Understand the multi-layer structure and scalability of DAOs

DAO Treasury Asset Under Management, DeepDAO, 2022

DAO-Pod Architecture

Moloch V2 and Orca both chose to build a sub-group for DAOs. The DAO delegates a portion of its funding and some specific authority to a small team of trusted individuals for acting with relative initiative. Such a small, trusted team is known as Minion in Moloch V2 and Pod in Orca, which takes the form of a multi-sig wallet, despite the difference in the designation. The multi-sig wallet is funded by a vote of the DAO members who also vote to appoint a multi-sig committee which will be referred to as Pod throughout this article.

  • Initiate Coodinape rounds (a DAO tool used to distribute rewards and payrolls), or by other means, allocate the compensation to the contributors internally.
  • Pod vault can also be used for fund receivables, but the funds in the vault as one still belong to the parent DAO.
  • A Pod cannot change the multi-sig committee members and their respective multi-sig weights without authorization, nor can it change the multi-sig rules. Those rights are vested in the parent DAO.
  • Parent DAO has the right to withdraw the Pod funds and cancel the Pod;
  • Parent DAO may set certain limitations for the fund payment of Pod to reduce funding risks, such as single transaction limitations, daily transaction limitations, black and white lists of payments, etc..
  • By appointing multisign committees, it allows professionals to decide on professional affairs. Creating Pods that delegate out not just the right to manage funds, but the right to decide on affairs within a certain scope.
  • By dividing Pods, small teams with small scale and tacit cooperation can control a part of the resources of the DAO, so as to realize fast decision making and quick actions, allowing DAO’s grassroots to obtain execution power comparable to that of a centralized organization.
  • Make it easier for the DAO to manage its budget by depositing funds into the Pod.
  • By creating a temporary Pod and electing an administrator, it is easy for DAOs to perform time-sensitive actions, such as external asset swaps and asset bids

From Two-layer to Multi-layer

So far, we are talking about a two-layer organization of DAOs and Pods. In fact, both DAOs and Pods themselves can be multi-layered and form an infinite multi-layer system.

Pod to DAO

Formally, the only difference between a Pod and a DAO is that a Pod does not have its own governance token. If a Pod is authorized by the parent DAO to issue its own governance token, the Pod will no longer be a Pod but will have its own independent “sovereignty” and become a DAO eventually. Correspondingly, the Pod’s subordination to the parent DAO evolves into an investment relationship from one DAO to another DAO. In this case, we can think of the parent DAO as an incubator and the Pod as an incubated project, then at a point in time, the Pod can “start on its own” and become a new DAO. For example, indiGG, the Indian branch of YGG DAO, grew much faster than the other branches and started to operate independently, issued its own token and formed an investment relationship with. YGG DAO, which became a kind of “subsidiary” structure.

Independent Pod

As mentioned above, there seems to be an assumption that a Pod must be created by a DAO and must be subordinate to a DAO. However, we believe that the concept of Pod should not be limited to this, as a Pod is essentially a multi-sig wallet so we can also argue that a multi-sig wallet is a Pod. If you created a multi-sig wallet using Gnosis Safe, you are created a Pod. In fact, the Pod vault in Orca is built using Gnosis Safe as its kernel.

Multi-layer structure makes DAO organizations more vitality

A multi-layered structure consisting of Pods and DAOs will always evolve according to business needs. Within a DAO, Pods that cannot effectively achieve business goals will be removed, while successful Pods will be retained and even evolve into a multi-layered Pod structure until they can be separated from the parent DAO and become a new DAO, which may combine with its parent DAO into a larger organism what we can call it a DAO community.

Activating the power of “squad”

In social collaboration, one of the most basic units of collaboration is often not an individual, nor a large organization with a ponderous structure, but a small, relatively flat, closely collaborating team. Such a team has its size limit that is considered in the “squad theory” to be 12 people or less, as the size of a soccer team.

The straw hat gang in “One Piece” are 9 members

Catalyzing DAO to DAO Collaboration

A DAO is a network that participates in extensive collaboration and high-frequency interaction. The most basic form of interaction between DAO and DAO is financial interaction. Some financial interactions involve a large share of the DAO’s treasury and often require a vote by the DAO’s owners. However, more financial interactions tend to involve a smaller share of funds with relatively high frequency that may require significant communication efforts by negotiators. The latter one is not suitable for implent vote resolution, and it is more appropriate to authorize a Pod to complete it. We could build an interim Pod to manage every D2D cooperation involving financial interaction.

Summary

As mentioned above, we have gained insight into the unique concept of Pods from several perspectives:

  • From the perspective of organization, a Pod is an organizational unit, with Pods at the grassroots level often being a squad of close collaboration, in which individuals can give full play to their talents.
  • From a financial perspective, a Pod is a set of packaged assets that can be exchanged, transferred, and mortgaged. Packaging assets into Pods simplifies the transaction process for multiple assets and saves Gas costs.
  • From a business perspective, a Pod is a project, or business unit, under a DAO, which may be temporary or long-lived.

Reference

[1] Pods: The DAOnfall of Token Voting

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PAKA

PAKA

Founders fund in Polkadot ecosystem, running as a DAO venture. Long Polkadot, short Web2.0