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Tools for working with DAOs

Overview of other tools that might be used by the DAO community
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Decentralised Autonomous Organizations (DAOs) establish a novel and distinctive working environment that prioritises decentralised collaboration among individuals. To effectively operationalise DAOs, it is imperative to ensure continual engagement and involvement of contributors. One effective approach to accomplish this objective is to incentivise and reward contributors. However, a significant challenge in designing incentive and reward mechanisms in DAOs is to determine the most deserving contributors for these rewards.

In a conventional work setting management typically determines any financial incentives for employees, such as salaries, bonuses, and other rewards. Similarly, in a typical DAO-based work environment, these determinations are made by a select group of participants who may possess varying levels of decision-making authority within the DAO. Usually, upon submission of job proposals, participants must undergo a voting and approval process by administrators and/or the DAO community, which can be a time-consuming undertaking due to the significant effort required to track individual contributions. If a DAO operates in a fully decentralised manner, all decisions, including compensation for each participant, would ideally be made by the entire DAO community rather than by select indivuduals.

To tackle these challenges, specialised tools such as Coordinape have emerged. These tools are designed to establish fully decentralised, equitable, and impartial reward mechanisms within DAOs.

What is Coordinape?

Coordinape provides a platform for the community to oversee various projects on DAOs, enabling all participants to reward and incentivise each other’s contributions. It’s primary objective is to establish transparent reward and incentivisation mechanisms without necessitating any intricate voting or covert procedures. Coordinape adopts a decentralised and collaborative approach and delegates the power to make decisions to the community at large. This tool is intended to sustain and expand the community by compensating contributors, motivating participants, and efficiently managing resources within DAOs.

Coordinape asserts that this approach generates several additional benefits, including:

  1. enhanced understanding of work prioritisation within DAOs
  2. identification of the most valuable tasks completed and their key contributors
  3. improved visibility into work allocations within DAOs and collaboration opportunities.

How does Coordinape work?

Coordinape offers multiple products, and one of its key offerings is the ‘gift circle’. A circle comprises a group of members with funds to be distributed among themselves during a specified timeframe. This product is designed to enable contributors to allocate funds to others within the DAO by joining circles to which their wallet addresses are added. DAO members can then choose contributors within their circle and acknowledge the value they create by allocating reward points or adding notes to appreciate their contributions. Once reward allocations are added, contributors can access the “map tool,” which provides a visual representation of the reward allocation for the entire circle, enhancing transparency. After reward allocations are made, funds can be distributed within the circle through automated wallet contracts and other existing mechanisms. This tool is primarily suitable for smaller groups as only a limited amount of information is provided on the participants and their contributions for decision-making.

Once the community has allocated rewards, DAOs can utilise another complementary tool developed by Coordinape, called “CoVaults,” to enable decentralised compensation for their contributors. CoVaults can be regarded as another specialised tool that is crucial for creating “truly self-sovereign labour” within the DAO ecosystem. This tool employs smart contracts to automate the payment process by paying contributors on-chain with any ERC-20 token. CoVaults supports various payment mechanisms, including rewards, fixed payments for salaries, recurring grants, and other basic income models.

Coordinape has been specifically developed to facilitate decentralised and collaborative decision-making by endowing the DAO community with the ultimate authority to determine who should be rewarded and how much. The tool streamlines the decision-making process by providing members with just the necessary information, avoiding overloading them with extraneous details. Consequently, Coordinape can also be viewed as a decentralised and semi-automated payroll management tool for individuals working with DAOs.

© RMIT 2023
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Introduction to DAOs: Decentralised Autonomous Organisations

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