One other thought-- the challenge of equitable DAO governance and preventing plutocracy is one that the broader DAO movement is also reckoning with. In my opinion it is one of the single most important challenges facing the broader crypto ecosystem. As @giaki3003 points out above, using AGLD widens participation (since it’s divisible and more liquid) but is ultimately just another capital structure gating governance participation. The most equitable approach would be for every synthetic Loot holder to be given voting rights, but then it becomes difficult to prevent fraud from spinning up dummy wallets to influence proposal outcomes. Ultimately this is a challenge that goes well beyond just LootDAO… I always come back to the need for on-chain identity to assign equitable voting power to all individuals without relying on wallet addresses.
Exactly my thoughts. All DAOs (much larger, older and more influential ones than the one we’d want to build) have struggled and are struggling with this fundamental issue. I don’t see why we should also choose to struggle with them when Loot was made exactly to avoid this and actually be free.
Reposting some various options here:
Overview:
As the Loot community builds and grows in cultural importance, various challenges will arise. Some of these have already been illustrated in the past week. $AGLD, a token given as an airdrop to all Loot holders, is up 1400% on the week. To this point there has been no proposal on the future utility of the token or if it should be a part of the community roadmap. While this may appeal to some (future projects should only adopt the token if they want to), it illustrates a real challenge for the community as those outside the project are now trading $AGLD and have viewed it as the de facto currency of the Loot Project. Without some level of community feedback, the risk becomes that speculators determine which things get built and with what.
At the same time, the singular virtue of Loot is permissionless building. This must always be cultivated. The goal of this essay is illustrate various potential approaches.
The Evo(Loot)ionary Approach
One path that can be forged is to follow no path. In this instance, builders continue to decide what gets built and the only formal community input is whether the community adopts the project. The community evolves as it adopts projects informally and best projects survive. This would maximize the freedom to build anything as it would be truly permissionless. It also allows for product-market fit to not be overfitted to some communal ideal of what Loot should become. The community finds itself as it builds.
Guilds
Guilds serve as an intermediary step between the evolutionary approach and a more formal DAO structure. Guilds establish themselves as sub-communities within the project and can organize themselves as they best see fit. They can vote on guild matters, build for their sub-community, adopt a currency (or not) and continue to make decisions at the local level that best align with their interests. Regardless of any decision about an overarching DAO, these will continue to thrive. Some potential problems: will the Divine Robe Guild de facto serve as the driver of community decisions simply by virtue of economic power? One fear that the freedom maximalists have is that a DAO turns into a plutocracy. Is there already a risk of one being formed?
DAO Governance
Any discussion of a DAO should be separated from discussion of AGLD initially. AGLD does not need to be adopted as the governance token and thus should not be assumed as the de facto token if a DAO was formed. Further, I will propose a DAO minimalist framework in addition to a DAO maximalist framework.
DAO Minimalism
One approach that the community could take is to form a DAO that has tight guidance around the decisions it makes. The exact things a DAO should decide should be left for debate by others but suffice to say determining rewards for builders, economic alignment of the community, and other such decisions may be best decided by a formal governance structure. Importantly, this structure need not be linked to a token that has already been issued or even a token at all. One option may be to proportion votes to guilds. Another may be to allocate votes to builders, writers, and artists in accordance with community adoption of projects. One potential problem is that in deciding very little, the DAO decides nothing and is too ill-defined to make decisions around tokenomics, rewards, or grants.
DAO Maximalism
The last approach would be for a DAO to be established with the power to determine the overall direction of the community. It would have final say on sanctioned loot projects, tokenomics, etc. The DAO would be equipped to make decision that come with the full sanction of the community. As with all DAOs, there is a risk of a decentralized organization having concentrated power amongst several holders and centralizing decision making.
