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1、Decentralized Autonomous Organization ToolkitI N S I G H T R E P O R TJ A N U A R Y 2 0 2 3In collaboration with the Wharton Blockchain and Digital Asset Project ContentsForewordExecutive summaryIntroduction1 What are DAOs?1.1 Distinguishing characteristics1.2 Understanding the DAO landscape1.3 DAO

2、opportunities and challenges2 DAO operations2.1 Operational strengths and weaknesses2.2 DAO participants and services2.3 The contributor experience3 DAO governance3.1 DAO frameworks3.2 Voting processes4 Legal structures4.1 The need for legal formalization4.2 Traditional legal wrappers4.3 Bespoke leg

3、islative frameworks4.4 Implications of legal structures5 Recommendations5.1 Operational5.2 Governance5.3 Legal and policyConclusionAppendicesAppendix 1:DAO typology assessmentAppendix 2:DAO governance assessmentAppendix 3:DAO governance strategiesAppendix 4:Common open-source DAO frameworksContribut

4、orsEndnotes3467789101012121414151717181920232324262728282930313336Cover:akinbostanci,Getty Images Inside:Getty Images 2023 World Economic Forum.All rights reserved.No part of this publication may be reproduced or transmitted in any form or by any means,including photocopying and recording,or by any

5、information storage and retrieval system.DisclaimerThis document is published by the World Economic Forum as a contribution to a project,insight area or interaction.The findings,interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the W

6、orld Economic Forum but whose results do not necessarily represent the views of the World Economic Forum,nor the entirety of its Members,Partners or other stakeholders.Decentralized Autonomous Organization Toolkit2ForewordDecentralized autonomous organizations(DAOs)are an emerging part of the blockc

7、hain ecosystem and potentially a significant innovation in organizational structures.Modern firms have developed into some of the largest and most powerful enterprises in human history,yet they have been criticized for being too bureaucratic and insufficiently equitable and inclusive.And communities

8、,workers,the environment and other key stakeholders are often left without a meaningful voice in the governance of these enterprises.The DAO phenomenon can be viewed as a technical complement to grassroots and formal efforts to create more responsive organizations.DAOs seek to restructure hierarchic

9、al management set-ups and the classical separation of ownership and control by broadening participation in governance and aligning rewards with labour,contribution and participation.Thus,while DAOs serve functional objectives for blockchain-based communities,such as managing protocol-based networks

10、and applications,facilitating investments,funding public goods and encouraging social interactions,they may also represent a broader innovation for society.The potential to manage the interests,voices and preferences of diverse participants through transparent and open technology is worthy of both c

11、ross-disciplinary interest and careful interrogation.But in using still-maturing technology to address potentially diverging and evolving stakeholder interests,DAOs may face both operational and governance challenges.The legal and regulatory landscape for DAOs is both uncertain and uneven,creating q

12、uestions and risks for participants.How effectively DAOs can scale in size,scope and sophistication while meeting their aspiration of a flat,decentralized organization is a question that communities are exploring in real time.Over the past two years,we have witnessed an explosion of activity in the

13、blockchain-fuelled area now called web3.In 2020,the value of assets locked in decentralized finance(DeFi)smart contracts increased 18-fold,from$670 million to$13 billion.In 2021,the total value locked in DAO treasuries increased by a factor of 40,from$380 million to$16 billion.DAOs offer a significa

14、nt new mechanism for managing and allocating capital or other valuable digital assets.But,as we will explore,the story is larger than that.DAOs are an organizational development the impact of which may be felt across many sectors of business and social activity worldwide.In this toolkit we provide a

15、 set of insights and resources for developers and policy-makers.Our goal is to provide tools to increase understanding,demystify DAO operations,enhance DAO governance and frame the legal and regulatory questions.This resource,the output of a diverse global community including industry leaders,academ

16、ics,technologists and entrepreneurs builds upon our introductory report,Decentralized Autonomous Organizations:Beyond the Hype.It sets forth frameworks for this multifaceted organizational innovation,illustrating the variety of ways to encode relationships,rewards,incentives and collaboration.This t

17、oolkit also outlines the possible liabilities and risks of DAOs,and our hope is to offer all interested stakeholders a useful resource for evaluating,engaging with or developing DAOs.Brynly Llyr Head of Blockchain and Digital Assets,Crypto Impact and Sustainability Accelerator,World Economic Forum,U

18、SADecentralized Autonomous Organization ToolkitJanuary 2023Aiden Slavin Project Lead,Crypto Impact and Sustainability Accelerator,World Economic Forum,USAKevin Werbach Professor of Legal Studies and Business Ethics and Director,Blockchain and Digital Asset Project,Wharton School,University of Pennsy

19、lvania,USADecentralized Autonomous Organization Toolkit3Executive summaryDecentralized autonomous organizations(DAOs)are organizational structures that use blockchains,digital assets and related technologies to allocate resources,coordinate activities and make decisions.DAOs are an emerging part of

20、the blockchain ecosystem.Although the concept of a DAO was theorized in the 1990s,it was not until recently that DAOs began to be built,growing rapidly across sectors.As activity in decentralized finance(DeFi)exploded in 2020,DAOs emerged to help manage resources and serve as a mechanism for collect

21、ive decision-making.In 2021 alone,the value of DAO treasuries expanded by a factor of 40,from$380 million to$16 billion,and the number of participants increased 130 times from 13,000 to 1.6 million.1 From finance to social networking to philanthropy,these digital,communal organizations attempt to re

22、imagine how we connect,collaborate and create.While there is a wide variety of DAOs,many face similar and significant operational,technical,governance and legal challenges.To help address these challenges this report offers a set of tools for developers,policy-makers and other stakeholders engaging

23、with DAOs.Crucially,its aim is not to provide a comprehensive analysis of the DAO ecosystem but to offer a set of adaptable resources for key stakeholders to help realize the full potential of this emerging form.1.What are DAOs?DAOs attempt to enable communities to achieve their goals while diminish

24、ing the need for intermediaries to manage governance and operations.DAO tokens allow holders to vote on changes to the organization.The use of blockchains and digital assets reduces the need for trust in third parties and provides a means of rewarding contributors.By decentralizing governance across

25、 several stakeholders and disclosing operational and financial information,DAOs can reduce information and power asymmetries.In recent years there has been an explosion of DAO activity,with Decentralized Autonomous Organization Toolkit4builders developing DAOs as well as tooling and infrastructure t

26、o facilitate the process of launching and managing them.Nonetheless,DAOs face a variety of operational,technical and legal challenges.2.DAO operationsCode-driven and community-oriented,DAOs operate differently from traditional organizations.By enabling stakeholders to participate directly in operati

27、ons and governance,DAOs have the potential to align the interests of a variety of stakeholders more equitably.However,DAOs face several challenges in people operations,coordination and more.Strategies including decentralization,standardized onboarding practices,specialized working groups and compens

28、ation modalities,as well as the use of DAO tooling and infrastructure,can help address many of these challenges.3.DAO governanceDAOs employ a variety of governance processes to balance efficiency and effectiveness.Governance frameworks codify an organizations purpose,roles and responsibilities,incen

29、tives and more in smart contract code.Voting processes seek to increase efficiency while mitigating common governance issues such as rational apathy and plutocracy.Indeed,DAOs are beginning to codify a variety of strategies to address operational,legal,technical and economic governance challenges.4.

30、Legal structuresDAOs use a variety of strategies to address legal and regulatory questions.Some adopt a formal entity structure,or wrapper,to define legal treatment.Several legal wrappers,including unincorporated non-profit associations(UNA)and limited cooperative associations(LCA),are available to

31、DAOs.Yet using a legal wrapper may involve financial obligations and other requirements.Bespoke legal frameworks offer DAOs an alternative path to recognition.Legal structures used by DAOs have implications beyond corporate law that extend to securities law,the taxation system and anti-money launder

32、ing requirements.Factors such as mission,operational activity and constituency determine the best legal response to the issues a DAO raises.5.RecommendationsThe needs of a DAO depend on its purpose,community and composition;it is thus difficult to recommend strategies for DAOs generally.In addition,

33、strategies already implemented may need to be adapted as a DAO evolves.Nonetheless,DAOs are beginning to create strategies to operate and govern themselves effectively.Rather than provide an exhaustive set of recommendations,this report offers a starting point for DAOs to develop effective operation

34、al,governance and legal strategies.Defining goals,developing administrative practices and dividing labour can help DAOs operate.DAO governance can benefit from building and maintaining strong voting practices,accountability processes and checks and balances.Decentralized Autonomous Organization Tool

35、kit5Decentralized autonomous organizations(DAOs)are organizational structures that use blockchains,digital assets and related technologies to direct resources,organize activities and make decisions.Community-oriented and code-driven,DAOs attempt to provide an alternative to traditional organizationa

36、l forms by making operational information publicly available and enabling members to participate in governance.The concept of DAOs has been around for some time.In recent years,however,the DAO ecosystem has undergone explosive growth in areas ranging from finance to social networking to philanthropy

37、.The combined value of DAO treasuries increased by a factor of 40(from$380 million to$16 billion),and total DAO participants skyrocketed 130 times in 2021 alone.2 Yet DAOs also face significant operational,governance,legal and regulatory challenges.While the DAO ecosystem is diverse,there are common

38、alities in the operational,governance and legal and regulatory questions different DAOs must answer.The aim of this report is to offer resources for developers,policy-makers and other stakeholders seeking to build,engage with or evaluate DAOs.Building on the Forums previous report in this series,Dec

39、entralized Autonomous Organizations:Beyond the Hype,Section 1 of this report defines DAOs,providing a brief history and discussing the opportunities and challenges they create.Section 2 offers an overview of DAO operational processes,constituents and services,describing how DAOs differ operationally

40、 from traditional organizations and their advantages and disadvantages.Section 3 provides a detailed discussion of DAO governance processes,challenges and mitigation strategies.Section 4 delivers an overview of the major legal and regulatory questions DAOs must face.Section 5 includes a discussion o

41、f best practices for DAO operations and governance,providing suggestions for crypto developers on how to optimize performance.In a series of appendices,the report offers tools for analysing DAOs from a typology,operational,governance and legal perspective.Rather than provide a comprehensive analysis

