The New PoolTogether DAO
This is the first of two posts that present a new organizational model for the PoolTogether DAO. In this post we’ll review the shortcomings of our current DAO, reflect on our people and values, then present a new organizational model that better represents who we are and sets us up for success.
It’s important to note when speaking about the “PoolTogether DAO” that we’re referring solely to how contributors are funded and how we collaborate with one another. Control of the protocol itself is a separate issue that is not addressed by this proposal.
Our Current Shortcomings
The number of contributors to PoolTogether has grown significantly since the protocol was launched. Everyone has brought their own ideas, expectations, and culture into the community.
Early on, the community agreed to use the “improvement proposal” approach to make changes. People would write PTIPs to make changes to the protocol or move funds from the treasury.
The improvement proposal process is intended to make changes to a single, centralized software system. It is not an organizational model. This has led to two problems in particular:
- People viewed PTIPs as the definitive decision making process for contributors.
- The lack of a holistic organizational model led to a patchwork of operating procedures and approaches.
Often people would say “we should hold a vote for this” for complex decisions, such as launching on a new chain or incorporating a new asset. Token voting doesn’t work like that. Our contributors decide what they’re going to work on; every day they make their own decisions.
As a result, contributors have largely defined their own responsibilities, operating procedures, and compensation: resulting in a organizational patchwork. We have very little consistency in our organization, and this had led to problems that broadly fit into three categories: onboarding, funding, and decision making.
Onboarding
The DAO wouldn’t exist without contributors; we are the DAO. We push this protocol forward. It’s critically important to make it easy for anyone to contribute, no matter how big or small.
However, we’ve had significant issues with onboarding:
- Often someone will join our Discord and ask “how do I get involved”? We don’t have clear onboarding paths for professionals. How do we know what roles are available? Who do we send them to? How is someone “hired” to a team?
- New teams / groups / committees are very difficult to create. We have no standard as to what constitutes a “team”, so each one is bespoke. Responsibility, membership, and compensation all have to be negotiated anew. Writing PTIPs is both difficult and political, so people having been going directly to Pool Grants. There are committees / working groups / teams, and the definition between them isn’t clear.
Funding
Streamlined funding is critical to our DAO’s success. We need to compensate our contributors well so that we get high quality work and long-term alignment. We need to cover expenses so that our contributors have the freedom to do their jobs properly. We also need careful planning and oversight to make sure funds are spent well.
Our current organization has issues:
- Pool Grants is being used as a piggy-bank for our own contributors. The potential marketing team is applying for funding via grants, bounties were funded through grants, and the security bounties were funded through grants. We are trying to use Pool Grants to disburse operating capital, which wasn’t its intended purpose.
- We treat POOL inconsistently across the entire organization. PT Inc treats POOL as ownership, while other contributors treat POOL like money; valuing it based on the market rate. Part-time contributors have been receiving inordinate amounts of POOL, which has made full-timers unhappy. We risk losing those who are contributing most to PoolTogether by having inconsistent compensation structures.
- We lack any accountability and oversight. In PTIP-75 the Pool Grants team proposed a budget that included 10% of the liquid supply of POOL tokens. Only 1% of all POOL tokens were used to vote, and 0.27% was someone on the grants team itself.
Decision Making
We have very little consistency in how we make decisions. Much of this confusion is around what it means for us to be “decentralized”. Although the protocol is decentralized, DAO contributors need to be empowered to make decisions without relying on the slow process of the protocol like token voting.
To complicate decision making further, teams all use token voting in different ways. Regarding team membership:
- Pool Grants team membership is determined through polling / voting
- The Executive Team explicitly chooses their own members
- The Treasury Working Group does not have an explicit membership process
These teams all manage membership in different ways. New teams have to define their relationship with token holders, and token holders need to be aware of the expectations for their involvement.
Decision making for the centralized parts of the system has been unclear: we’ve had an open pull request for the front-end that integrates Transak, but it has not yet been merged. Pool Grants paid for the bounty, but the implementation wasn’t up to the standards of PT Inc, the controlling party. The reality is that the web site is a centralized component of the system, and decisions are made by the controller of the domain: PT Inc.
