Aug 02, 2021

Notes on DAO2DAO Relations + Collaboration

From Discord (meta, context): Dave and I did a deep dive into this DAO research - it's mostly focused on DAO2DAO relations, and largely uses the perspective/lens of International Relations, with DAOs being new "non-state actors" that have tendencies more like states/governments than like markets/firms

These two briefs are essentially policy reports based on research, analysis, and collaboration with working DAOs (PrimeDAO in particular, a defi entity). While the PrimeDAO background is largely financial, they're very focused on different relational/governance aspects of collaboration - it's RAD...

..And very policy-forward, so may be hard to grok if this is new to you. For me, I was in hog heaven, this is the kind of work I used to do in the healthcare space so it felt very familiar!

Article Links

both articles written by Block Science, with PrimeDAO, and Curve Labs

Notes below are essentially a summary of what we were reading - we haven't gone through to work the content through a Buzzard-specific perspective.. more on that to come! Notes are kinda rough but may be a quick way to download to yer brain what's covered in the articles.

Part I: "Conceptual Models for DAO2DAO Relations"

January 13, 2021

Article link

DAO Concept & History

interDAO relations vs intra
autonomy and decentralization - key words/concepts
- autonomy vs autonomous - in web3 its both, which is pretty cool - autonomy part is the self-actualized organization (poltical philosophy perspective) and the autonomous part is the component parts like smart contracts (control/technological theory perspective)
  - virtuous cycle of the autonomous (machine inteligences) informing the autonomy (human inteligences) - DG note
"cyberphysical systems (CPS)...aggregates of automated components overseen by humans but exhibit autonomy asinstitutions well as an emergent collective intelligence"

conceptual models to understand DAOs

interscale models for institutions

critical to understanding emergeny potential of complex systems
interscale interactions patterns both within (intra) and between (inter) DAOs:
- Agent to Agent (A2A)
- Agent to Institution (A2I)
- Institution to Agent (I2A)
- Institution to Institution (I2I) - focus of research
  - A2A and A2I influence

Quantifying the qualitative phenomenom of DAOs

(i) transaction costs (low to high)
- extent to impediments to activities of a stakeholder in a DAO
- friction of transaction costs
- costs attention to make decisions
  - requires [[pareto-optimal model]] of attention
- also includes cost of automation, co-steering, financial fees, other costs of coordination
(ii) information availability (low to high)
- private to public spectrum
- blockchain: high content info transparency and low identity info transparency
- information overflow vs obfuscation of data - exteremes to take into account
(iii) sovereignty (prioritizing agents to prioritizing institutions)
- rules of institution favor individual priorities over group outcomes
- power balance: agent and org
- not same as democracy - which is the feedback loop from agent to organization
(iv) trust level (competitive to cooperative)
- norms of the institution favor individual agents OR group priorities
- crypto-anarachist - individual self-interest that will ultimately benefit the whole system
- socialist which is behaviorally more collaborative and trusting
(v) rigidity (adaptive to immutable)
- flexibility to react and adapt to occurences within the system that may require a change to system rules
- reflects level of active democracy - the strength of the feedback loop of how much an individual agent can shape the co-steering of the system
- strong A2I feedback loop (vs strong I2A - common in most orgs)

conceptual framework lacks the important attribute of power structures within and between DAOs
- relational, so aren't well modeled as a spectrum
- future research

Framing DAOs in the context of Internal Relations

Intro to [[international relations]] (IR)

normative perspectives - how the world should be
non-normative - how the world is
positivist theories - objectifiable questions of measuring/describing
post-positivist - qualifying questions to define various perspects on concepts, such as power
- more multi-perspectival
“Diplomatic relations,” “Sovereignty” of Nation States, “National Interest,” “Power, Power Blocks and Polarity,” “Globalization,” ”Interdependence,” “Nationalism,” “Economic Development,” “Sustainability,” “International security,” “Non-state actors,” and many more.
IR theory: https://en.wikipedia.org/wiki/International_relations_theory#Post-structuralism
- realism - a reaction against interwar idealist thinking; e.g. WWII outbreak is evidence of deficienies of idealist thinking
  - statism - nation states are the main actors in international politics (vs. liberals who accomdateroles for non-state actors)
  - survival - international sys governed anarchy - no central authority
  - self-help - no other state relied up to guarantee states survival
  - neorealism - structural realism - modern realism - effect of structure influences state behavior - e.g. to structure above states to enforce rules/maintenance = constant global anarachy = need weapons to protect to guarantee survival
- liberalism
- constructivism
- marxism
- functionalism
- post-structuralism
- post-moderism
- post-colonialism
- feminism
- evoltuionary perspectives
- psychological approaches
- etc