42、 of a heterogenous and burgeoning ecosystem,this toolkit offers a set of general-purpose,modular tools to understand this emerging organizational form and explore how different DAOs might reach their full potential.3 This report is the product of an international collaboration among blockchain and d

43、igital-asset experts,established firms,policy-makers,non-profits,legal experts,academics and others.It forms the second output of the DAO Project Series,co-led by the World Economic Forums Crypto Impact and Sustainability Accelerator(CISA)and the Wharton Blockchain and Digital Asset Project(BDAP).A

44、forthcoming report will examine impact DAOs,reflecting on early attempts to leverage this novel organizational form for social impact.CISA is a project of the World Economic Forum that seeks to drive progress on environmental,social and governance(ESG)targets for the crypto ecosystem.Building upon t

45、he work of the Forums Blockchain and Digital Assets platform and a global network of contributors,the initiative explores emerging topics across the crypto ecosystem,such as DAOs,in an attempt to build coalitions,offer guidance and shape a cohesive narrative on crypto policy and impact.BDAP is a res

46、earch initiative at the Wharton School of the University of Pennsylvania,focused on the evolving blockchain phenomenon.Drawing on world-class Wharton/Penn faculty,alumni and students,as well as relationships with academics,government officials and industry experts from around the world,BDAP seeks to

47、 enhance understanding and bridge gaps among stakeholder communities.IntroductionDAOs differ widely,but many must answer a common set of operational,governance and legal/regulatory questions.This toolkit aims to help that process along.Decentralized Autonomous Organization Toolkit6What are DAOs?1DAO

48、s are an experiment in governance.The use of open-source software,blockchain technology and programmable incentives may enable them to offer enhanced transparency and adaptability.Yet they also face a host of challenges.DAOs aim to enable communities to achieve their goals while reducing the need fo

49、r intermediaries or centralized leadership to manage operations.DAOs typically run on public,permissionless blockchains,with their actions and governance encoded in open-source software and enforced by smart contracts.4This section offers an overview of what distinguishes DAOs from traditional organ

50、izational forms,a brief history and taxonomy of the DAO landscape,as of early 2022,and a discussion of the opportunities and challenges DAOs create.Although the ecosystem is heterogenous and evolving,DAOs tend to have three distinguishing characteristics:1.Use of blockchains,digital assets and relat

51、ed technologies2.Allocation and coordination functions3.Decentralized governanceIn practice,different DAOs will adhere to these criteria to varying degrees.For example,some DAOs decentralize governance more extensively than others.Likewise,as a DAO evolves,the degree to which it adheres to each dime

52、nsion may change as well.Throughout this toolkit,case studies are provided to ground the conclusions in practice and provide a nuanced view of the DAO ecosystem.Box 1 offers a flow chart for evaluating whether an entity could be classified as a DAO.Distinguishing characteristics1.1Decentralized Auto

53、nomous Organization Toolkit7Leverages blockchains,digital assets and related technologies?Blockchains,digital assets and related technologies are the means by which DAOs can make financial and operational information publicly accessible.Although some DAOs make use of subgroups to manage certain proc

54、esses,in many cases involvement in DAO operations does not require trust in a third-party intermediary or centralized manager to take certain actions.Digital assets can be used to reward or incentivize contributors to a wide variety of ends.Smart contracts can execute actions based on pre-existing p

55、arameters,streamlining DAO operations.Moreover,the open-source nature of public blockchains and smart contract logic enables developers to rapidly create or modify DAOs.Coordinates activities and/or allocates resources?Coordination and allocation functions mean that DAOs,like traditional firms,manag

56、e resources,which may mean coordinating activities or allocating capital.For example,DAOs may compensate people for work they do,oversee the operation of a protocol providing financial services or direct funds to the development of public goods.Is governed primarily on a decentralized basis?Decentra

57、lized governance means that DAO participants work together to make decisions,voting on and ratifying proposals.For example,DAO participants can vote to allocate resources from a treasury to a project.In assessing a DAO,it is critical to understand how decentralized its governance is in practice,as p

58、olitical,legal and economic factors can have de facto centralizing effects,concentrating power in a minority.Critically,decentralized governance can make DAOs more resilient,mitigating risks stemming from centralized control.Section 3 offers a discussion of DAO governance and Appendix 2 provides an

59、evaluation framework to help determine how collaboratively a DAO is governed.Classifying organizations as DAOs BOX 1123Although the term“DAO”was coined in the 1990s,it was not until recently that developers began building these entities.5 The first functional organization calling itself a DAO,known

60、simply as The DAO,was created in 2016 as a platform for collective investment in projects on the Ethereum blockchain.After raising about$150 million in value in less than a month from more than 11,000 participants,a vulnerability in the DAOs code was exploited,and The DAO was abandoned as part of a“

61、hard fork”in the Ethereum network to restore the funds.6Subsequent developers began creating enhanced DAO tooling and infrastructure to mitigate the limitations of The DAO and to make launching,managing and operationalizing DAOs easier.This activity was complemented by the growth of blockchain-based

62、 platforms more broadly as well as the emergence of significant markets for DeFi and non-fungible tokens(NFTs).Understanding the DAO Landscape1.2Friends with Benefits(FWB)is a community DAO for web3 creatives.7 FWB requires all interested parties to submit an application in addition to hold-ing$FWB

63、tokens.The DAO enables large-scale coordination of this decentralized social group to fund and implement projects ranging from publish-ing content to producing events.The growing FWB community publishes editorial content and holds live activities,such as informal networking oppor-tunities,in additio

64、n to hosting online conversations among members.Friends with BenefitsBOX 2There are many types of DAOs,as illustrated in the case studies throughout this report.In Decentralized Autonomous Organizations:Beyond the Hype,the World Economic Forum and Wharton classified DAOs into nine categories accordi

65、ng to their means and objectives:What is the primary purpose of the DAO?Is it generative,seeking to perform an ongoing function?Associative,seeking to bring together a community?Or is it ad hoc,developed to serve a specific,one-off purpose and then dissolve?How does the DAO plan to achieve its objec

66、tives?Does it facilitate an activity,allocate financial resources or oversee the actions of people?Decentralized Autonomous Organization Toolkit8As a DAO evolves,its purposes and means may change;a DAO that begins as a flashmob may grow into a community DAO over time.Indeed,the flexibility to adapt

67、to changes over time is a key feature of this novel organizational form.DAOs may also be categorized based on their governance mechanisms and legal structures.Section 3 provides a discussion of DAO governance,and Section 4 offers an analysis of legal arrangements that DAOs are adopting.DAOs attempt

68、to solve several problems created by traditional centralized organizations.Centralization creates efficiencies.However,by consolidating decision-making capacities and resources(both financial and informational),centralization can interfere with alignment among stakeholders,accountability,participati

69、on and operational resilience.In a DAO with an equitable distribution of tokens,many token holders,not just the leadership,can play a role in decision-making.DAOs that make operational and financial information viewable on a blockchain can partly address the problem of information asymmetry,providin

70、g contributors and the public with actionable information.Likewise,by leveraging token-based economic incentives,DAOs can be structured to reward contributors in an equitable manner and direct activity towards communal goals.Moreover,through smart contracts,DAOs may streamline decision-making execut

71、ion.Finally,the flexible,open nature of DAOs can enable contributors to discuss and develop their goals;as a DAO evolves its community can opt to deploy resources towards new projects,expanding its impact.DAO opportunities and challenges1.3Gitcoin is a platform for building and funding digital publi

72、c goods,such as open-source software.To date,it has provided more than$40 million in funding via hackathons,grants,crowdfunding and its accelerator.Gitcoin rewards grants via quadratic funding,which identifies community support by weighing the number of contributors more than the amount funded.Gitco

73、in launched its GTC governance token in May 2021 and is in the process of progressively decentralizing via its Gitcoin DAO.The Gitcoin DAO oversees the community treasury as well as a gov-ernance framework for delegates called stewards to participate in key ecosystem decisions.Gitcoin DAO plans to g

74、radually introduce more formal frame-works for the ongoing development and mainte-nance of Gitcoin managed through on-chain voting.Gitcoin DAOBOX 3However,DAOs also have limitations.By attempting to engage many contributors in governance decisions,DAOs can create inefficiencies.Without clearly defin

75、ed roles,many DAOs face coordination challenges.These are often augmented by inadequate tooling,preventing some DAOs from efficiently performing basic functions.While functional DAOs that power a network or application may not require extensive coordination,community DAOs may encounter challenges wh

76、en scaling.DAOs may also face governance challenges,such as voter apathy and concentration of power.For example,while in some cases a change in strategy may represent the majority opinion of a DAOs membership,in other cases it may be the outcome of a resource-rich minority voting in its own interest

77、.It is worth noting that this risk is also present in traditional organizations.Like the blockchains on which they operate,DAOs also confront limitations of scalability and cybersecurity vulnerabilities as well as adversarial challenges such as protocol-level attacks.DAOs may violate contributor pri

78、vacy through the transparent recording of their actions,or they may be opaque in operation,making it difficult for participants to fully understand the risks.Perhaps most acutely,DAOs confront a lack of legal and regulatory clarity.Although DAOs face many challenges in comparison with traditional or

79、ganizations,centralized organizations have benefited from a long history of trial and error.DAOs are an experiment in governance and,with time,it is possible that many of these challenges will be addressed in a decentralized manner.This toolkit delves into these challenges and identifies potential r

80、esponses.Decentralized Autonomous Organization Toolkit9DAO operations2DAOs may be able to engage different stakeholders more equitably and inclusively,but they also face operational challenges that may limit their efficacy.This section addresses how DAOs operate differently from traditional organiza

81、tions.It also reviews the types of DAO participants and services and summarizes the processes for identifying,joining,contributing to and being compensated by a DAO.It is illustrative to imagine how a traditional,centralized organization could change if it were operated as a DAO.A digital marketplac

82、e designed to connect buyers and sellers,such as Amazon or eBay,has a board of directors,executives and staff with defined responsibilities and powers.The company mediates disputes,sets fees and develops policies for the users of the platform.These companies are ultimately answerable to the sharehol