Reflections
Let’s take a step back for a moment and observe how we operate and what values we embrace. In aggregate, these determine the direction that our DAO is moving. If we know the direction we’re moving then we can better evaluate the next step forward.
- Contributors have organized around purposes that they believe to be valuable to the DAO. Grants, Treasury, Marketing, Community are all being examined. Contributors are smart and see blind spots in our DAO.
- Contributors have gravitated to areas they can provide value, and some even contribute to multiple teams. Even with our opaque organization, intrepid contributors have found where they best fit in.
- Important decisions are made with input from the community, or from domain experts.
- Contributors are largely trusted; they spend their budgets as needed.
- Contributors are diligent about tracking their progress, and providing updates (Grants Team, Exec Team)
- Teams have embraced the addition of new team members. If someone is capable of filling a position, we bring them in as a contributor.
These patterns speak to our values. They help us recognize that PoolTogether people:
- Are inclusive; we believe anyone should be able to participate
- Are transparent in how we operate.
- Have integrity. We hold ourselves accountable for our own actions and can be trusted to operate by our word.
- Are self-motivated.
- Are rational. We engage with the DAO and experts for critical decisions.
- Operate to the best of our abilities and in good faith.
- Want to make a positive contribution
These behaviours and values all point to a fundamental truth: we are a self-organizing and self-managing organization. This may be self-evident, but it was only proven after an organizational vacuum revealed just how proactive and intrepid some of our contributors are.
The New DAO
Below we present the new organizational model for our DAO. This model will galvanize our DAO by codifying our best practices as operating standards. We will also introduce a few new standards to improve our coordination and accelerate our innovation.
Teams
The base organizational unit in the new DAO is the “Team”. A Team is a group of contributors working towards a common purpose. Teams are purpose-driven. There must have clear, measurable goals in support of that purpose.
Contributors form teams as needed; depending on the needs of the DAO. Some teams may be temporary, others permanent. Any group of like-minded contributors can come together to form a team. A Team is official when it has a budget, or if it is staffed by full-time or part-time salaried contributors.
Teams ask the community for permission when they form via PTIP and request renewals, but once they are formed they have the discretion to take action and move quickly. Teams are free to manage their work, their membership, and any other decisions any way they like. However, if a decision impacts more than one stakeholder the decider must use the Advice Process (below).
Teams define roles that must be filled by contributors. Contributors may fill multiple roles, whether on the same team or across them, and the team may need more / new roles as it grows.
Budget Proposals
Teams will need budgets in order to fulfill their goals. It’s expected that these requests will be written as PTIPs. The budget request must include:
- The Team’s purpose. What is the team trying to accomplish? How aligned is this purpose with the DAO?
- Performance goals. What specifically is the team expecting to achieve? How do the goals support their purpose? Teams will likely have new goals for each budget renewal.
- Performance indicators. Indicators allow us to measure progress toward the goals. Bonus points for including both leading and lagging indicators (metrics that the team controls, vs metrics that measure outcomes). If indicators are more qualitative, then they can be represented as milestones.
- A budget breakdown. How much money does the team need, and what are they spending it on? What roles does it need filled? Are existing contributors filling them, or new ones?
The Objectives and Key Results pattern is a great approach to defining performance goals and indicators.
Budget Frequency
Teams should request their budget in quarterly increments, synchronized with other teams. This makes it easier for voters because they can vote all at once. Teams will also appreciate this, because their proposal is more likely to reach quorum. Quarters begin on the first of Jan, April, July, and October.
In terms of budget duration, new untested teams have a better chance at securing a budget of just one quarter. Older, more mature teams will have an easier time requesting a budget for two quarters or more.
Progress Updates
The team must publish monthly progress updates. Progress updates are intended to show the progress the team has made toward their goals. Ideally this includes actual numbers and charts of the performance indicators they defined before, or in a more qualitative way it could be which milestone the team is at.
The update should be succinct and show only the most important information so that the DAO can easily digest it.
The progress update is not a laundry list of “completed/todo/blocked” tasks; this update is about where the team is at with respect to their goals, not how they are getting there.
Purpose & Performance Goals
A team’s purpose and goals are defined in their budget proposal, but they can be re-assessed as needed. The team may learn new things, or the DAO strategy may change.