Some Closing Thoughts:
While I have attempted to layout various options, I am sure this is not exhaustive. Further, I do not mean to suggest that the community must decide soon what lies ahead. Loot is an infant project. Its spontaneity is its greatest asset. However, it would be helpful to gauge community sentiment through a survey of sorts on various topics. First and foremost, we must deal with AGLD and determine how the community views it going forward. I propose that we set up a way by which we can collect data on how the community currently views itself and matters of collective interest.
Whatever path we go, I look forward to forging it with the adventurers. Onwards.
To DAO or not to DAO: This is the Wrong Question
Current debate around governance is straying away from what I think is exciting about the Loot experiment in the first place.
Hear me out. (only a 1 minute read)
What is Loot?:
A basic building block which developers can build upon, artists can create about, and community can be formed around, in a permissionless and trustless way. The value of Loot comes from what people create on top of it.
What would a DAO actually control?
Nothing. Nothing, that is, unless the devs, creators, and communities choose to give power to the DAO.
Would the creation of a DAO immediately give loot holders the ability to determine the issuance schedule of $AGLD?
No.
Not unless the 3 of the 11 controllers (edit: perhaps “stewards” is a better word here, controllers makes it sound like I believe like they’re malicious, which isn’t the case!) of the $AGLD contract choose to use the “transferOwnership()” function, to transfer ownership of the $AGLD contract.
Would the formation of a DAO give that DAO any authority over, or ability to enforce what gets created, what’s canon, and the direction the project goes?
No.
Not unless the DAO convinces enough people in the ethereum ecosystem (whether they’re loot holders, or not) that the DAO’s votes and decisions have merit, or “legitimacy”.
We don’t need to vote, or check for consensus, before creating (or not creating) a DAO.
If you want to be involved in governance, you can create a DAO. You don’t have to ask.
If you want that DAO’s governance to be able to control $AGLD, you’d need to convince at least 3 of 11 of $AGLD’s current controllers that the DAO you’ve made is the right place to transfer ownership status of the $AGLD contract. Maybe you don’t like $AGLD, and want something different. You’re free to create that too!
If you want to direct which way the project goes, your DAO should focus on convincing devs, artists, and the broader community to follow the standards your DAO has laid out.
There could be multiple DAOs, competing and coexisting. I hope this doesn’t sound cynical, because I’m personally excited about this, and find it super interesting!
This is an important point that I think needs to be addressed in the correct way to prevent spam from negatively affecting the Adventurer experience while not being too gatekeepey. I made a post about token lists for derivatives here which I think will be part of the solution. The DAO could maintain a derivative list that token holders can vote on.
Would the creation of a DAO immediately give loot holders the ability to determine the issuance schedule of $AGLD?
No.
Not unless the 3 of the 11 controllers of the $AGLD contract choose to use the “transferOwnership()” function, to transfer ownership of the $AGLD contract.
Good point, transfer of the $AGLD contract to the DAO would need to be a requirement of making AGLD a governance token.
Great points. It seems to me that most of the problem stems from a project that is de facto the currency of Loot trading on exchanges with no monetary policy or roadmap on accruing value to builders. In that sense you’re right that the DAO doesn’t change that (I like a marketplace of DAOs!). In some sense, we’ve already got that through guilds the meta-point is trying to gauge if this is good enough or if there is a desire for more. Additionally, Will has already made known they want community feedback on what’s next and I think AGLD is a perfect opportunity for us to come to some understanding of what the community values going forward.
I agree that the best use for a DAO is to fund new projects to be developed for loot holders. If we want to maintain the strength of loot, then we want people building high quality projects that favor loot holders and those derivatives that are loved by the community of loot holders.
What we don’t want is someone with a lot of accounts controlling the vote and sending our treasury funding to themselves or their friends.
Maybe voting should be tied to an loot holder’s contribution in AGLD to the DAO treasury, and then the treasury gold could be paid to developers to build the games we’ve voted on from among what is proposed. What if after you contributed 100 AGLD to the pot, you had 100 yes votes you could spend on one or more proposals? And when a proposal passed, it was funded with an amount of AGLD equal to the total number of yes votes it got? So you would slowly exhaust your votes as we spent the money. And if it were a blind vote, throwing all your AGLD into one single vote couldn’t guarantee you to win that vote, or to win a vote that receives a big payout, because you won’t yet know who else voted or how many votes they cast.