83、ders,while users of the platform have limited ways to influence company policies,and other stakeholders have even less agency.Likewise,centralized leadership creates information asymmetries,further disenfranchising many stakeholders.As a DAO,by contrast,the marketplace may be able to harmonize the i

84、nterests of various stakeholders.Rather than having a board of directors and executives making decisions,buyers and sellers could participate directly in determining how fees should be assessed and policies applied.Tokens could be used to reward buyers and sellers who act in line with the operationa

85、l goals of the platform,by attaining high customer ratings,for example.As with other alternative forms of organization,the marketplace DAO has the opportunity to more equitably take into account the interests of multiple platform stakeholders.However,DAOs also face operational challenges.Recruiting,

86、onboarding and managing contributors can be tricky.DAOs can confront legal and logistical difficulties in establishing contractual relationships,opening bank accounts and engaging with external service providers.Furthermore,DAOs often struggle to maintain and transfer institutional knowledge to Oper

87、ational strengths and weaknesses2.1Decentralized Autonomous Organization Toolkit10newcomers,potentially giving early contributors disproportionate power.The uncertainty of compensation mechanisms may make it difficult for DAOs to retain high-quality talent.Pseudonymous DAOs may have difficulties dis

88、tinguishing genuine contributors from inauthentic users or in meeting compliance requirements.In an attempt to reduce legal and operational challenges,some DAOs limit themselves to holding or interacting with digital assets,potentially curtailing their reach.DAOs are also affected by the digital div

89、ide and may struggle to engage contributors with limited access to power and connectivity.Moreover,a lack of digital literacy or language skills may make it difficult for contributors to participate.DAOs have pioneered a variety of mitigation strategies in an attempt to address such challenges.Many

90、have adopted a progressive approach to decentralization,where a small group manages certain critical tasks of the organization and then transitions decisions to community vote and smart contracts although,depending on how this transition is executed,it may create other challenges.8 By implementing s

91、maller structures,such as sub-DAOs,or by delegating powers for specific tasks,DAOs can streamline day-to-day functioning.For example,as DAOs scale,many opt to employ a representative model,enabling token holders to delegate their vote to an individual or group charged with a specific mandate.Some de

92、legates handle financial decisions,while others engage in technical operations.By specializing the functions of delegates,DAOs can improve the alignment between contributor skills and organizational needs.Orca,for example,offers tooling for DAOs to develop smaller working groups,or pods,that can tak

93、e on specific tasks as required.DAOs may benefit from localization;by empowering community members to engage local participants,especially during onboarding,DAOs can more effectively interact with their communities.DAOs can also make use of time-limited goal-setting processes,such as season planning

94、,to streamline operations.By identifying active contributors and rewarding them,DAOs can incentivize increased participation.For example,Gitcoin DAO makes use of a system of steward health cards that measure factors such as voting activity to encourage participant engagement.9 Likewise,by compensati

95、ng delegates,DAOs can empower a broader range of participants to contribute,potentially enhancing equity and efficacy.Delegate compensation can,however,also lead to further resource concentration.Other DAOs have implemented weighted voting,rewarding participants who engage more often.DXdao has non-t

96、ransferable assets associated with addresses used to vote on proposals,so that each time that token is used,holders receive more voting tokens.Because a DAO is a programmable technology that can automatically weight and assess actions based on various inputs,there can be any number of ways to struct

97、ure,reward and encourage positive behaviours,as defined by each DAO.Launched in August 2021,NounsDAO is the gov-erning body of the Nouns ecosystem,a platform for the generation and auctioning of generative NFT art projects.Nouns are on-chain,32x32-pixel avatar NFTs built on Ethereum,each with its ow

98、n distinct and randomly selected set of character traits.Each day,the Nouns protocol creates and auctions a new Noun to the highest bidder,and the NounsDAO treasury collects 100%of the ETH earnings(the native cryptocurrency of the Ethere-um blockchain)generated from nine out of 10 of these daily auc

99、tions.For the first five years of the projects operation,the proceeds from every 10th Noun auction are delivered to a multisignature(multisig)wallet jointly owned by the 10 Nouns ecosystem founders(known as the“Nounders”).Each Noun carries membership and voting rights for the NounsDAO,so all Noun ho

100、lders have a vote in governance matters of the NounsDAO and may submit proposals for member approval.As of October 2022,the NounsDAO treasury held 29,243 ETH.These funds are allocated through proposals by NounsDAO participants(i.e.holders of Nouns,or their third-party assignees)to projects that furt

101、her the long-term growth and global visibil-ity of the Nouns brand.NounsDAO treasury funds have been used to fund projects such as commis-sioning monthly Nouns-themed comic books and the establishment of Nouns Studio1,a branding platform for the Nouns ecosystem.The Nouns Foundation was established t

102、o provide a legal entity to interface with non-crypto native organiza-tions and fiat-based infrastructures to facilitate the success of these projects.NounsDAOBOX 4Decentralized Autonomous Organization Toolkit11Once launched,a DAO can distribute tokens to members.Over time,contributors can perform a

103、 variety of membership roles.There are several types of DAO participants:Founders or founding teams can develop a unifying mission for a project and begin building.If successful,founders can attract a wide variety of participants to contribute to the DAO.Treasury multisig signers oversee a DAOs mult

104、isig wallet(a wallet requiring separate keys to authorize a transaction),allocating resources in line with the DAOs purpose.Gnosis Safe,a popular multisig wallet for DAOs,now operates as a DAO itself.Deployment multisig signers carry out changes to smart contracts based on community votes,with timel

105、ock functions providing a community check on changes.Delegates in some DAOs are appointed to representational councils to serve specialized functions.Core contributors may be entitled to receive token incentives for ongoing contributions to the DAO.Token holders are the broadest category of DAO part

106、icipants.DAO tokens can provide governance functionality,reward for direct efforts or other utility relative to their potential benefits as investments.In addition to DAO participants,there is also a vibrant ecosystem of providers of DAO services,or tooling.Business-to-DAO(B2DAO)organizations provid

107、e tools to facilitate DAO community management,discovery and analytics,governance and voting,administration and more.10 Many of them are centralized services operated by traditional companies,even though they are employed for DAOs.Discord,originally created for voice chat in multiplayer games,is a p

108、opular community-management and discussion platform for DAO participants.Analytics services such as DefiLlama aggregate data such as total value locked(TVL),one measure of the overall value of crypto assets in a project,to help participants understand the DAO ecosystem.Snapshot enables DAOs to suppo

109、rt a wide variety of voting processes.Administrative tools support processes including onboarding,compensation,skills development and creating job boards.Providers of DAO operating systems offer libraries of composable DAO tooling to create off-the-shelf functionality for communities.Furthermore,pro

110、viders such as Syndicate offer solutions for investing in off-chain assets.Finally,some functions that are likely to be repeated across DAOs by groups of contributors that specialize in a specific task,such as treasury management,may also be performed by service DAOs,such as Llama,rather than by ind

111、ividual contributors.Nonetheless,there is a widely recognized need for further DAO tooling.Many existing B2DAO services have limitations stemming from their off-chain nature or costliness.For example,much DAO voting takes place off-chain on services that may limit the transparency and accountability

112、 of DAO governance.As tools are emerging to provide more services to DAOs on-chain,some DAOs are making use of current tooling as an intermediary step towards leveraging tools that are fit-for-purpose and cost-effective.DAO participants and services2.2Although the experiences of DAO contributors are

113、 heterogenous and dynamic,it is possible to identify some commonalities across participant types.The first step in participating in a DAO is to identify a community that aligns with an individuals skills and interests.Discovery and analytics services offer information to new participants about vario

114、us DAOs and how they can contribute.Individuals can begin exploring DAOs by attending community calls,joining public Discord servers or providing feedback on open proposals.Once an individual has identified a DAO to which they would like to contribute,they can become a member by fulfilling its joini

115、ng criteria and,if available,undergoing onboarding.Although onboarding practices differ across DAOs,they generally consist of conveying the mission of the DAO,facilitating connections with existing DAO contributors,providing relevant educational resources and plugging an individual into relevant sub

116、groups within the DAO.11 Some DAOs have adopted a seasons-based approach to adding contributors,whereby new participants can apply to join for a set period to work on a specific project.12 Once onboarded,an individual can begin to demonstrate their value by supporting the work of the DAO.The type of

117、 work will depend on the kind of contributor and the needs of the DAO.Content creators,for instance,can identify a marketing asset required by the DAO and then create and publicize it to demonstrate their skills.Other contributors begin to participate in a DAO by completing one-off projects,such as

118、coding new software features,The contributor experience2.3Decentralized Autonomous Organization Toolkit12for a reward.This process enables an individual to develop a rsum of skills,demonstrating their value to the community.Indeed,there is even a growing suite of tools to enable contributors to atte

119、st to and verify their skills within a DAO.13 Eventually,a contributor may be able to secure longer-term engagements with a DAO.14 Moreover,individuals can and do contribute to multiple DAOs simultaneously.For contributors,relevant activity often occurs on community-management platforms such as Disc

120、ord and Telegram.Developers,for instance,may find discrete tasks in a Discord server or on a bounty board,which collate projects nominated by community members and associated rewards.With DAO contributors participating around the world,many of them tend to work asynchronously,making progress and the

121、n sharing with the group for review.Work may be reviewed by working groups composed of contributors with specialized skills,such as software engineers,or by general-purpose review bodies.Apart from their individual work,some contributors also participate in operational functions such as treasury man

122、agement and voting oversight.Treasury-management functions include budgeting,reporting and diversification.Other contributors participate in voting oversight.Some DAOs allow all token holders to vote,while others restrict voting to those who perform specific tasks or stake.To limit costs of on-chain

123、 transactions and facilitate signalling of likely outcomes,DAO voting typically occurs in off-chain decentralized platforms such as Snapshot.Compensation practices vary widely across DAOs.CabinDAO,Lido Finance and Gitcoin employ workstreams to iterate on their compensation practices.Workstreams are

