DAO dos and don'ts: learnings from the community on how to get your DAO thriving

Transcript

all right so hi everyone i'm tee i'm the ceo of maltese um my voice is a little bit broken i went to the degen yesterday so i'm actually uh i'm glad to see you all here it's very hot so thank you for for making the effort uh so a few words on multis on what we're building so we build corporate cards and financial software for the web 3. um so the idea is to have entrepreneurs in finance teams um you know automate the crypto and the usd payments and close their books faster today is not about multis though we we wanted to experience a new to experiment with a new format usually we talk about you know the

future of finance we talk about d5 we talk about integration some more technical stuff so we thought that for the first time we would just talk about basic things very basic thing going back to the basing of just you know building a project spinning off a dao and try to share some of the good practices some of the tips that a lot of dao core team contributors have been sharing with us over the past week we are super fortunate to be working with 150 about 150 right now and you'll see that most of the things are again very basic but it will if you're starting a project they will you know they will help you avoid costly mistakes they will help you save time they will

help you well maybe get a better sleep um let's do it um well i guess i'm easy introduction um so okay come on let's yeah um so yeah the truth is when you're starting a project uh it's all about building building building it's fun um you want boarding new people new contributors uh you guys are reinventing the future of the web the web as it should be but as soon as you start growing a little bit running a dao is not as sexy as we all thought it would be um and i guess the first thing and i'm gonna start with the the least sexy of all things um

legal for a long time i thought that being a dao meant to avoid at all cost um you know being registered there are more and more frameworks today that help you do so in a very cost-effective way so why should you register in the first place well very basic stuff you might work with contractors and those contractors at some point they will need an invoice because themselves have to fill taxes right so they will feel for example in the us what is called w9 so if you're working with them and you pay them over 600 bucks a year you have to declare something but i guess the real reason here because nobody wants to pay taxes in the end the real reason here is protection as soon as you start registering your

dow your project i mean you have to realize that when you're running it out every single contributor every single member of the community that touches token might be liable at some point um we are working in a space where innovation is constant where we are always you know moving fast breaking things evolving a very gray area so you never know what's legit today and what can be or what cannot be legit tomorrow um so again having a legal entity whatever it is and we can talk about it later means you can be protected you can protect your contributors you can protect your stakeholders as a whole um [Music] we have some examples of jurisdictions of course i'm not a lawyer don't expect me to

don't expect to receive legal advice here those are just frameworks that we see more and more in our space um the most common one right now is to get the llc so that's called a dow llc in wyoming um it's pretty easy to do the only thing that is a bit cumbersome is that you may have to declare i mean you have to to feel what is called a q1 which is um which is basically tax feelings uh it's taking a lot of time because it was designed for investment funds at first uh there's a new thing popping out which is called um an incorporated nonprofit association so i was so first sorry for example wyoming you have companies like um organizations like maker dao who are registered there

una's is a new is a new status that i recently came across with for example concash so cameron told me about this a few days ago the beauty of this is that if you're not considering making profits and distributing dividends tokens to stakeholders you can build this kind of very very lightweight um you can register this very very with this very lightweight status you don't even have to do extensive extensive feelings because this is an association um of course if you uh start with your project before decentralizing you might go with a very standard c corp in the us this is what we're starting with as well this is very common for tech startups um and you might consider you know spinning

off your dial and moving to wyoming or others after after a while of course europe um this presentation was designed mostly for people in the u.s i'm sorry um but you do have a lot of options in switzerland um the the crypto valley for example is is a place where um in the the control of zugu um a lot of companies have special benefits there um a lot of uh and they're trying to attract more modals so the firmware is pretty uh pretty favorable there um of course as i said i'm not a lawyer you need to do your own research and i strongly recommend you guys to dig further in lex dell discord these guys are doing an amazing job at just compiling whatever legal status

you can have at basically finding ways for you guys to build your dao in a very you know robust way so that you can focus on building without taking too many risks um they're amazing you don't have to do it alone i would suggest it even i have to say i hate lawyers but at some point you have to talk to them we can make intros so that you don't burn all your cash um and picking the good ones you can also consider trying tools like cadidao so we have a partnership with them so basically the beauty of this tool is that they help you set up llc in a few seconds um everything is the whole process has been predictivized um it's uh it's really powerful so it's a good way for you guys to get started at minimum cost of course we can make intro there too

now um we are jumping to another topic that we hear a lot um and again this is not an expert talk so we're just sharing basic tips so what we mean by what do we mean by treasury management it's basically about holding your funds hopefully you got some funding you should some tokens for example it's about planning the way you're going to spend them with your teams it's about organizing those the spending and spending uh and controlling it making sure that you're here for the long run the of course you know um you have to do it it's just you know it's a very pompous word but you have to make sure that you're not burning your cash on on paddy projects to make sure

you're enduring you're here to stay um you are you need for casting you need to know when you run out and for this recommend the first thing we recommend is actually you know a safe keep using the right tool to set your wallet you'd be amazed to know how many dials just start with a with a minimus wallet we literally talk to people holding millions on metamouse wallets we we strongly recommend multisignature wallets the reference to the space is the safe well nose is safe we're just rebranded and safe um multisig for those who are not familiar um it's basically a smart contract when every transaction has to be approved by a set of other signers within the wallet uh you can make sure that funds are

