Funding Proposal: Test the Viability of DAO Consultants

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Funding Proposal: Test the Viability of DAO Consultants

As I mentioned in the thread below started by @burrrata , the availability of DAO Consultants could very well be the missing link between contemplating a DAO to successfully implementing an Aragon DAO.

See thread: DAO Business Models and Consultants

Due to the substantial interest that has been generated since the creation of that thread, I am proposing a grant to be awarded for testing the viability of DAO Consultants.

Scope of Proposed Grant

Initially, getting high quality, in-depth feedback from crypto project founders about their DAO needs are absolutely crucial. There are several benefits to the interactive process of approaching founders and engaging them:

  1. Interest creation or interest renewal in Aragon DAOs.
  2. Distilling their thought process about what are the most important DAO features to them.
  3. Helping them find information about Aragon’s DAO features.
  4. Matching founders with DAO consultants who can help them implement their Aragon DAO.

To test the viability of DAO Consultants, the following data points are useful:

  1. Are the project founders contemplating the formation of a DAO in the near future?
  2. What are the most important DAO features sought by the project founders on behalf of their respective communities?
  3. What does the project founder think about Aragon and its DAO offerings?
  4. If the founder has previously sought information about Aragon, what was that experience like? Why did the founder not take further steps leading to the successful formation of an Aragon DAO?
  5. What missing information and support would have actually led the founder to create an Aragon DAO?
  6. If the most important features sought by the founder are already available in Aragon DAOs, would the founder be interested in implementing them within the next 30 to 60 days?
  7. If the answer is yes, would the founder like to receive full support from an independent Aragon expert consultant and pay $X to the selected consultant for assistance with implementing an Aragon DAO + 30 days of post-formation support?

This fact finding and “no pressure” onboarding process would be broken down into 3 stages:

I. Data collection ($1000, part-time, four to five weeks)

A Google form or Typeform would be designed for the purpose of gathering the previously outlined seven data points. The form would be shared (the Aragon community could help with this for maximum outreach) with crypto project founders asking them whether they would like to enable a list of specific DAO features for their community. They would be asked to rank the importance of each feature on a scale of 1 to 10. Finally, they would be asked whether they would like to implement such features within the next 30 to 60 days if they received full support, and whether they would be willing to pay $X for this implementation + 30 days of support.

II. Assessment of suitability of the Aragon DAO for an individual project’s needs ($400, part-time, three to four days)

We would gather the form responses and related feedback from as many founders as possible, and determine what are the most commonly requested DAO features for their projects. Then we would assess which projects are well suited for Aragon DAO implementation, gathering expert advice from the Aragon community as needed.

III. Identifying founders with high conversion potential and pairing them with a DAO consultant ($600, part-time, two weeks)

After the initial assessment process, we would then identify the founders with high conversion potential (i.e., ready to implement a DAO within the next 30 to 60 days) and then match them with a qualified DAO consultant recruited from the Aragon community. We would create a forum post actively soliciting for qualified DAO consultants and also screen previously prepared lists of qualified consultants if such lists are available. The privacy and confidentiality of interested projects and their founders would be preserved. If necessary, a new list of consultants would be generated for use on an ongoing basis if the DAO Consultants proposal is deemed viable. Based on our experience gained from this process, we would offer suggestions about the best methods for matching projects with consultants moving forward, and what the work flow and onboarding process should consist of.

This entire viability testing process should provide valuable insight as to the current demand for Aragon DAOs, the pain points experienced by project founders that require resolution as a prerequisite to wider adoption of Aragon DAOs, the market based need for qualified and fairly compensated DAO consultants, and the feasibility and desirability of forming a new DAO for DAO Consultants.

Grant Amount Requested: $2000, payable all at once for the three stages (outlined above).

Grant proceeds will be delivered to @Amazongirl. In addition, Aragon community members who substantially contribute their skills and time toward this grant project would be compensated.