124、empowered to create their own budgets,practices and compensation structures.By dividing the work of the DAO into different streams,and segmenting compensation accordingly,DAOs can tailor compensation practices to the needs of different contributor groups.Budgeting for working groups can be further s

125、egmented into quarters or seasons.Other DAOs,such as Yearn Finance,leverage a tiered compensation structure,awarding funds to individuals depending on their level of contribution.While some contributor-compensation modalities may be functionally similar to those of a traditional firm,DAOs can also e

126、mploy a mechanism for token holders to remove someone from their position at any time.Yearn DAO is the decentralized community formed in July 2020 to govern and operate the Yearn Finance protocol(formerly iEarn),a DeFi lending aggregation,yield generation and insurance protocol on the Ethereum block

127、chain.To achieve a“fair launch”,Yearn lead developer Andre Cronje passed ownership and governance of the yearn.finance suite of tools and smart contracts to the community through a token distribution to liquidity providers.Yearn DAO is pursuing increasing levels of decentralization over time,accompl

128、ishing more decision-making transparently on-chain when operationally feasible.Yearn DAO is currently developing Governance V2 to optimize delegation,special committees,voting and other processes.The communitys description of Yearn DAO as an emergent and evolving experiment in decentralized collabor

129、ation is included in The Blue Pill book.15 Contributors reward each other with points that convert into governance tokens through Coordinape,a peer-allocation rewards-and-feedback tool developed by yearn.finance.Yearn DAOBOX 5DAO contributors are compensated for their work through a variety of mecha

130、nisms.For example,Coordinape is a widely used peer-assessment platform that enables the DAO community,itself,to apportion grants and salaries to participants.Contributors use Coordinape to report their work,which is then reviewed by a group that determines what funds the contributor will earn.While

131、some DAOs use the tool to compensate all contributors,others use it for specific contributor tiers.Other contributors are compensated for their performance in predefined roles within working groups.DAO contributors are typically paid in native DAO tokens,stablecoins or other crypto-assets.The hybrid

132、 compensation model can incentivize contributors to continue working in the DAO,thereby increasing the value of the native DAO token while also providing short-term liquidity in the form of a stablecoin.DAO contributors can also be compensated via grants funding allocated to individuals who propose

133、projects to the DAO that are approved by the grant-making body,typically a group of community-elected contributors who review grant requests and distribute resources.Bounties are automatically distributed to DAO contributors upon completion of a task,eliminating friction in typical payment processes

134、.Furthermore,some DAOs offer full-time roles that remunerate contributors with salaries that can be paid out in stablecoins.DAOs can also institute revenue-sharing practices,where contributors are compensated according to the revenue generated by a product they create.Decentralized Autonomous Organi

135、zation Toolkit13DAO governance3Governing a DAO is a complex,dynamic process.To aid this effort,DAOs use a variety of voting processes,tools and governance procedures.In recent years,DAOs have experimented with a wide variety of governance processes aimed at enhancing their performance,while also rei

136、magining how these organizations can incorporate more participatory models of decision-making.Given their heterogeneous nature,DAOs will require a variety of different governance models.Governing a DAO is a complicated,dynamic process.To aid this effort,many develop or adopt governance frameworks ru

137、les of the road that can codify a DAOs purpose,contributor roles and responsibilities,incentive structures and more in smart contract code.DAO governance frameworks,or simply“DAO frameworks”,are smart contract templates that can be used to deploy a DAO on a blockchain.A DAO framework should be suite

138、d to a DAOs vision:a function or purpose for existing,which may be expressed by a person,team or community.DAO frameworks often specify the roles of treasury multisig signers,core contributors and token holders,sometimes dividing token holders into finer gradations based on their governance powers.T

139、hey may also identify smart contract protocols that are upgradable or redeployable based on a vote of one or more groups.Some DAOs may opt to use multiple frameworks.16Many frameworks also provide a“factory contract”,which deploys copies of the templates and a web interface for interacting with the

140、factory contract and managing the resulting DAO.DAOs deployed using these frameworks adopt the on-chain governance that is encoded into the template and,often,the off-chain governance encoded into the management interface.The system of DAO frameworks is evolving rapidly.While some offer specialized

141、features for governing tools such as multisig wallets,others provide general-purpose functionality.17 Broadly,DAO frameworks are becoming more modular,extensible and interoperable.18 Likewise,DAO frameworks are increasingly being developed beyond the Ethereum ecosystem on blockchains such as Solana,

142、Polkadot and Cosmos.The table in Appendix 4 offers an overview of common DAO frameworks.DAO frameworks3.1Decentralized Autonomous Organization Toolkit14DAOs have different mechanisms to allow contributors to participate and vote.Certain membership levels or governance-token amounts committed in supp

143、ort may be required to make proposals or to vote,and there may be several stages or requirements before something is subject to a formal on-chain vote.For example,Uniswap has a six-step process:(1)initial forum post to a proposals section;(2)discussion on a community call and/or Twitter space;(3)off

144、-chain Snapshot“temperature check”proposal meeting a quorum requirement of tokens in support;(4)updated Snapshot proposal in response to feedback;(5)Snapshot vote meeting additional quorum requirements;(6)escalation to on-chain voting,requiring a still-higher quorum requirement.DAOs in which votes c

145、an have significant financial implications,and those with a greater range of decisions subject to voting,will likely have more extensive voting processes.Voting processes3.2The dYdX protocol is a decentralized exchange built on Ethereum.dYdX allows users to exchange assets without intermediaries.dYd

146、X token holders can propose and vote on changes to the protocol they receive governance powers proportionate to their total owned and delegated tokens.19Creating a dYdX Request for Comments(DRC)is how participants can propose governance improvements.Anyone can create off-chain DRCs and participate i

147、n the discussion on improvements.Once proposed,a DRC is posted on the relevant fora for consideration and debate.As a DRC reaches a consensus,community members holding more than 10,000 dYdX can initiate a vote off-chain.If a consensus is reached,a dYdX Improvement Proposal(DIP)can be submitted by a

148、community member holding enough proposition power for a vote on-chain.Next,a smart contract initiates an on-chain DIP based on the result of the DIP vote off-chain.Proposals must then pass a predetermined threshold based on the type of proposal.20dYdX protocolBOX 6DAO voting processes balance effici

149、ency and effectiveness considerations.They seek to avoid familiar problems in governance systems,such as rational apathy(where voters do not participate because it requires time and effort,but each voter has a minimal impact on outcomes)and plutocracy(a concentration of power deriving from wealth).T

150、oken-based quorum voting is the simplest form of voting,used in many leading DAOs,including Uniswap and Compound.For a proposal to be submitted and passed,a certain number or percentage of tokens must participate.Selecting the proper quorum requirements can be challenging.At launch,Uniswaps governan

151、ce protocol required 1%of the total token supply to vote in favour of submitting a proposal for a vote and a 4%quorum to pass the proposal in favour.The first governance vote to reduce the proposal and quorum thresholds narrowly failed to meet the quorum despite the proposal attracting the support o

152、f 98%of the votes cast.The Uniswap community later voted to reduce the proposal threshold to 2.5 million tokens(0.25%of total supply).Over time,DAOs have developed alternative approaches to quorum thresholds.Some DAOs support the delegation of voting or proposal power to others through a representat

153、ive system,while others provide greater voting power to individuals who“lock up”or stake their tokens in an escrow smart contract for a fixed amount of time.21 While DAO frameworks support a wide variety of voting processes,many DAOs opt to implement complex voting practices off-chain through tools

154、including Snapshot,Discourse and Commonwealth.This section provides an overview of a variety of voting processes leveraged by DAOs.Continuous approval voting allows new proposals to be submitted at any time,as long as they surpass the voting weight of the last successful proposal implemented.The mor

155、e votes there are on the systems current state,the more secure the system is from any“rogue”proposals.However,this can make it harder for proposals to overcome the status quo.22 Optimistic governance attempts to reduce voter fatigue by dramatically lowering the number of proposals upon which a token

156、 holder is expected to vote.This model assumes that proposals pass unless there is a strong objection,requiring a rejection threshold rather than an approval quorum.The rejection threshold is usually much lower than a typical approval quorum,meaning more voices may be heard in this process.However,t

157、his model still relies on active monitoring of proposals and adequate contestation periods to prevent problematic proposals slipping through.Delegation allows token holders to outsource decision-making and/or direct their proposing Decentralized Autonomous Organization Toolkit15and/or voting rights

158、to value-aligned people or groups they trust.Delegation is similar to proxy votes in traditional finance.Delegates can be individuals or other DAOs.Many DAOs elect councils or committees as trusted token-holder representatives.These representatives act as a quasi-board of directors,often elected via

159、 a decentralized election process that lacks authority to act without input and support from the broader community.They may be elected on a regular basis or by fulfilling a delegation threshold that runs on a rolling basis.Some representatives step in to vote on proposals only when token holders fai

160、l to reach a quorum.Since each council or committee member usually has only one vote,the tendency towards plutocratic decision-making is also reduced.Representatives abusing their position may be removed by token-holder vote.Several protocols are moving towards NFT-based voting that moves away from

161、a one-token,one-vote paradigm towards a one-person,one-vote model.NFT-based voting may mitigate the risk of plutocracy common to token-weighted voting that has been well outlined by Vitalik Buterin.23 DAOs experimenting with NFT-based voting include Optimism,Element Finance and Marinade Finance.Foun

162、ded in 2022,the Optimism Collective is a DAO designed to develop incentive models to encourage the development of public goods.Optimism uses a bicameral approach to DAO governance.The token house,constituted by all OP token holders,determines protocol incentives and upgrades.The citizens house,compo

163、sed of non-transferable token holders,is responsible for the funding of public goods.This division of labour seeks to optimize the entity by taking advantage of specialization.The Optimism Foundation is a non-profit focused on growing the collective;it has pledged to donate all profits from Optimism

164、s core sequencer to the development of public goods elected by the collectives citizens house.24Optimism CollectiveBOX 7 Quadratic voting is another method that attempts to reduce the tendency towards plutocracy and is employed by Gitcoin DAO.Votes are counted according to their square root,so 100 d

