos are trying to achieve…

Would love some comments on this.
@nick.eth @AvsA

(Sorry if this is in the wrong section, it’s also quiet a meta topic so wasn’t sure where to put).

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I read quite a lot about co-ops earlier this year precisely because they’re so similar to DAO’s in many ways and it was a lot of fun :slightly_smiling_face:

Here in Sweden we experimented with that quite a bit, and we even still have a chain of grocery stores named “coop” which originally were co-ops but now not so much.

However, I ultimately agree with Vitalik that DAO’s are more similar to democracies than they are to company structures. He wrote extensively about it here: DAOs are not corporations: where decentralization in autonomous organizations matters

The reason for that is because so many of the problems coops had and tried to solve was with traditional funding, which crypto and web3 has turned on its head completely and isn’t a problem for us. DAO problems to me seem closer to democracies: elections, bureaucracies, work/workers and to make sure things don’t collapse completely.

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Interesting points, however if I’m not mistaken one of the main pillars of democracy is each person has an equal vote? One person cannot buy more influence (at least in a true democracy).
In this sense current DAO models are mostly different, as anyone can buy voting power by buying more tokens.

The challenge with democratic voting within DAOs is determining:
a. Who is a “member” of the DAO; and
b. Whether that member is a real person.

In the context of the ENS DAO, all $ENS tokeholders are “members” of the DAO. If the DAO was to introduce democratic voting with no conditions, each wallet, holding any amount of $ENS tokens, would be entitled to a vote.

The obvious issue here is that a person could spread tokens out across a number of wallets to gain more votes within the DAO. Introducing simple conditions, like minimum tokenholding requirements do little to solve the problem, as large token holders can easily circumvent restrictions by spreading tokens across wallets.

The only way to solve this problem is by layering conditions and attempting to verify a person’s identity to ensure that a single person has a single vote (Sybil resistance). In the context of a cooperative, it is very easy to verify a person’s identity and give that person a vote. Cooperative members will likely have strong social and geographic ties to a place as well as uniform methods of identification that make it easy to verify a person’s identity.

In the context of a DAO, it is conversely much more challenging and potentially excludes a large number of people who aren’t willing to reveal their identity in order to participate in governance.

It would likely be impossible to safely introduce democratic voting within the ENS DAO. However, within working groups themselves it is very doable. The working groups are not bound by the same restrictions as the DAO. Within the confines of a given working group, stewards are free to introduce any voting methods they see fit.

I was actually hoping to experiment in the Ecosystem WG with democratic voting in the not too distant future with the election of community advocates. The basic idea is that a certain number of community advocates could be elected each term using a democratic vote. I suspect the easiest way to execute something like this would be through the use of an NFT distributed to anyone with a certain level of Gitcoin passport verification.

If the pilot experiment works well, there is no reason why democratic voting couldn’t be used more widely in the future within working groups.


Thanks for the thoughtful reply.

So as I understand it the goal is to have a coop-like democracy, but the issue is implementation, specifically Sybil resistance?

Thank you for referencing the gitcoin passport initiative, I hadn’t heard about that, that’s really cool. It seems similar to Sismo in that regard, but I hope it would allow you to change where you delegate your stamps, so for example if a hot wallet is compromised you can set a new one as your new identity and the old ones reputation is essentially revoked.
I believe this is what Sismo is working on next with their ZK badges, if I’m not mistaken. I think this aspect is important as it allows you to be anonymous will still having reputation, through zk tech.

And I agree with your points about token distribution and how that would not be feasible, but what about optimism idea? (I’m haven’t looked fully into it) but having soul bound tokens as your “vote” which you earned somehow (could still be attacked, but perhaps less so).

My thoughts here are a bit all over the place, but I’m curious how governance evolves, and also what will cause it to evolve.

I wouldn’t say democratic voting is a goal—particularly with a protocol DAO. The goal is effective governance and trying to figure out what that looks like for this particular DAO. Token-weighted voting is far from perfect, but it is currently the fairest voting mechanism we have at a DAO-level.

Re Optimism, it depends how tokenholders/delegates want to structure the DAO. The vision we had for the ENS DAO from the outset was that the social structures that support the DAO would be as open and as accessible as possible.

Issuing something like a soulbound token for the purpose of governance invariably excludes people from participating. While this may lead to more effective decision-making and allow for democratic voting, it comes at the price of exclusion, which, in my opinion, is not a desirable tradeoff.

Taking the example of Retroactive Public Goods Funding (RPGF), Optimism will use soulbound NFTs in their Citizens House to give voting power to a selection of individuals, who then vote on who should be awarded RPGF. The soulbound NFTs will be issued on the basis of “contributions to Public Goods in the Optimism ecosystem.”

Conversely, the Public Goods WG in the ENS DAO runs a monthly small grants round that distributes funding to Public Goods projects in web3. Any wallet that holds delegated $ENS is eligible to vote. While the smalls grants rounds are based on token-weighted voting at present, there is the opportunity for the voting mechanism to be experimented with, while still remaining more open and accessible than issuing soulbound tokens to a select group of people.

With the ENS DAO, delegates vote to elect stewards and separately fund working groups. Those working groups have a lot more flexibility in experimenting with different types of voting.

The way I see governance structures emerging is that there are a lot of DAOs experimenting and doing interesting things. It’s important to let experiments run for a time before we rush to imitate. If we do this, we can change and improve governance structures over time in ways that best work with the constitution and goals of the ENS DAO.