The Future of DAOs w/ Rune Christensen - Flywheel #76
Nov 1, 2023
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Rune Christensen, the mastermind behind MakerDao, discusses the intricacies of Decentralized Autonomous Organizations, subdows and their role in scaling DAOs, challenges and dynamics within DAOs, farming sub-doubt tokens, the restructuring of core units into projects, and the creation of sub-DAOs in Maker and Flywheel. He also explores the importance of support and funding for DAOs and Maker's pioneering role in the crypto space.
Subdows can focus on user growth, collateral management, and innovation to drive demand and user growth.
Separating contributors from politics and giving token holders power can mitigate conflicts of interest in DAOs.
Subdow token farming generates value by compensating for token sales and fostering community and network effect.
Subdows aim to create a sustainable DeFi ecosystem by gamifying yield and banking without unsustainable farming.
Deep dives
The Three Types of Subdows and Their Business Models
There are three broad spaces of opportunity for subdows. The first is to focus on user growth and acquisition by building a community and attracting users to the stablecoin product. The second is to manage and deploy the collateral for the stablecoin, ensuring its stability and safety. The third is to explore additional business models and innovation, such as NFTs, derivatives, or front ends for other protocols. Subdows have the flexibility to choose which business model they want to pursue, but all should focus on driving demand and user growth.
The Separation of Contributors and Politics in DOWs
The main challenge in the current DOW dynamics is the overlap between contributors and politicians. This leads to power imbalances and conflicts of interest. The goal is to separate the contributor role from politics and put the token holders back in control. The contributors should focus on contributing and be held accountable for their actions, while the token holders should hold the power to govern the DOW. Proper alignment engineering and clear rules can help mitigate conflict of interest and ensure minority token holder protection.
Mutually Exclusive Token Farming and the Value of Subdows
Subdow token farming offers a way to generate value for the subdow and its contributors. While some may farm tokens and sell them, the system is designed to sustain economic viability. The cash yield earned from stablecoins compensates for the tokens being sold, allowing contributors to align their interests with the success of the subdow. Additionally, intangible value can be created by bringing together the right people in the right place, fostering a strong community and network effect.
Learning from DeFi Summer and Making it Sustainable
DeFi Summer served as a blueprint for the design of subdow token farming. The goal is to create a perpetual DeFi Summer without the pitfalls of unsustainable yield farming. The focus is on gamifying yield and banking in a way that is engaging and emotionally compelling, while also ensuring financial stability and avoiding ponzi schemes. By learning from the mistakes of the past, subdows strive to create a sustainable and exciting DeFi ecosystem.
The Vision of Subdows and the Importance of Human Elements
Roon Khekh discusses the concept of subdows, which are designed to recreate the fun and community-driven aspects of crypto without unsustainable high yields. The goal is to bring people together based on shared interests and create a sense of identity within the subdow communities. Roon also emphasizes the importance of focusing on the human element in crypto and creating a more inclusive and appealing environment.
Restructuring Core Units and the Challenges of Managing Subdows
Roon explains that the core units in Maker have been restructured into projects, and there is a need to improve the management and organization of these projects. The challenge lies in ensuring that the work being done is well-defined and aligned with the goals of each project. The goal is to create a system where projects are done by the companies best suited for them and resources are allocated efficiently. Roon also discusses the importance of clear communication and transparency in this process.
The Creation and Function of Subdows in Maker
Roon discusses how subdows are created algorithmically in Maker and the role of emissions in token distribution. Subdows receive a subsidy from Maker and have the ability to emit new subdow tokens. The intention is to make subdows a fair and inclusive space, where token holders have the power to influence decisions. Roon also mentions the importance of scaling and attracting a wider user base in the crypto space.
The Future of Maker and the Endgame Vision
Roon envisions a future where Maker has successfully implemented the endgame vision, including technical features like Sceptiles and a dedicated blockchain. However, the ultimate goal is to solve the challenge of creating a more inclusive and appealing DAO, where individuals can contribute and influence decisions without feeling like outsiders. Roon believes that this new form of human organization can have a positive impact, both in traditional institutions and in the developing world.