165、ifferent token holders voting one token for a proposal will have greater weight than one large holder casting 200 tokens.Quadratic voting systems must address the challenge of Sybil attacks,whereby one actor simply splits their tokens between multiple wallets.Given the challenges outlined above,an i

166、ncreasing number of protocols are trending towards governance minimization or limiting the number of decisions to be made by humans,often via automation at the technical layer.This results in a streamlined governance system,but the more automated governance becomes,the less adaptive the protocol wil

167、l be,and it is unclear how these protocols will stand the test of time as parameters ossify.The table in Appendix 3 summarizes voting procedures that can be used to address various DAO governance challenges.Decentralized Autonomous Organization Toolkit16Legal structures4DAOs today confront a fragmen

168、ted and uncertain regulatory landscape.The legal and regulatory questions raised by DAOs fall into two primary categories:the legal structure of the DAO itself,and how regulators and policy-makers might view the activities in which a DAO engages.The available legal options,and the regulatory respons

169、es,will depend on the jurisdiction.In addition,while this section is accurate at the time of publication,the legal environment for DAOs is subject to rapid legislative and regulatory developments.A DAO may be wrapped in a formal entity structure that is explicitly established to define its legal tre

170、atment.That entity may use an established legal form or,in some jurisdictions,bespoke arrangements created specifically for DAOs.Both options are discussed in this section,without taking a position on the best approach for any particular DAO.25The primary reason to establish a legal wrapper is to pr

171、ovide a set of useful,or even necessary,legal rights.One of the most important is limited liability,under which participants are responsible at most for their own investment.A legal entity can also enter into contracts,own property,have employees,pay taxes and sue in its own name.If a DAO lacks a le

172、gal wrapper,these functions must either be done by individual participants or by some associated legal entity,such as a corporation that performs the initial development work.However,establishing a legal wrapper has costs,both financial and in terms of the restrictions it imposes.Wrappers needing re

173、gistration may require the advice of legal counsel in the relevant jurisdictions,although the registration itself is typically inexpensive.Some DAO participants may find registration with a government agency inconsistent with decentralization or their desire for pseudonymity.In the US,for example,un

174、der the Corporate Transparency Act(CTA)adopted in 2020,entities registering with states or formed under the law of a foreign country and registered to do business in the US will be required to report beneficial ownership information on an initial and ongoing basis to the Financial Crimes Enforcement

175、 Network(FinCEN)of the Treasury Department.26 This requirement may be impossible for some DAOs,such as those with pseudonymous members,to meet.Even if a DAO does not explicitly create a legal wrapper,it may be recognized by default under the law as an unincorporated association or a partnership.27 A

176、lternatively,courts may directly evaluate its legal status.Although rare,courts also have the option to“pierce the corporate veil”and hold participants personally liable even when legal formalities exist,although this remedy is generally used only when the entity structure is somehow improper.The ne

177、ed for legal formalization4.1Decentralized Autonomous Organization Toolkit17Regulators may act where a DAO appears to have been established as a means of evading legal oversight.In a recent enforcement action,the US Commodity Futures Trading Commission(CFTC)sanctioned bZeroX and its two founders for

178、 improperly offering unregistered margin trading in digital-asset commodities.More controversially,the CFTC also sanctioned Ooki DAO,which it concluded was an unincorporated association operating as a successor to bZeroX,engaging in identical activities with active participation from the same founde

179、rs.The order suggested that any participant in Ooki DAO governance could be held responsible,raising questions about the scope of contributor liability.28 Whether the CFTC will follow through,and whether other regulators will take a similar approach,remains to be seen.Some legal rights have blockcha

180、in-based analogues.For example,a smart contract can execute and enforce agreements.However,while smart contracts may offer the benefits of decentralization and immutability,they also have significant limitations compared to legal contracts.29 Furthermore,if a development corporation establishes a DA

181、O,the absence of a recognized legal entity may make it difficult to transition control of functions to the DAO community,and regulators may use the commingling of activities as a basis to treat the corporation as the legally responsible actor.A DAO may also be associated with more than one legal ent

182、ity.A legal wrapper may apply to a subset of the DAOs activities.For example,one entity may be responsible for issuing tokens,another for managing the DAOs treasury,another for legal engagements with centralized service providers and another for engaging in stewardship of the DAO or protocol.Several

183、 legal wrappers are available to DAOs.Each legal entity structure provides a different set of trade-offs.The right approach for a DAO depends on its particular mission,community,size,stage of development and other factors.The law is also evolving as jurisdictions adopt new DAO-oriented structures,wh

184、ile courts and regulators evaluate DAOs under traditional ones.The most prominent traditional legal forms are corporations,LLCs and partnerships.For each,specifics of formation,governance,taxation and other attributes vary from country to country and within countries such as the US whose corporate-l

185、aw regimes are primarily subnational.A corporation is a for-profit or non-profit legal structure in which ownership(shareholders)is separated from operation(managers).The corporation is treated as a legal person for various activities such as contracting and litigation.And to guard against potential

186、 misalignment between shareholders and managers,a variety of corporate-governance obligations apply.The registration,governance and tax requirements of traditional corporations are a poor fit for DAOs because they presume centralized management and equity shareholders.LLCs(limited liability companie

187、s)were first established in Wyoming in 1977 to offer many of the legal benefits of corporations with significantly more formal requirements.An LLC need not have a board but can be structured however the parties see fit.This flexibility has led LLCs to be adopted as a favoured structure for many nove

188、l organizations,including DAOs with a significant US nexus.30 However,the beneficial-ownership disclosure requirements of the CTA pose a challenge for some DAO LLCs.A partnership is a structure in which participants jointly engage in business activities,sharing in the profits and losses.The unlimite

189、d liability and inflexibility of partnerships are generally inconsistent with the operations and objectives of DAOs.Other recognized legal forms include foundations,which may be private entities or public charities established for some public interest purpose;associations,a broader classification fo

190、r groups seeking to achieve a common objective;trusts,which must act for the benefit of their principals;and cooperatives,which are owned by active participants or customers.Each has attributes that dovetail well with DAOs.In many US states,an unincorporated non-profit association(UNA)may be formed

191、without formal registration,offering many of the benefits of other legal wrappers.31 In particular,the UNA can provide limited liability and beneficial tax treatment for participants,if properly constituted.The“non-profit”restriction does not prevent members from receiving financial benefits,so long

192、 as the organizations activities are structured to preserve an overall non-profit purpose.A number of DAOs are constituted as ownerless foundations under the laws of Switzerland,the Cayman Islands(“foundation company”)and the Netherlands(“Stichting”).The Swiss foundation structure has been prominent

193、 in the digital-asset world since it was adopted by the Ethereum Foundation.These structures,unlike US-based foundations,do not require the identification of shareholders,managers or beneficial owners and have relatively limited requirements that can be adapted to DAOs.The Swiss foundation structure

194、 potentially offers more flexibility in governance.The law firm MME,which represents many digital-asset Traditional legal wrappers4.2Decentralized Autonomous Organization Toolkit18projects,has developed a model framework for decentralized autonomous associations(DAAs)based on this legal category.32A

195、 final relevant form is the trust,which acts on behalf of beneficiaries.Purpose trusts in Guernsey allow for designated trustees to act in the interests of a trust under a written agreement,but the trustees liability is limited to the assets under their control,and token holders are shielded from fu

196、rther legal obligations.33 The trust is used to wrap specific committees or sub-DAOs engaged in functions such as the allocation of funds,rather than the entire entity.The arrangement may provide clarity in tax treatment and allow the DAO to engage in activities such as opening a bank account or sig

197、ning agreements as for a corporation.However,many European countries do not recognize trust companies,creating an unclear and risky tax dynamic.Tribute Labs developed an approach using ordinary Delaware LLC entities as a legal wrapper.The LAO serves as a member-governed,member-owned venture-capital

198、fund wherein members pool capital,invest in Ethereum projects and share in the returns of their investments.In addition to its smart contracts,the LAO is governed by an operating agreement,as is required of all registered LLCs.The LAOs creators believe that the Delaware LLC wrapper has provided the

199、LAO and its members with many significant operational benefits,including:1)insulation of member personal liability for non-contributed assets;2)the capacity for the LAO to contractually acquire property,both physical and intellectual;and 3)clarity over core issues such as dispute resolution and smar

200、t-contract supremacy over other governing agreements(an operating agreement,for example).With respect to taxation,the LLC structure equips the LAOs membership with the flexibility to choose default pass-through taxation or corporate taxation at the entity level.Yet questions remain for example,wheth

201、er the US Securities and Exchange Commission(SEC)would consider general-membership interests in a member-managed DAO LLC,such as the LAO,as securities.In order to mitigate risks,given this regulatory uncertainty,the LAO limits its membership to 99 investors,all of whom must be accredited investors.O

202、ther Delaware LLC DAOs supported by Tribute Labs include NFT collective Flamingo DAO,DeFi liquidity provider Neptune DAO and play-to-earn gaming platform Ready Player DAO.Tribute Labs DAOBOX 8The alternative to adapting existing legal forms is to use new legal frameworks designed specifically for DA

203、Os.Some of these have already been adopted.Malta The first nation to formally recognize the distinct legal personhood(i.e.the basic ability of a legal organization to take legally binding actions or have legally binding relationships)of DAOs was Malta,through legislation introduced in 2018.However,f

204、ormation of DAOs under Maltese law has been limited due to concerns about excessive complexity and centralized requirements.DAO LLCs Wyoming,Tennessee and Vermont have established specialized LLC forms designed for decentralized organizations such as DAOs.34 Although there are differences among the

205、three regimes,each state:1)requires a DAO LLC to establish and maintain a registered agent within the state;2)contemplates and permits blockchain-based automated DAO governance;and,most importantly,3)confers limited liability on DAO members for the debts and obligations of the DAO entity.35 The Repu

206、blic of the Marshall Islands has also adopted legislation allowing DAOs to register as non-profit LLCs.Colorado LCAs In Colorado,DAOs can formally register as limited cooperative associations(LCAs).Colorados LCA modernizes the cooperative model by blending its core tenets with elements of the LLC an