It would force people to put some skin in the game when they vote. That’s just a rough idea to put out there in case anyone wants to shine it up and build on it. I haven’t thought through all the possible game-theoretical outcomes of that kind of voting system.
The AGLD airdrop is analogous to a vampire attack
If loot wants a DAO, though it seems to me that we don’t need one yet, then one Loot = one vote would be more aligned with Loot holders.
The interests of the $AGLD DAO will diverge from the interests of Loot holders as the two token distributions diverge post-airdrop.
$AGLD governance only has as much power as we give it legitimacy. I don’t see why to give it any.
Humans need a leader. There is a reason every country, every company, every organization has a leader at the helm. Without a leader, the organization will go nowhere as it is without direction. The DAO must be that leader for Loot.
I understand and appreciate the ethos of Loot, but having an official direction (and many other unofficial branches) makes the most sense.
We should create a DAO that, at the very least, whitelists Loot derivatives so we build a framework and foundation with an ultimate goal. That doesn’t mean we should discourage projects from branching out, but we can at least create a foundation for the branches as well.
An example of a foundation of building blocks:
Loot
Characters
Ability Scores
Realms
etc.
That is where the branches come in. People decide, okay, how can I use these to continue building? Instead of having 50 different “summons”/“companions”, or “maps” vs “realms”, or 10 different potions, we whitelist a specific project that has a competent dev and isn’t just trying to piggyback off the Loot brand for a quick buck.
From there we can have different renderings/PFPs of Loot characters, different games, different implementations and we can let them each grow. When one clearly outshines the rest of the pack, we can whitelist that as well and continue on.
This is really the only option if we want Loot to be successful. Having a DAO doesn’t make anything less decentralized. We can have some sort of logarithmic voting system so plebs have as much say as whales, etc. And we can also integrate AGLD into the DAO (see my thread on New DAO Structure).
To add to this, after setting an initial foundation, we could adopt a “Proof-of-Work” framework — aka — the chain of blocks with the most derivatives built on top of them, is the one we whitelist.
Loot is pretty much the Bitcoin of the NFT Gaming Metaverse, in that it is the first truly decentralized metaverse ever created on ERC-721. As such, we should allow developers to create without limit, building block after block, project after project, that all ties in to our whitelisted foundational blocks. From there, we see which projects have developed the most (and gotten the most traction and useage), and whitelist those officially. Then we can build from there and repeat.
We can also whitelist “alternative” metaverses. One game could be a RuneScape style MMRPG, one of them could be a trading card game, one of them could be a Pokemon style game (where people fight with their creatures — just spitballing here). If each branch takes off and has its own community and support, we can whitelist them all.
I like to think of a DAO as a supporting structure NOT a controlling one.
The Loot Project began as a seed. It is now growing as we see the multiple branches form in guilds and derivatives etc. There are 3 logical options for this growing plant:
- Let it grow naturally without supports or intervention
- Prune it as it grows to prevent branches moving too far away from the central ideologies of the project
- Support and reinforce the branches as they grow.
I believe DAOs are the supports mentioned in the 3rd option. At least in these early stages while everything is growing so rapidly I agree that too much “control” would not be in the best interest of the project. At the same time not having some level of support for strong derivatives and branches and building projects may also not be in the best interest of the project.
I don’t think the question should be whether or not DAOs should be created; the question should be in what ways are DAOs able to support the project.
Spawned Loot (many of which would likely be sold for greater distribution) and a heavily inflated AGLD would both be great for the ecosystem and increase the distribution of the control of the DAO.
Imo, answering questions of whether we will spawn the loot and inflate the AGLD will make this discussion a lot easier.