Ideally, teams update their goals at a quarterly cadence to match the Council’s strategy updates.
The Council
The Council is a support group for Teams, and is made up of team members. The Council serves a number of roles:
- Meets weekly to share status updates.
- Monthly Team performance check-in
- Meets quarterly to define DAO strategy
- Establishes guidelines or standards (quarterly or as needed)
- Help onboard new teams, contributors, and facilities existing teams (quarterly or as needed)
The Council gives Teams an opportunity to communicate, share, coordinate and speak with a common voice.
Membership
Each offical Team must have at least one representative on the Council. They can have more than one, as well, because any full or part-time salaried member of a Team can join the Council.
Weekly Updates
Each week the Council meets so that teams can share status updates. Each official Team must have a representative at the weekly update. The representative shares what the team completed the previous week, what they’re working on the next week, and what blockers they have (if any).
After the status updates, the Council is free for open discussion.
Monthly Check-Ins
Once per month after the weekly updates, the Council takes some extra time to review the team performance updates. The gives Council an opportunity to commend or offer advice to teams.
Quarterly Strategy
Every quarter, or as needed, the Council articulates the high-level strategy for the DAO. This strategy drives the purposes and goals for each team.
Guidelines and Standards
The Council gives teams an opportunity to get together and coordinate on important issues such as compensation. There will be concerns that affect all Teams, so it’s important to create space for discussion.
Facilitating Contributors
One of the Council’s most important jobs is to facilitate contributors; both Teams and individuals looking to join a Team.
The Council has a 1-of-N multisig that has 10001 POOL delegated to it by governance. All current members of the Council can be on the multisig. This allows the any member to create proposals for new teams or existing teams (keeping the Advice Process in mind!).
This is a critical role for Council: to support new and existing teams. Council having the ability to create proposals has important positive effects:
- Council becomes the go-to group that is consulted with for new teams. It’s the first step in our funnel.
- It removes friction to create new teams or fund existing ones if a team does not have POOL
- It encourages teams to coordinate with Council
For new contributors, the Council serves as a hive mind that knows where the open roles in Teams are. A contributor can approach the Council, and the Council will be able to give them a role that suits their skillset.
Decision Making
Teams and team members can make decisions on their own. We embrace self-management as much as possible. However, any decision which affects more than the deciding party must use the Advice Process.
For example:
- anything that impacts multiple team members or multiple teams
- addition or removal of new Council members
- new team proposals
In fact, we largely already do this. Making it explicit ensures that we continue to do so!
The Advice Process
In a self-managed organization, people make their own decisions. They do not need to ask permission from a “boss”. However, when someone is making a decision that affects more than themselves, they must first seek advice from all affected parties and subject matter experts. The more important the decision, the more people that should be consulted. This can be done many ways; whether consulting a group, or through one-on-one conversations. The advice must be taken into serious consideration, but consensus is not required. The individual is empowered to make the final decision.
Conflict Resolution
With a self-managed organization, there will inevitably be disagreements. This might be about a decision, or people might just dislike eachother. Conflicts must be resolved through a peer-based process.
When there is conflict, the resolution escalates as follows:
- First the two parties try to sort it out privately. The initiator of the process makes a request, and the other person responds “yes”, “no”, or makes a counter-proposal.
- If they can’t find a solution, then they nominate a colleague they both trust to act as mediator. The colleague supports the parties in finding a resolution but cannot impose one.
- If mediation fails, a panel of topic-relevant colleagues is convened. The panel’s role is to listen and help shape agreement.
Summary
This plan was a collaboration between a number of senior community members: @BraveNewDeFi , @gabor, @dylan, @Leighton, @Pierrick, @Tjark, @Torgin, @underthesea and myself. This list is missing a lot of people, however, so we want to hear from you.
We believe this new organizational model will streamline and strengthen our DAO.
The bootstrap Council’s next steps are to define our mission, our strategy, and how we can re-organize the teams so that they have clear purpose and can execute efficiently.
We’ll also be working on a unified compensation structure, so that all contributors feel that they are fairly compensated, no matter how they contribute.
In the next week or two we will present an initial plan. In the meantime, we’d love your feedback and thoughts on this new model.