207、d corporate form.36 The LCA provides significant flexibility in profit distribution and voting mechanisms.However,because the LCA is a form of corporation,it relies on a board of directors and requires a registered agent in the state,which may not be appropriate for certain DAOs.The Colorado law als

208、o lacks explicit guidance regarding governance by smart contract.COALA model law The Coalition of Automated Legal Applications,a global blockchain think tank,has developed a proposed regulatory framework for legally recognizing DAOs.37 The model law grants DAOs significant flexibility to structure a

209、nd govern themselves as desired,and addresses specific blockchain-based phenomena contentious forks,DAO restructurings and failure events that have governance implications for DAOs.Table 1 identifies the significant attributes of each of the identified legal structures.38Bespoke legislative framewor

210、ks4.3Decentralized Autonomous Organization Toolkit19Legal structuresPropertiesEntityless May not be entitled to legal benefits(limited liability,corporate personhood)Avoids need for registration but may be subject to default treatmentCorporations Governance requirements,equity shareholders and centr

211、alized management unsuitable for DAOsPartnerships Unlimited liability and inflexibility unsuitable for DAOsDAO-friendly traditional legal structures Each structure has advantages and limitations for different kinds of DAO May provide for legal benefits and clarity on tax treatment Anonymity may be d

212、ifficult or impossible with forms requiring registrationBespoke legal structures Designed with DAOs in mind to allow for decentralization Each structure still has advantages and limitations for different kinds of DAO Adoption has been relatively limited so farLegal structuresTABLE 1The legal structu

213、re of a DAO has important regulatory impacts beyond corporate-law considerations.Securities law.Tokens issued for investment purposes may be classified as securities or equivalent financial instruments,which would subject them to significant regulatory obligations and limitations in many jurisdictio

214、ns.Classification under securities law has been a major point of debate and regulatory enforcement for token issuers and exchanges since at least 2017.The question is also highly relevant for DAOs.In a report issued after The DAO shut down,the SEC concluded that its tokens were securities that had b

215、een issued without meeting the applicable registration requirements or exemptions.Had the DAO remained in operation,those responsible for its token issuance or operation might have been subject to fines or other sanctions.In addition,under SEC rules,DAOs that issue securities could be considered“rep

216、orting companies”required to meet ongoing disclosure requirements detailing material changes in the financial condition or operations of the issuer.Some investment-oriented DAOs limit the number of participants in order to fit within registration exemptions under SEC rules.In the US,whether token is

217、suances are investment contracts subject to securities classification falls back to the Howey Test:whether an investment contract exists if there is an“investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others”.39 In the European Uni

218、on,the second Markets in Financial Instruments Directive(MiFID II)defines the scope of securities offerings,while the Markets in Crypto Assets(MiCA)directive,now in the process of adoption,establishes requirements for tokens that do not qualify as securities.Civil-law jurisdictions tend to define se

219、curities based on similarity to traditional instruments such as stocks and bonds.Tokens associated with DAOs are often not expressly issued as the investment instruments.Instead,they are defined as governance tokens,and the tokens grant holders the right to vote on attributes of the DAO.However,thos

220、e tokens may also be traded on secondary markets for investment purposes,raising the question of whether they should be classified as securities.Even if a token has utility functionality,the SEC has made it clear that it remains a security under US law if the Howey attributes are present.Some other

221、jurisdictions,such as Switzerland and Singapore,formally distinguish categories such as payment and utility tokens from security tokens.Implications of legal structures4.4Decentralized Autonomous Organization Toolkit20The circumstances of creation,structure and functioning of a DAO may influence whe

222、ther it raises concerns under securities laws.While this is an evolving area with limited case law,the more the functionality of the DAO as an operating organization predominates over speculative investment activity in the token,the more likely the DAO will be considered compliant.Similarly,the more

223、 that governance tokens are actually used for governance,the less likely it is that they will be considered securities.DAOs engaged in financial activity may be subject to other aspects of financial regulation beyond securities laws.For example,Ooki DAO was charged by the CFTC for violation of US co

224、mmodities laws,which restrict the provision of margined trading services for commodities.Taxation.Throughout its life cycle,a DAO will engage in several key activities that implicate tax issues.A DAO may begin its existence with a transfer of tokens from a more traditional corporate entity that deve

225、loped a core protocol before turning over future development and control to the DAO.A DAO and its members may at some point pursue a treasury-diversification programme selling native governance tokens for other digital assets or fiat currency in order to fund future development or simply to hedge ag

226、ainst volatility of the DAOs native token.40 Depending on the type of DAO,it may realize income or returns from its activities.For example,investment DAOs may see gains or losses on their portfolio,collector DAOs may see the value of their art or NFT holdings appreciate,and DAOs that participate in

227、staking may be deemed to collect income.Finally,DAOs and particularly protocol-development DAOs often establish grant programmes to fund teams supporting the general protocol infrastructure.Some even do so as their sole reason for existence.One of the major reasons to adopt a legal wrapper or bespok

228、e legal framework for a DAO is to avoid the tax implications of classification as a general partnership.There is currently no internationally agreed position on how to treat DAOs for tax purposes,nor is there clarity domestically in most jurisdictions.The lack of an international tax framework for D

229、AOs leaves room for the implementation of different DAO legislation by countries.This may create mismatches,and potential double(non-)taxation and tax risks and liabilities,which implies uncertainty for both the taxpayer and the tax authorities.Moreover,a DAOs legal wrapper may be incorporated in co

230、untry A,but from a tax perspective its commercial activities(and profits)may be allocated to country B(and perhaps country C as well).These profit allocation-related queries are not uncommon for any company operating in an international environment,but they seem to become more complicated when appli

231、ed to DAOs.Several initiatives across the globe,including the tax-reporting requirements in the US Infrastructure Bill that will come into effect on 1 January 2023 as well as the Crypto-Asset Reporting Framework(CARF)proposed by the OECD,will require exchanges and other virtual-asset service provide

232、rs(VASPs)to report crypto-transactions to the respective tax administrations.This raises the question of when a DAO might be considered a VASP.Holders of digital assets are generally already subject to income tax rules in the country in which the token holder resides.That said,underreporting of inco

233、me related to digital assets remains a key attention point from a tax-enforcement perspective.When a person participates in a DAO and receives(governance)tokens in return,the default starting position may be that these tokens are not taxed differently from any other digital assets for income tax pur

234、poses.This implies that any capital gains and losses may be taxable and that any income generated from these tokens(e.g.airdrops)may,in principle,also be subject to taxation.Things may become even more challenging if a person contributes to the DAO for example,by developing software to enhance the c

235、apabilities of the DAO and receives new tokens in return;such income might be taxable as income derived from business/entrepreneurial activities or as a form of in-kind salary.In addition to the taxation of governance tokens and their holders,the activities pertaining to the DAO treasury become rele

236、vant.Very often DAOs have a treasury of funds that can be allocated to various investments(in DeFi protocols,for example)that generate income.If these activities include participating in staking,lending or mining,or any other disposition of tokens,this may already result in the recognition of capita

237、l gains or losses for the respective token holders.Here it becomes relevant that all token holders are aware that these potentially taxable transactions have occurred in the first place,let alone that they are properly reported for income tax purposes.Considering that value may be embedded in the to

238、ken itself,this may create liquidity issues for the taxpayer.The administrability and enforcement of DAO tax laws is a challenging matter.Few tax administrations are willing to accept payment in digital assets today,let alone allow a protocol to collect tax receipts from digital-asset activity and f

239、orward those receipts to a tax administration.It may be difficult for both taxpayers and authorities to determine whether individuals and entities have properly self-reported taxable income.Employment and labour law.The idea of operating a business without any central governance has become especiall

240、y intriguing to bricks-and-mortar companies struggling to provide fair rights for workers.However,there is still no clear guidance on people who are paid to do work for DAOs,employee benefits,social security and(in the case of physical DAOs)whether there are worker-compensation issues as well.There

241、is also the question of whether DAOs can replace unions.Decentralized Autonomous Organization Toolkit21Insurance.Smart contract failures or exploits could result in real-world losses to users,and recipients of DAO treasury grants could act and do harm in the real world with the funds they receive.Wh

242、ile there are virtual-world solutions for the first example(such as safety modules and on-chain insurance),these solutions can be difficult to implement and may result in downward price pressure on a projects tokens if the insurance ever needs to be paid out.There are no on-chain insurance solutions

243、 yet for the actions of DAO actors in the real world.As a result,DAOs may need traditional insurance,including general-liability policies.In addition to covering potential losses,these policies could also help to protect the limited liability that DAOs may obtain through legal existence.Further,as e

244、ven the simplest DAOs will likely require a small number of people to administer their affairs(such as community management and social media),DAOs need to be able to provide employees with employment benefits,including health,dental and life insurance,at least in systems like that of the US,where em

245、ployers typically provide these benefits.Without such benefits,DAOs may be unable to attract talent,which could hinder their ability to act independently from the developer corporations that launched them.In addition,failure to provide benefits to employees leaves DAOs exposed to allegations that th

246、ey are ultimately worse for employees than traditional corporate structures,which could threaten their political viability.While there are insurance providers willing to underwrite general-liability policies for DAOs,there are few,if any,that are willing to provide employment benefits to DAOs that u

247、se non-traditional structures(structures other than a corporation or LLC).Even if insurance is available,a lack of legal existence for DAOs remains a significant impediment to the creation of legal relationships between DAOs and insurers.Banking.While web3 offers several alternatives to traditional

248、banking,many DAOs would benefit from setting up and maintaining a bank account.First,a bank account could be used to capitalize a DAO,thereby safeguarding the limited-liability protections that a DAO might obtain through the achievement of legal existence.Second,a bank account could facilitate the p

249、ayment of taxes,employee wages and insurance premiums.Third,even in cases where a DAO might make use of an employee-of-record service instead of hiring employees directly,such services often require their counterparties to maintain bank accounts.There are few,if any,established banks that are willin

250、g to commence banking relationships with DAOs that use non-traditional structures(structures other than a corporation or LLC).Even if a bank is willing to engage with a DAO,a lack of legal existence for DAOs remains a significant impediment to the commencement of such relationships.Anti-money launde