As this proposal has been live on the forum for several weeks we are moving forward with a CFDAO request. Please vote if you’d like to support our efforts to reach out to users to help them understand and realize the value of Aragon! :slight_smile:

The voting is live. You can vote here: https://mainnet.aragon.org/#/cfdao/0xd654287285c6fd006ed44c20b0cbe462b7039b28/vote/6/

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This is awesome! As mentioned in the DAO Business Models and Consultants thread, this is super important work that is currently lacking in the ecosystem. 2019 (and now 2020) has been heralded as the “year of the DAO,” but DAOs are still really complicated. Most teams want a dedicated team of experts to help them design, deploy, and manage a DAO that they can use with confidence.

A few questions:

  • To avoid boiling the ocean, what initial target markets would we engage with? What do you see as the highest leverage use cases / problems that Aragon DAOs can improve, and how do we reach people in those markets with problems that Aragon can solve?
  • How would data be handled? On the one hand we want to preserve the privacy and confidentiality of interested projects and their founders, but on the other hand there needs to be a proof of work. Furthermore, if community members want to get involved how do we decide who gets access to sensitive data and who does not? It’s essential that project founder can engage with the research/consultant team with confidence, but this is (seemingly) difficult in a community driven project.
  • How would work be structured? My impression is that you and I would lead initial efforts, but then if the project got some traction we might create a DAO to organize ongoing work. This DAO might manage reputation and rewards for consultants and/or deal flow sourcing. Is that correct?
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This is great! Good luck.

I’m in the beginning year of founding a company and looking strongly toward Aragon. Let me know if I can help. Id also be willing to do some data collecting to help out and earn some extra income.

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Very cool! What does your company do and how do you plan on using Aragon?

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Since its so early I’m still keeping a few things under wraps, but I’m planning on using Aragon platform to ask as a third party moderator for an ethereum betting service. Essentially if there is a dispute, we can send it to be voted on by tokenholders. I also value transparency in business and Aragon is perfect for that.

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“Boiling the ocean” - :heart_eyes: the phraseology…

Optimally, we should initially cast the net wide and share the Google intake form with as many founders as possible, regardless of market segment. The more data and intelligence are collected, the better it is. Then we narrow down the list of founders with high-conversion potential.

With that said, I feel that certain founders would be more receptive than others, because of the current state of crypto, the situation they face with their communities, or to test untapped demand from new business models.

  • Community Voting for Development Grants and Usage of ICO/IEO Funds

Many of the crypto projects which raised serious funding in 2017, 2018, or 2019 are finding that post-mainnet, there has been little adoption. But yet the show must carry on. Their current motus operandi consists mainly of two components: staking and development grants. This common theme is to keep the community satisfied that ICO/IEO funds are not sitting idle and to make the team appear busy and productive. Many well-funded crypto projects are actively giving out development grants but the team is handling the entire grant process. Some of these projects would be good candidates for an Aragon DAO where the community could get involved in voting for the developers who should receive grants for building dApps to enhance the project’s ecosystem. This way, the community members could immerse themselves in the project they have financially supported, instead of constantly worrying about the price or the lack of user adoption. Many of these project founders face increasing pressure from their communities to do more, and formation of an Aragon DAO to empower the community for voting might be an effective solution.

  • Trying out innovative business models

There is probably no other industry segment as innovative as the crypto space. For example, consider what Saint Fame DAO did with their experiment in “Speculative Fashion” by selling t-shirts via non-fungible tokens on Uniswap, with 1 FAME token = 1 t-shirt and the t-shirts progressively priced from $8 to $170,000. All the funds in the FAME liquidity pool are owned by the Saint Fame DAO and its members get to vote on what to do with the funds.

Saint Fame DAO is an Aragon DAO. Since the NFT space is doing so well at the moment, with many NFTs doubling in price every few days on OpenSea, I think you will see many new collectives being formed who want to sell creative pieces via NFTs and create an Aragon DAO like what Saint Fame did.

