DAOs as we know them are not so autonomous nor automated as we’d hope. They’re more so analog implementations of the vision of fluid on-chain governance processes. The kinds of DAOs we’re striving for are a lot more dynamic and intelligent.

DAOs in the wild opt for one of two approaches to giving users membership and voting power:

• token-based governance approach, where users hold/delegate/stake/earn tokens to be members of the DAO
• social-based governance approach, where members are sponsored, contribute to the DAO or sign covenants to become members

These mechanisms vary in how permissionless they are for new members, voting rights and thresholds for participations - for example holding a DeveloperDAO token to be a member or holding 10M UNI to be able to make proposals to the DAO.

This may not be fully exhaustive but it captures most ways a user’s DAO membership can be dictated today. Yet despite how one might acquire the governance rights in a token-based vs. social-based DAO, they all have one thing in common - they’re static.

How dynamic can we get?

Some DAOs use tools like CollabLand to create token faucets in their discord, to reward top contributors or Coordinape for DAO members to review other member’s contributions in the community. These are great ways to get more voting power into the hands of contributors, but it’s not a good way to moderate it or take it away. Our vision of protocols as the future of work is also contingent on acknowledging and valuing user contributions in some autonomous fashion.

DAO membership should be fluid, we need to begin designing DAOs that capture the dynamicism of participating in web3, and acknowledge the low switching costs of working between protocols.

Questions to wonder about:

How can we decrease voting power or kick somebody out of a DAO?

How can DAO members maintain a threshold of behavior in the protocol not just voting power?

How can we change the DAO’s membership over time?

How do we ensure DAO participants - who have significant influence over protocol governance, culture and longevity - are still best suited to make decisions in the interests of the DAO?

Being a member of a DAO should be a privilege not a right.

Anyone can purchase a protocol’s token, attend a town hall or join a discord channel. But not everyone should be able to have perpetual, unadulterated rights to a protocol’s governance or maintainence of a treasury (extremely important jobs!) simply because they hold that token or used that cat pfp.

One of the only - if not the only - DAO mechanism that removes a member on-chain is guildkick in MolochDAOv2 that lets members vote to remove another member, usually if they’re behaving maliciously, and as a preemptive defense so the DAO doesn’t need to potentially ragequit funds. However, this is incredibly hostile behavior and doesn’t meet our need for fluidity in DAOs - guildkick would be a static proposal, submitted when the time is right, not an autonomous solution.

Reputation-based DAOs

Holding a token can signify interest and skin in-the-game but simply holding that token doesn’t prove enough commitment to the protocol or DAO’s well being. A user’s interactions with a protocol and community is what should matter for DAO membership and voting rights - reputation.

DAOs can start attributing commitment in their protocols based on Network Participation, Governance Participation and Community Participation. Instead of relying exclusively on token ownership, DAOs should require their engaged members to partake in the protocol and DAO and develop reputation.

If the whale investor won’t stake their tokens, should they be a governance whale? If they don’t have a protocol POAP, can they even sit with us?

DAO membership should be fluid.

With token-based voting, users have low switching costs - they can buy/sell any token and participate in any DAO with the snap of their uniswaps - but DAOs aren’t currently afforded the same fluidity.

A DAO needs changeable membership - where a user’s membership is contingent on their continuously meeting reputation metrics, instead of a static one-time event or purchase. If they stop meeting those minimum on-chain requirements, they should no longer be a part of the DAO. Imagine how curated our DAOs could be if they automatically updated their members lists to always include the highest-quality, most engaged members. Just like you have to be a citizens in a country to vote.

Let’s play this out:

Alice joined BobbyDAO that oversees Bobert Protocol. Currently Alice is a $BOB whale, she gets to submit proposals because she meets the $BOB threshold and she can swing votes pretty easily, but Alice has yet to stake BOB in the protocol, nor attend a community call! Alice is ngmi.

Lately Bob has been considering strengthening his DAO. He thinks reputation-based mechanisms could help, so that more $BOB stakers can have a say in the protocol instead of $BOB holders who may not actually care about the protocol’s best interests. He decides all users who staked their $BOB for at least 30 days in the last year can continue to be DAO members. If at any point in time a user falls out of that 30/365 ratio, they will no longer be a DAO member. If the same user restakes, they can be welcomed back into the DAO and thus Bob hopes to retain top protocol contributors in his DAO.

The future of DAOs are ever-changing bodies that can be programmatically maintained. Members are the lifeblood, that can either focus the DAO on its mission or take advantage of the DAO. A DAO’s members who don’t organically develop a reputation in a protocol may be misplaced, that could lead to plutocratic or autocratic outcomes in a community.

Users will buy many tokens, join many discords, try many DAOs and ditch many DAOs, few will stick around and use their tokens in the protocol, and even fewer will become long-term contributors. The metric of success of a DAO isn’t how many members it has, it’s the quality of proposals and it’s ability to retain contributors in the protocol (or whatever else the DAO is managing). A helpful member today may not be a helpful member tomorrow, and we can build DAOs with members that walk the walk. That’s why it’s important to keep our DAOs dynamic and allow membership to evolve.

Luckily, most interesting reputation metrics are on-chain or accessible via oracles, and can be fetched for DAOs to use in their governance systems.

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