251、ring(AML)and countering the financing of terrorism(CFT).Regulators have historically relied on financial intermediaries,such as banks,to protect against illicit finance risks.DAO treasuries are most often stored in unhosted multisig wallets beyond the ambit of centralized financial intermediaries,wh

252、ich may interfere with regulatory schema because they are not controlled by an identifiable third party.Financial regulatory bodies such as the US FinCEN and international standard-setter Financial Action Task Force(FATF)have,in recent years,imposed AML/CFT requirements on virtual-asset service prov

253、iders,which,in some cases,may include obligations related to unhosted wallets.Developments in this area will have a significant impact on DAOs.A related issue is the enforcement of sanctions,such as the US Office of Foreign Assets Control(OFAC)regime.In August 2022,OFAC issued sanctions against Torn

254、ado Cash,a digital-asset mixer that had been used by sanctioned entities such as the government of North Korea to launder stolen funds.The mixer itself is not a DAO;it is a set of immutable smart contracts.However,there was a Tornado Cash DAO associated with the project,which went dark a few days af

255、ter the sanctions were announced.The implications of OFAC listing(which prohibits any interaction with sanctioned persons or entities)on decentralized systems is the subject of a great deal of discussion.Governance.The form of entity that an organization chooses,or which the law assigns it,raises ma

256、ny issues about the internal legal governance of the organization.Internal legal governance addresses questions such as:the basic ability of a legal organization to take legally binding actions or have legally binding relationships(often called“legal personhood”);who controls and has the power to ac

257、t legally for the organization(often treated in common-law countries as a question of legal“agency”);how the organization terminates its legal affairs,and so on.These questions are distinct from questions of external regulation statutes or administrative rules that prohibit certain types of marketin

258、g to individuals or require registration of securities offerings,for example.The law is only beginning to address how more complex features of organizational law apply to DAOs.For example,legal questions may arise(but have no clear answer under present law)concerning the disputed legal control of DA

259、Os and legal attributions of a DAOs actions.As with other types of organization,legal registration and the drafting of operating agreements enables parties to provide legal clarity in advance of potential disputes.For example,an operating agreement can clarify what is to happen in the event of unusu

260、al technical or financial circumstances,new regulations or disputed off-chain governance.Decentralized Autonomous Organization Toolkit22Recommendations5As DAOs engage with a variety of challenges,many are pioneering new operational,governance,legal and policy strategies.The operational,governance an

261、d legal needs of a DAO depend on factors including community size,composition and goals.This section provides a brief overview of recommendations for DAOs in operational,governance and legal areas.It also provides approaches to developing legal and regulatory frameworks for DAOs.The intention is not

262、 to provide any prescriptive solutions but to raise key considerations for developers,policy-makers and others engaging with DAOs.No section is exhaustive;instead,each is intended to offer general-purpose,modular tools for DAO developers and policy-makers.The right operational strategies,processes a

263、nd tools for a DAO will depend on its size,community and purpose.Here we provide a summary of different operational strategies that DAOs can employ.While not comprehensive,it offers a starting point for DAOs to develop effective operational strategies.Crucially,before developing a DAO,a group should

264、 consider whether it is the right structure to achieve its goals.If a group decides to create a DAO,then developing and publishing goals can help DAOs operate effectively.A clear mission and vision enable DAO contributors to align their individual work with the shared goal of the community.DAOs may

265、consider employing progressive decentralization,where a centralized group manages certain tasks and then transfers control to a community.If a DAO opts for this path,it should carefully assess the legal implications of how control is transferred.Publishing their mission and vision may allow DAOs to

266、enhance contributor engagement;outside feedback on their mission and vision can also enable DAOs to refine their purpose.For some DAOs,employing effective administrative practices can enhance operations.Defining a clear recruitment strategy can help optimize community development and engagement.Onbo

267、arding processes may help new members understand the DAOs goals and how they can contribute.Developing educational materials and facilitating connections between new and old contributors can improve onboarding.New-member onboarding may be facilitated by a dedicated working group tasked with training

268、 new participants and facilitating relevant connections.Empowering local“ambassadors”or community managers with specialized knowledge of a DAO community can help facilitate onboarding and other key operational processes.Likewise,DAOs can consider using non-transferrable tokens to mitigate the risk o

269、f Operational5.1Decentralized Autonomous Organization Toolkit23fraudulent identities and streamline onboarding processes.DAOs may also consider developing formalized roles for different contributors,making work opportunities clearer and enabling skills development for contributors to increase talent

270、 retention.Similarly,DAOs can proactively develop offboarding processes to mitigate scaling challenges.While all of these strategies can help a DAO manage its operational processes,a group should consider whether alternative forms of organization may be better suited to an endeavour requiring signif

271、icant administrative processes.Depending on its purpose,a DAO may benefit from brief sprints,or seasons,to direct contributors to a series of tangible,measurable objectives over a short period of time.Seasons can be focused on a single topic or theme that aligns with the DAOs goals.Communities can a

272、lso pre-establish times in which to reflect on the success of past seasons and plan future seasons.Likewise,goal-setting and accountability processes can be used to enhance contributor accountability.Division of labour may help DAOs operate effectively.Working groups tasked with specific mandates ca

273、n lessen operational burdens,especially for tasks requiring specialized expertise.For example,a technical working group can be tasked with testing the scalability and viability of DAO infrastructure.The creation of materials detailing the responsibility of each working group can help new members det

274、ermine which working groups they can join and how to do so.Communities may consider the development of review committees devoted to specific tasks with relevant expertise to facilitate work product review.Defining and developing appropriate membership and compensation practices can also help DAOs op

275、erate.DAOs can consider setting minimum and maximum membership fees.Some DAOs may benefit from a tiered approach to compensation,in which contributors are compensated according to the type of work they do.Different forms of compensation such as grants,bounties,revenue-sharing practices and salaries

276、can be employed to incentivize contributors.DAOs may consider a lock-up period for compensation to encourage contributors to participate over the long term.DAOs may also benefit from reimbursing delegates for expenses,which could open up participation to a broader range of contributors.Likewise,payi

277、ng delegates and active community members can enable DAOs to foster greater participation.Sharing information across the ecosystem can help DAOs benchmark compensation practices.“Good governance”is not easily defined for communities whose value lies in self-determination via self-governance.Each com

278、munity must try to define good governance for itself.The section below summarizes some areas in which DAOs are beginning to define effective governance practices.Ensuring inclusive discussion and respectful discourse can help increase engagement in governance practices.DAOs may consider appointing a

279、dministrators or moderators to remove proposals that appear to be fraudulent,spam-oriented,defamatory,hateful or otherwise inappropriate.Moderators can also help manage mutually contradictory proposals that are submitted simultaneously.Effective community governance depends on establishing and maint

280、aining strong voting practices.Communities may benefit from defining and releasing voting-rights practices that answer basic questions such as who needs to vote on what and how they can do so across voting periods.DAOs can also define processes that describe what constitutes a“yes”or“no”vote.A varie

281、ty of voting processes can be employed to optimize DAOs for different ends.For example,the use of one-member,one-vote practices can mitigate the risk of plutocracy in DAOs.Likewise,DAOs can add timelocks for governance decisions,creating a gap between decision and execution to enable the community t

282、o provide additional input and to adapt.These systems may benefit from verifying or qualifying contributors using NFTs or other authentication modalities.DAOs can also make use of a representative,or counsel-based-leadership approach to voting.They may also benefit from establishing“communities of p

283、ractice”with cross-DAO experience to provide guidance on processes such as voting practices.DAOs may also benefit from standardizing governance processes.For example,once proposals have been posted publicly,DAOs may mandate that there be a reasonable period to review and comment before a proposal mo

284、ves to a vote.41 Furthermore,DAOs can use a process to ensure that proposals are submitted and voted upon in a valid way.42 Voting requirements and processes can be standardized across chains,so that the process is not more or less onerous on one chain than another.Accessible,timely and widely distr

285、ibuted documentation and communication is critical for lowering the barrier to participation for new entrants.Governance is typically encoded in a DAOs governance framework and then enforced through social and technical mechanisms for accountability.43 In addition,some protocols have Governance5.2De

286、centralized Autonomous Organization Toolkit24acknowledged a need for easy-to-digest summaries of more complex proposals.Standardized templates for different types of proposal can help voters more easily interpret information and make better-informed decisions.Governance can also benefit from buildin

287、g and maintaining accountability through clearly documented processes.Voter guides for delegates and open-source frameworks for delegates are crucial to ensuring a culture of accountability within DAOs.Conflict-of-interest disclosure policies may also be used to provide accountability for community

288、members.Likewise,steward report cards(as used by Gitcoin)can build accountability into DAO leadership roles.DAOs can also develop checks and balances to prevent governance attacks,such as the enactment of a malicious proposal that passes the approval process.ProtocolDAO(Synthetix)serves such a purpo

289、se.If a ruinous governance decision succeeds and can no longer be opposed inside the protocol,DAOs may include a provision that users have the option to fork.DAOs can develop subgroups to perform functions such as reviewing tokenomics to determine whether incentives are aligned with the goals of a D

290、AO.44Decentralized Autonomous Organization Toolkit25The right legal strategy for a DAO depends on factors including its stage of development,community and purpose.Beyond developing an effective legal strategy for a given DAO,there is also the larger question of how to build fit-for-purpose policy an

291、d legal frameworks that close the existing gaps affecting DAOs generally.This section offers a starting point for DAOs to develop legal strategies and for developers,policy-makers and others to engage in the process of crafting appropriate legal and policy frameworks.In developing an effective legal

292、 strategy,DAOs can benefit from following a clear,structured process informed by consultation with experienced counsel.Although dependent on jurisdiction,DAOs generally should consider their structure and the activities in which they engage.Based on their analysis,they should then examine the advant

293、ages and disadvantages of establishing a formal legal structure.While legal structures may provide operational advantages and enable DAOs to benefit from useful legal rights,including limited liability,they also come with costs.If a DAO decides to employ a legal wrapper,it should consider the variet

294、y of wrappers available,both traditional and bespoke,evaluating them according to the DAOs purpose,community,composition and other factors.The right legal structure for any DAO will depend on several considerations.Many resources exists to help DAOs navigate this process.45 While this section identi

295、fies the main approaches that DAOs are currently taking,note that uncertainties remain about regulatory and tax treatment in many jurisdictions.In deciding whether to use a legal wrapper,a DAO should carefully review the laws and regulations of its specific jurisdiction with the guidance of counsel.