P.S. side note: I like the idea of inflating AGLD with drops to ALL Loot holders, both OG and spawned, maybe at different ratios, to broaden ownership.
I don’t think we need to have “officials” Loot project. It’s much cooler to allow anyone to build upon Loot with whatever Loot project … Developpers could create their own more easily if needed into their game design or add undiscovered Loot.
What could be needed however is a place where Loot projects are indexed based on some important metrics like :
- Opensea volume to check the demand
- Transfers volume
- Number of holders
- Keywords ? / Types ?
- Etc … feel free to complete
I personally believe a way to organize is needed, but from what I’ve seen in the space, DAOs are pretty much a running joke, whatever the project. I think we need to figure out first :
- What is the spirit of the community ?
- Where do we want to go ? What is our common goal ?
- What will the DAO control ?
- What is the purpose of the DAO ? (incentivize people to build ? Incentivize people to play games with Loot ? Make money with the trading of Loots ? you get my point …)
We need to clarify what we want to do. I let you build upon that if anyone has a comment.
One possible way to avoid creating a central DAO which controls everything but still having some structure is to create several Gnosis Safes with a few multi-sig around a specific DAO.
That’d be the flow:
- someone builds something people like (e.g. the Dungeons)
- if money is needed, he/she’ll make a request for funding and creates a Gnosis Safe with, say, 6 out of 9 signers chosen by the builder in the community.
- anyone who needs/likes the things which is being built fund the Safe (with AGLD, ETH or anything) and maybe gets back the derivative NFTs or nothing.
I see some points in favor of creating a controlling or non-controlling DAO, recognizing or whitelisting official projects and generally trying to “organize” the Loot ecosystem. I would like to make a plea against this direction, even if there are heavy costs associated.
The Loot project is the first project I’ve seen with real and credible “metaverse” like potential precisely for the reason that it is open. The entire corporate conversation around metaverse topics proposes creating AOL like, pre-internet style company towns. The lack of a true, open, interoperable and decentralized platform (like http was at the start of the web) is what will doom any corporate metaverse ambitions. Loot has a chance to be something else, something more generous, open and wild and for those reasons to grow into something good.
Please don’t shackle it to some hierarchical rent seeking ethos by trying to assert control, even if the chaos is painful.
Ethereum itself is going to gatekeep a majority of new peoole from joining in. 0.01 now will cost more than 0.01 a month from now.
FYI, someone should check my math, but on my analysis it looks like Loot holders addresses currently hold only 55% of minted AGLD.
The divergence of these interests is not a hypothetical future event, but very real today.
(based on this analysis: Dune Analytics)
Loot ecosystem shall be like a Forest
Decentralization & growth from bottom up is the revolutionary of loot. This reminds me how a trees and forest grows.
Trees need sun, water and nutrients for survival and develop. Just like projects need Fund (sun), Founders/talents (Nutrients) and community (Water) to grow. We don’t need a DAO to manage a forest to select what kinds of trees should grow, when, how tall and etc. What we need is to attract as much sun, water, and nutrients as possible so, then let the forest does the things they are good at - growth.
Bear that in mind, any things that prevent the Loot ecosystem from funding, talents, community should be avoided.
Don’t have a detailed plan yet, but few things that I believe that we should not do:
-
Coin Voting Governance. There are many problems with this approach. Have a look a Vitalik’s article for further details Moving beyond coin voting governance
-
Limit community to the loot holders. There are around 2.4k unique loot owners (source: Dune Analytics ) This is very small number if we want to build a forest. If activities taken by community aims to benefit loot holders, we will end up a centralized garden.
What we should do:
-
Welcome & give incentives to mLoot holder to join the loot community.
-
Welcome & give incentives to creators/devs to build on derivative
Community → talents → funding
Sorry if my thoughts are not clear & well presented. Happy to discuss on HOW.
Those are good points. You might find my proposal interesting to expand on if you get a chance to read it – AGLD proposal to most benefit the LOOT ecosystem - #12 by MassAccept