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All of the information entered into the Google form would end up in a spreadsheet viewable by only you and myself. Then we would extrapolate the findings and share the anonymized data with the Aragon community. “For example, 3 founders were willing to pay for an Aragon consultant, while 8 founders were not.” The founders’ names and the names of their projects would not be disclosed. If any community members get involved during the testing process, they can work with the anonymized data or access data only on a need-to-know basis. If they are actually introducing the founder or interacting with the founder, then obviously it is consensual, so that’s OK. Finally, the founders who end up hiring a DAO consultant would be able to freely communicate with that consultant.

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Yes, we would lead initial efforts and a DAO for Dao Consultants could eventually be created. Happy to hear your thoughts about how the work should be structured.

There are three possible models I could think of for DAO Consultants. How the DAO manages reputation, funds, and deal flow would depend on the model:

  1. Membership model: Similar to the way a professional lawyer or accountant membership association is run, consultants could join the DAO by paying a monthly or annual membership fee. The DAO twist to traditional membership associations would enable members to vote on how the fees should be deployed, such as for marketing the DAO’s services, administration of the DAO, and certification/continuing education.

  2. McKinsey model: Optimally, this DAO is set up with a legal wrapper so that it can sign contracts, etc. Clients pay the DAO, and the DAO pays the consultants and the co-owners of the DAO. It would be run like the McKinsey consulting firm is run, or similar to how any law firm or CPA firm is run.

  3. Blended or new model: It will be really interesting to see what types of innovative or brand new organizational/business models emerge from this!

Can anyone think of a great organizational/business model for DAO Consultants implementable with presently available Aragon features?

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Thank you for your interest and offer to help!!! :smiling_face_with_three_hearts:

How will you use Aragon in your new company?

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:smile: I posted above! Let me know if you need more details. I want to keep my idea behind doors for the moment, but I could probably go into greater detail about functionality.

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I see it now! Share your website with us when it launches! :smiley:

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Cool! You know we’re launching a court system to resolve disputes for DAOs right?

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A traditional structure would probably work best, but here’s an idea anyways :slight_smile:

Reputation Only DAO

  • A Consultant DAO is created where consultants earn reputation by contributing work. This could be posts explaining new DAO mechanisms, best practices, or use cases for DAO templates or apps. The more someone contributes to the DAO the more reputation they get. The value of contributions could be determined via reputation weighted voting, or a fixed rate for various types of contributions.
  • Clients would then be able to see who has participated the most and has the most reputation. They would (potentially) want to then choose to work with the consultants who have the broadest working knowledge or have knowledge specific a niche use case.
  • Consultants would then contract with clients directly as independent contractors. This keeps the legal situation of the DAO simple.
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I was reading about it. One could say I took partial inspiration. But my use case is much simpler. If DAO’s catch on like I’m hoping it will be one of the best and most interesting features in thr ecosystem.

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In my mind there’s two big questions that need to be answered for this to work IRL:

Who/what do clients send money to?

While DAOs are on-chain, most clients are not. Most clients, I would imagine, are businesses that require a legal entity to send them an invoice for services. Is there a way for the entire transaction to be handled end-to-end with crypto (no legal wrapper), or would the “DAO” need a legal wrapper? (at which point it’s really just an LLC that’s managed on-chain vs a decentralized autonomous organization)

Who/what controls the data?

While you and I can manage this initially, if we were to scale beyond 2 people into some type of DAO we would need a way to manage data. Currently, AFAIK, all the good CRMs and/or task managers are centralized databases that require an admin (even if they’re open source). We could say that “senior members” get admin access and rookies don’t, but this isn’t very “DAO.” Then it’s just a business, which is totally OK, but if the goal is to create a DAO then I don’t know what we do here ¯\_(ツ)_/¯ Would we use a centralized database for the CRM and then just use the DAO to manage reputation/rewards, or is there another way to approach this?

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Oh, I like this a lot @burrrata!

Yes, it greatly simplifies things if the client can enter into a consulting agreement with the individual consultants directly.