296、Furthermore,a DAO should consider the implications of a given legal structure beyond corporate law,such as securities law and AML compliance.In addition to crafting a functional legal strategy for a DAO,there is also the question of how to develop policy and legal frameworks for DAOs.The lack of ali

297、gnment internationally among policy-makers and regulators on how to treat DAOs for tax purposes,for example,creates uncertainties both for taxpayers and tax authorities.Creating adequate policy and legal frameworks for DAOs is crucial to realizing the benefits and mitigating the risks of this novel

298、organizational form.The creation of such regimes is complicated by the existence of several proposals,such as the Crypto-Asset Reporting Framework proposed by the Organisation for Economic Co-operation and Development and the US Infrastructure Bill,which could create competing requirements for DAOs.

299、In developing a clear,harmonized approach to DAO law and policy,collaboration across the public and private sectors is essential.To initiate this process,policy-makers,developers and others can engage in an open,collaborative dialogue as part of a structured process.The first step is to identify the

300、 major goals of policy and regulation for DAOs.While consumer protection may be the overarching policy goal in one jurisdiction,another may favour fostering innovation,while others still may seek to realize both.As elaborated in Section 4 legal and policy considerations for DAOs span multiple regula

301、tory areas including securities law,taxation and employment and labour law.Thus,a coherent overall strategy is crucial to developing effective policy regimes.Once policy-makers have identified their goals,they may find utility in a variety of transitional mechanisms such as the development of specia

302、lized regulatory units,purpose-specific disclosure requirements and regulatory sandboxes.These methods have been elaborated in a previous publication from this collaboration,the Decentralized Finance Policy-Maker Toolkit.Generally,policy approaches to DAOs may benefit from considering the dynamic na

303、ture of DAO development and decentralization;DAOs that begin as largely centralized efforts among a group of core developers may opt to decentralize progressively.Likewise,policy-makers may find value in a technology-neutral approach capable of balancing policy goals with promoting innovation.They s

304、hould exercise care to adopt practices such as identifying legally responsible parties in ways that recognize the functional realities of DAOs.As discussed throughout this report,actors in a DAO may have different levels of engagement,power and awareness with regard to the DAOs activities,based on i

305、ts operational arrangements and governance mechanisms.How to craft policy and legal frameworks for DAOs that are just,effective and enforceable will be a question for different jurisdictions to consider according to their needs.To facilitate this process the report provided a summary of the major le

306、gal and regulatory questions facing DAOs as well as a set of tools in the appendices to help evaluate DAOs.Legal and policy5.3Decentralized Autonomous Organization Toolkit26ConclusionDAOs are engaged in nothing less than an experiment to reimagine how we all connect,collaborate and create.Combining

307、recent technological innovations with community efforts,DAOs have the potential to address many of the shortcomings of the traditional firm while also realizing more equitable governance and operations.Their code-driven,community-oriented nature may enable them to effect new models of allocation and

308、 coordination,revolutionizing use cases as diverse as financial services and philanthropy.Yet they also confront significant operational,technical and governance hurdles.Perhaps most acutely,DAOs today are confronted by a fragmented and uncertain landscape of law and regulation.Rather than provide a

309、 complete analysis of the DAO ecosystem,this report has offered a set of resources to help developers,policy-makers and others effectively evaluate and engage with DAOs.It has explained what DAOs are and how they are operationally distinct from traditional organizations and discussed the opportuniti

310、es and challenges they create.It has offered an analysis of DAO governance processes,challenges and mitigation strategies,while providing an overview of the major legal and regulatory questions with which DAOs must engage.The report has concluded with recommendations for DAO operations,governance an

311、d policy.In the following appendices,it offers a set of tools to help evaluate and govern DAOs.Like the rest of web3,DAOs are a novel and emergent phenomenon.In less than a decade,they have gone from theory to practice,mushrooming across sectors.While proponents project the continued and rapid expan

312、sion of DAOs,critics view them as ephemeral.Only time will reveal the results of the DAO experiment,demonstrating if,when and how DAOs will ultimately have their greatest impact.Decentralized Autonomous Organization Toolkit27Appendix 1:DAO typology assessmentThe following questions are designed to h

313、elp evaluate the types of DAO.Critically,these dimensions may not be static and should be evaluated on an ongoing basis.What is the DAOs objective?Refer to its founding documents to determine the stated objective of the entity.Is this primary objective generative?Does it seek to create something or

314、perform an ongoing function?Generative DAOs perform functions such as supporting networks or applications,facilitating participant investment activity and compensating people for performing work.Is the primary objective associative?Does it seek to enhance the functioning of a community or society?As

315、sociative DAOs facilitate on-chain management of a community,fund public goods,networking and coordination.Is the primary objective ad hoc?Does it seek to achieve a specific goal and then disband?Ad hoc DAOs can pursue specific communal objectives,buy a unique item or entity or facilitate group coor

316、dination at a specific time and/or place.Once the DAOs objective has been determined,it is then important to establish its means:how does it plan to achieve that objective?Is the DAOs primary means managing an activity?Activity DAOs operate by powering a network or application,managing communities o

317、r pursuing a specific communal objective.Is the DAOs primary means deploying capital?Value-transfer DAOs use investment,philanthropic activities and acquisition strategies to achieve their objective.Is the DAOs primary means organizing people?Social DAOs compensate contributors and facilitate networ

318、king and coordination.Once both the DAOs objective and means have been determined,it can be located on the grid below blue text is used to show the type of DAO.OBJECTIVEGenerativeAssociativeAd hocMeansActivityFunctional(Power a network or application)Bitcoin,Ethereum,Tezos,AvalancheGovernance(On-cha

319、in management of a community)Uniswap,Yearn,ENS,Steem.DAO,Illuvium,SandboxTask(Pursue a specific communal objective)UkraineDAOValue transferInvestment(Facilitate participant investment activity)MetaCartel,Olympus Pro,PleasrDAO,Flamingo DAO,Whale,CityDAOPhilanthropic(Fund public goods)GitcoinDAO,Moloc

320、hDAO,EduDAO,KlimaDAO,LeXpunKSpecial Purpose Acquisition DAO(SPAD)(Buy a unique item or other companies/DAOs)ConstitutionDAO,SpiceDAOSocialProduction(Compensate people for work they do)dOrg,HumanDAO,Yield Guild Games,Mirror,MODA,Audius,Nouns,SquiggleCommunity(Networking and coordination)Friends with

321、Benefits,Bored Ape Yacht Club,LexDAO,BanklessFlashmob(People come together at a place and/or time)Decentralized Autonomous Organization Toolkit28Appendix 2:DAO governance assessmentThe following questions are designed to help evaluate the governance model of a DAO.Critically,these dimensions may not

322、 be static and should be evaluated regularly.Is there a resource articulating a governance model?If not,has the project communicated its ambition to develop one?Assess the voting process:On which platform does voting take place?Who can vote?All users,all token holders,only governance token holders o

323、r NFT token holders?Who can propose a change in governance,and is there a threshold?How are changes proposed?Can proposals be submitted at any time?Do members have to actively monitor proposals?Are proposals automatically accepted if they are not rejected?Can voting be delegated?Can voters elect rep

324、resentatives?Do token holders have the opportunity to stake their tokens in support of a proposal?Can governance tokens be traded?Depending on the answers,the DAO may be employing any/several of a wide range of the voting processes elaborated in Section 3.2.For example,the DAO may be using token-bas

325、ed quorum voting with or without conviction-based voting or continuous approval voting.In addition,it should be able to identify whether the voting process is one of delegation or representation,employing optimistic governance or not.With what has been established above,the following questions provi

326、de a solid foundation for understanding the DAOs degree of decentralization:What type of blockchain is the DAO running on?How many nodes are operating on the network?How many members does the DAO have?How many members are contributors and to what degree are the DAO contributors separated geographica

327、lly?How is it decided which aspects of the system can be altered by governance token holders?Who holds the administrator keys?How are changes implemented?Is there an individual or group in charge of implementing changes?Or are changes implemented automatically by smart contract execution?How equitab

328、le is the distribution of resources in the DAO?Does an individual or minority control the majority of resources?Depending on the answers to the above questions,a DAO may be completely centralized,partly decentralized or fully decentralized.Determine how autonomous the DAO is.The following questions

329、provide a solid foundation for understanding how automatic the design is:Are changes implemented automatically by smart contracts?If so,who can alter the smart contracts?If not,who implements changes to the system?Are they implemented by an individual or a small group,or can anyone implement changes

330、?Depending on the answers to the above questions,a DAO may be algorithmic(entirely dependent on software to implement changes),participatory(use community votes to make changes)or some combination of the two.Decentralized Autonomous Organization Toolkit29Appendix 3:DAO governance strategiesThe follo

331、wing table summarizes common approaches DAOs employ to mitigate governance challenges.ChallengesApproachExamplesLow-quality proposalsConviction votingHolographic consensusContinuous approval voting1HiveDAOstackMakerDAOVoter fatigueOptimistic governanceTribeDAOVoter apathyDelegationIndex Coops Metago

332、vernance CouncilWildfire DAOMisaligned incentivesVeNomicsCurveLow-context decision-makingRepresentation via councilsIndex Coops Metagovernance Council(MGC)Synthetix Spartan CouncilElement Governance Steering CouncilPlutocracyNFT-based voting systemsQuadratic votingOptimismElement FinanceMarinade Fin

333、anceGitcoin(quadratic voting)Rate of innovationGovernance minimizationUniswap allows for fixed-parameter changes onlyReflexer has outlined a path to immutabilityLiquidity designed to be fully immutableDecentralized Autonomous Organization Toolkit30Appendix 4:Common open-source DAO frameworksThe following table summarizes common DAO frameworks,including their core features and year of launch.Framew