Further to the Nest DAO kick-off call (call notes here if you missed it), I would like to continue the community research and discussions surrounding Nest DAO and the Nest DAO working group.
The ideas below have been taken from a variety of Aragon forum posts, the Nest DAO kick-off call as well as a few of my own thoughts. Please add any I may have missed or new ideas.
- There is a dedicated channel on Aragon Chat for Nest WG (#wg-nest)
- I think we should increase the frequency of Nest WG calls. A 1 hour call every 3 weeks simply won’t be enough time to discuss both new grant investment opportunities as well the underlying mechanics and strategy of Nest. Or perhaps a better solution is to create 2 Nest WGs, one for strategy and one to discuss potential deals so that they can run in tandem. What do you think?
Nest DAO ideas and discussion points
I would like to suggest doing a retrospective, where we go through all of the Nest projects funded to date and do some form of review. What worked well? What didn’t work so well? What could we have done to improve the outcome?
Perhaps a survey to Nest project leads could be a good place to start on this front.
2. Best Practice Expectations Document
Create some best practices around the expectations for Nest Grants. This could include, but not be limited to:
- ux / usability requirements
2. documentation requirements
3. security requirements
The goal being to ensure projects we fund deliver a usable, understandable, and secure product. This is non-trivial, so maybe we would need to create some support infrastructure around this to make it easier for grantees.
This is a good initiative in my opinion. I would add an additional one for “reporting requirements”. Nothing tedious, just a requirement for soft-touch and regular updates.
3. Increase the number of Nest projects funded
At the moment ANT holders are funding million dollar projects that support teams of 5-10 people, but small community endeavors that cost less than $10,000 each are getting blocked and pushed back on. To get some perspective, we could fund 100 to 150 $10,000 community grants for the same cost as either Aragon Black or Autark’s latest AGP. For reference, that’s two to three $10,000 community grants per week for a year.
Related to this is the annual budget for the Aragon Network.
How much should be invested in Nest vs Flock?
4. Investment Thesis
It would be nice to see an investment/grant thesis to clearly explain what types of projects Nest is funding and why. Technical projects only? Non-technical projects? What stages are suitable? Solo founders accepted? What will it not provide grants for?
This is important for attracting the right kind of deal flow for Nest DAO (and reducing the amount of wasted time reviewing or replying to projects that don’t fit the grant criteria)
Ex: Here is the A16z crypto investment thesis
5. Request for Projects
I would like to propose creating a “Request for Projects”, similar to the commonly used “Request for Startups” where we take a proactive approach to deal sourcing rather than merely reactionary.
Do you already have some ideas for small projects that could be beneficial to the Aragon ecosystem?
6. Project Evaluation & Due Diligence
Do we want to create a more structured way that we due diligence Nest applicants?
A trimmed down investment memo might be suitable where we tick off essential questions in conjunction with the investment thesis.
The objective is to create some kind of consistency in the way Nest projects are evaluated and ensure basic questions (ex: Are there any critical skill gaps on the team?) don’t go unanswered.
7. No skin-in the game
For example, VCs and angels support their investments because they are incentivized to maximize their return on said investments. I’m here because I think Aragon and DAOs are awesome (personal interests/curiosities), but at this time I literally have 0 skin in the game (ANT tokens). This feels like a weak model because in the limit only A1 or whales have real incentives to do deep due diligence and analysis.
I think this is an important point because a) Nest DAO members might pick which projects to back differently if their own money was on the line, b) they might not put in the required work to properly due diligence opportunities or source new deals if they have nothing to gain and c) they likely won’t be plugged in to the Nest DAO project post grant which could influence it’s chances of success.
Should Nest DAO members that can afford it invest alongside the Nest DAO? (so they have skin in the game)
Should Nest DAO members be remunerated for their activities? (if investing in a for-profit project, it would seem logical that they should share in some of the upside). If not, how can we ensure the work that needs to be done relating to Nest DAO actually gets done?