Relevant IR Research Questions in the Context DAOs

D2D and D2 -state and -other non-state actors
DAO "foreign relations" with other DAOs
- form external relationships and enforce interests
interdependencies - extension of globalization
- also blockchain network with another subnetwork
power of nation states
- hard and soft power - coercive power/armed force vs economics, diplomacy or cultural influence
polarity
- unipolarity - one actor has most influence
- bipolarity - two dominant states
- multipolarity - more than 2 actors have equal power
- nonpolarity = vary centers of power, non of which dominate any other (KP like this one 🙃)
Power blocks
- combining forces for political, military or economic purposes
sovereignty
- digital world - assets and data
  - interdependent with rules and regs of nation states
- IRL - geography

Part II: "Exploring DAO2DAO Collaboration Mechanisms"

March 15, 2021 Article link

High leverage [[D2D]] - joint ventures and the co-funding of research

(1) the Proposal Inverter (co-funding research)

(2) the Conditional Tokens Framework. (joint ventures)

Recap of Research Cycle 1

DAOs = non-state actor in International Relations framework
- DAOs: more resemblance to nation state and markets than firms (aka corporations)
- why? are not embedded within larger higher-level institution that enforces interaction patterns
- kp note - no higher-level institution but there is a higher level ecosystem that is emerging and consolidating the power emerging through DAOs into something more powerful than existing firms or states - because it's emergent
DAOs = Networked Islands
- novel parallel financial systems

beware of [[free-rider]] in [[R&D]] cycles
crypto-institutional design !!!! - and "intellectual legitimacy" [[Samo Burja]]

Summary Conceptual Models for D2D Relations

5 attributes of DAOs
- (i) transaction costs,
- (ii) information availability,
- (iii) sovereignty,
- (iv) trust level, and
- (v) rigidity
lacking attribute of power structures
- relational so not well modeled as a spectrum (better represented as "directed graph formalism", later publication will cover 🧐)

D2D: Towards Decentralized Negotiation Protocols

coordination mechanisms between DAOs
- (i) strategic communication,
- (ii) co-funding of research,
- (iii) co-funding of development,
- (iv) any other type of joint venture,
- (v) a common monetary policy,
- (vi) polycentric governance/policy design
Gnosis' [[Conditional Tokens Framework]] (CTF)
- adaptable for complex D2D collabs, joint ventures
[[oracles]] in crypto?? predictive mechanisms?

Recurring Systems Patterns & Mechanism Design

table in article for types of D2D ventures: joint, community swap (token swap), funding public goods, DAO-merger
table in article for mechanisms and use cases for D2D

co-funding of research: "so far the tooling we see in the DAO landscape focuses more on the KPI-based approach suited to developers scoping the construction of a pre-specified prototype." - placing undue burden on researchers bc of inherently unknown nature of research process -

**proposal inverter **

funding primitive to enable multiple groups or individuals to collab on common proposals
facilitate cross-DAO initiatives such as
- to reduce admin overhead of research
payment mechanism - "decentralized HR" across DAOs - payment, pre-negotiated contracts
[[bonding curve]]
shared benefits to multiple groups
different stacked primitives
- level 1 - basic "flow wallets"
  - release all funds, all at once, according to a static allocation policy
- level 2 - rate-limited "flow wallets"
  - leaky integrator - rate-limits the outflow of water, variable outflow
  - new water ($) can flow in
- level 3 - rate-limited dynamic allcoation "flow wallets"
  - dynamic allocaiton policy - bonding curve, managing access rights to a portion of the monthly funds allocaiton
  - easy to take in money from other external agents who want to delegate tokens to signal support
  - potential for supporters to see some financial benefit that's received as a direct result of the output generated
supporting community management, and care work - mission critical tasks that are hard to quantify, at least in advance - BUT HOW?
shared research, community processes, infrastructure, and contributor base
collective liquidity - common pool for funding

- instituional tools for social benefit, public goods - research, education, and community building

[[Conditional Tokens Framework]] CTF

"treasury" smart contract prototype
- co-fund a joint venture
- trading of ERC-20 tokens based on future events via tokenized escrow outcomes
  - shallow conditions - binary or scalar outcomes
  - deeper combinatorial conditions - reliant on the outcome of several condition
  - based on potential future actions of 2+ DAOs
  - collateral backed conditions (held in escrow)
two phases
- negotiation - proposal
- agreement - vote on the proposal
- tokenized decision tree - tokens for each possible outcome put up in collateral
  - if yes and yes - joint venture wallet formed -pros
- more flexibility in structuring and engaging in negotiations than trad escrow
- not on chain unless executed = less gas, and less chain bloat bc mutable multiuse contracts
- value in the conditional tokens themselves
cons
- complex codebase
- lack of composability of ERC-1155 token standard - req for CTs - relates to core treasury functionality too
next steps
- shared treasury functionality (central bank? lol)
  - accessible by both DAOs and multisig wallets
  - mitigate the CTF being an ERC1155 token
- web interface to build proposals on a shared standard (similar to Boardroom)
  - structure conditions in a way that is far more programmtic than natural language