If that’s the case, then this would resemble the professional association model where the members pay membership dues. So if we go along with the Reputation DAO, member consultants could be required to pay monthly, quarterly, or annual dues. The dues collected would be used for DAO administration, screening/qualifying/certifying the consultants, and providing continuing education, networking events, etc.

I think the McKinsey model is still possible as many projects pay development grants in crypto, and therefore I don’t see why they wouldn’t agree to pay the DAO Consultants DAO (DCD???) in crypto as well. DAO Consultants DAO could then pay say 80% of the fees collected to the consultants who did the actual work, and retain 20% for distributing among all the co-owners or partners of the DAO. There could be senior partners, junior partners, apprentices, etc. If all payments are handled in crypto, then the DAO might not need a legal wrapper.

I have some friends who are lawyers in the blockchain space so I could ask them about how to set up a legal wrapper for the DAO.

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As I mentioned in my previous reply, many crypto projects pay out development grants in crypto, so I don’t see why they would not agree to pay the DAO in crypto as well for consulting services. The DAO would in turn pay out the individual consultants. Therefore, this would be an end-to-end crypto solution with no fiat dealings at all, and therefore a legal wrapper may not be required.

Perhaps if the DAO needed to formally enter into a contract of some kind, it could appoint an entity or law firm to act as power of attorney or its agent and execute contracts on its behalf.

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Check out Blockstack for decentralized solutions:

Arcane Docs / Arcane Office which works like Google Drive might work. I checked out Arcane and it looks cool! You can create documents, spreadsheets, forms, upload pictures, and export the files or share links to the files. All the files are stored on Gaia decentralized storage.

I’m a big fan of Blockstack! :heart_eyes:

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Regardless of the currency used for payment (fiat or crypto), legal entities (non-profit foundations) need to receive billable invoices in order to release funds. At least that’s the way I understand that it works in most major jurisdictions. Happy to be wrong here! So please correct me if you know of a way that legal entities (businesses or non-profits) can send crypto to DAOs without incurring the wrath of the regulatory and/or tax authorities.

Please do! There’s a lot of people working on it atm, but at the end of the day a person usually needs to sign something - so then it’s really a legal entity like an LLC that operates on-chain vs a decentralized autonomous organization that operates autonomously. Both are fine, but if the result is a business that transacts on chain we should call it that lol

Looks cool, but even if the data is stored on a decentralized server the data access model is still centralized. Someone has an account and a password right? If a DAO controlled the data as well as access to the data via membership tokens (like Aragon Drive: file storage and sharing within your Aragon DAO combined with memberships and/or subscriptions) that might help, but at the end of the day someone/something needs to control the data. Legal entities that control data require contractors to sign data disclosure agreements, and then at the end of the day the legal entity (not the people) owns the data.

If the consultants are independent and contract with clients themselves (payments as well as data policies) then that could work. This would greatly simplify the DAO to just a curated registry of members who vouch for other members. Not sure if that’s of interest, but as soon as you start controlling user data and money things get complicated lol

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If the DAO Consultants’s clients consist primarily of crypto projects, then I can point to many examples of crypto projects that have no legal entity behind them (Ravencoin with $145M market cap, Decred with $210M market cap and so on), so they would be in the same boat as DAO Consultants. Many coins created from mining and privacy coins have no legal entity associated with them, just like Bitcoin, which made it to #! position in market cap without any legal entity behind it. Their goals are to be a decentralized autonomous entity with decentralized governance, and since they themselves are not a formal legal entity attached to a traditional jurisdiction, I find it highly unlikely that they would require DAO Consultants to have a legal entity to execute contracts with or even require an invoice. Plus if an invoice were required, I could imagine a tool on the DAO Consultants online platform that would enable a client to self-generate an invoice from DAO Consultants. Would this type of decentralized autonomous crypto project require DAO Consultants to produce an articles of incorporation for a corporation or nonprofit organization, or articles of organization for an LLC? I doubt it.

For crypto projects with a company or nonprofit entity behind them, then yes, you are right, they would probably require a legal entity to execute contracts with or issue an invoice for accounting and tax purposes.

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