8. Nest DAO member criteria
The current members of the Nest DAO are comprised mostly of Flock members. Given the AA has limited funds as well as the fact that there is not currently any other major Aragon revenue streams, there is essentially a competition for capital between Flock & Nest teams. As such, it’s not unfeasible that Flock team members will vote against new Nest projects even if they might be good for the Aragon ecosystem as a whole, to increase their share of capital allocation.
How can we avoid this scenario from happening? Should we increase the number of members in the Nest DAO? Should we have strict budget allocation for Flock vs Nest teams?
It was suggested to create a code of conduct / guidelines for Nest DAO members to avoid scenarios where they might behave unethically. Given that “ethical” is often a subjective grey area, this seems to me like a wise suggestion.
9. Grantee Pledge
Require that new grantees of the Nest DAO sign a pledge, similar to the Aragon Manifesto.
The objective is to closely align the cultural values of Aragon with grantees of the Nest DAO.
10. Function specific DAOs
Create DAOs that support and target specific areas within the Aragon community (marketing, ANT price, dev UX, onboarding, education, scalability, etc…). Each DAO would have a board whose job it was to find deal flow, fund ideas, and give them support along their way to help them ship or get to the next stage of their journey (Nest grant and/or Flock adoption)
2. This would allow the community to fund projects on an individual basis, allow community members with domain expertise (working groups and/or Expert Network) to support those projects, and then we would have feedback and data from each experiment.
I’m a huge fan of this one. Not just for the coordination of Nest teams, but also more generally for Nest, Flock and the Association. For example, User Research/Market Research is one such function where I think it makes sense for the resources to be deployed for the benefit of the whole community rather than just a single application or team. An interview with a cross panel of users might for instance show that there are critical bugs with a Flock team’s application, make us aware of a new project opportunity (yet to be filled by any Nest team) and enable us to cross-sell other applications across the broader Aragon family.
11. Expert Network / Nest DAO support
The expert network could increase the success rate of Nest Projects by giving them access to a mentor pool that is financially incentivised by the success of the Nest portfolio.
12. Success Metrics
For Nest projects that do get funded and that don’t have a profit motive, what does success look like? Shipping to mainnet is obviously a key goal post. But what other metrics might be good to track to better contextualise our decisions? Number of users? Community dot voting? App Ratings? App Reviews? (which don’t exist yet but could)
13. Project Support Services / Working Groups
We need to refine what support services we can offer to Nest teams (ex: security audits which I think is already in play). Other common examples here might be support services where it doesn’t make financial sense for a small team to have that function in-house. In addition, there are often functions where there is mutual benefit for that function to be cross-project instead of Nest team/project specific.
1. Security audits 2. User & Market Research 3. Product testing 4. Content marketing
The concept of Aragon working groups was originally discussed here. We might want to create sub-working groups for the Nest WG (ex: to cover “deal sourcing” as a standalone function), as well as to foster better collaboration and cooperation across the various Aragon projects including those of Flock teams.
On a related note, most accelerators (and VCs) negotiate discounts with popular service providers such as Google Cloud, AWS etc some of which can be quite substantial. AWS for example provide up to $100k in credits. It’s worth having the discussion with some of these enterprise partners to discuss what they might be willing to provide in terms of benefits to Aragon Nest projects.
14. Aragon App Mining
We need to create systems that reward applications that have high utility and real users. Currently Blockstack has an “app mining” program that ranks and rewards applications on a monthly basis based on their user volume.
The objective here being that it may enable us to move away from one off grants towards a more meritocratic model, better aligning incentives between stakeholders.
15. For Profit Grants
The idea would be for Nest teams working on a for-profit project to have their own DAO. The Nest DAO could then fund these projects by putting ANT tokens into each team DAO’s Fundraising bonding curve.This way “NestDAO” could iteratively fund nest projects and in doing so would get some governance and upside in that team. This also creates a clear path forward for ANT holders to support their early investments with follow on capital.
It would be great if we could bring our minds together on some of the above topics before the next Nest WG call. What issues do you foresee with the current version of the Nest DAO? How would you improve it?