never used um you know in an undue way what at hygiene so that's another topic we see a lot and we help people with so again cryptos crypto means thousands of networks thousands of assets multiple networks multiple wallets you want to make sure that at some point you keep a spreadsheet where you have all your wallets at the same place where you know what who designers are at least with a key or with some ids this is the best way for you to understand where the treasury money goes um start british ratchet um we we can share templates uh to help you start it we'll we'll publish a blog post on this when you start growing you can start using tools like multis we basically get all the transaction in

a very nice way and we give you another view of the spending per team per category so that you always understand what's going on with the funds um bookkeeping is a nightmare but maintaining clean book will change your life um this is something we we learned the hard way we started like a lot of people so even though we are not a dao i can share this experience we it took us i think nine months to record the first transaction we ever did on a spreadsheet um and we did it because our accountants and our investors um just you know literally demanded it uh it took us like two weeks

to sort things out so you wanna you wanna make sure that you do beekeeping which is basically very simple it's about tracking your transactions about recording them on a ledger a spreadsheet for example and it's about making sure that if at some point you have to pay taxes because you are registered you can do that um and of course it's you know it's something that happens in web 2 but in web 3 as well we're not exempt um [Music] the the key thing is not really about a tool um oh god it's so hot um it's mostly about discipline it's a mindset we hate it we want to focus on building cool things um but if you don't start with a spreadsheet and if you don't start

recording every single transaction you do you're going to end up again like us or like a client of ours for example who who had to hire external consultants because they didn't even know how much they spent on gas fees how much they had spent on gas fees over the past three years it took them three weeks going through every single transaction or ether scan because they didn't have the discipline to record this transaction at first so my strong recommendation is just do it take a single spreadsheet um you know just start with basic stuff like name of the wallet name of designers um basic category is like hey is this something related to marketing is this something related to you know devops uh qa

whatever just do it um and and do it consistently um [Music] if you are doing more complex stuff if your if your volumes or transactions are increasing if you have more and more um you know flaws of funds i would recommend to go so a first step will go probably with two like multis so that's the kind of stuff that i showed you where you record your transaction you keep them clean you have categories and all if you do more complex stuff you start interacting with more exchanges for example you can use tools like crypto it's a bit more advanced more designed for accountants but you can still use it um cointracker is one of the best tools out there to understand what you're supposed to pay in terms of taxes and of course if you're doing crazy defy

you might want to talk to an accountant at some point we're working with amazing accountants that we can recommend to that we can refer you guys to who understand the specificity of web3 um i wouldn't say that native with whip at least they get it and that's a huge a huge start um so next i wanted to talk about something a little bit different so again this talk by no means exhaustive you know it's not about all the challenge you could face as a dao we just you know hand-picked a few of them that we thought would would be a little bit different that we what we usually hear um in this kind of conferences hiring um so you have a dao it's up and running uh you're building an amazing protocol

everything's in order um but managing stakeholders in a dao is extremely confusing you have so many different types of stakeholders you have the core team you have you know call contributors you have pod leads you have treasury leads we don't even know how to call them right every single diode has a different taxonomy you have contractors of course as well hiring the right people can be extremely difficult extremely hard and for a long time i thought that hiring in a dao was very different from hiring in web 2. not that much actually when you think about co-contributors and i'm going to show you a few an example of this central line where they have a very robust process that you can get inspired from

to help you pick the right people to build your project [Music] the the first thing before hiring the people and again that sounds obvious but we've got a lot of people who never did it you need to define your needs so you need to that they could go with a governance proposal we we have some examples with pocket for example that we can share they they write precise job description for every single contractor every single proposal and they match those two and you have to build a pipeline um we we did the maths we talked to a lot of people in the space and usually it's about you know hiring is only about 10 sorry um finding people um through job bus is only ten percent of the

people they hire everything comes from network everything comes with from the from the community and the best way the thing the strategies that work the best are basically to incentivize with native tokens people from your community to refer the right people and to get them in your pipe and then in a process i'm going to show [Music] so a few words on a process you need one you need one usually it starts with a with a proposal with a you know outlining the process you get it approved and from there um you can have multiple different stakeholders joining this process uh we'll we'll write a post on that i should have maybe should have added more details on that but i'm just going to describe the process at

decentralens which i think is one of the best out there so first there's a candidate of course there is a referral so that somebody from the community who's actively joining the process then you have a team lead so i'll talk about team structure a little bit further but you have a team lead so usually a call contributor then you have a team member so that's somebody who has the same skill set as the people you want to hear you want to hire and can vet those skills they have reference contacts so that's you know former contributors who work with this this this potential new hire in all the dow other projects for example they have much but what surprised me the most was

the fact that they have what they call a nature called a nature facilitator so just like in web 2 you have somebody like a co-contributor whose role is simply to make sure that the process goes smoothly and then you have a community witness um so that's simply somebody who will make sure that the whole process is done in a very um caring way respecting the values of the dow so as you can see you have seven people involved in a process so it's really not up and buffett in the end and successful devils all have these kind of processes that they implemented very soon [Music] i wanted to talk very quickly about cardi ape i don't know if you guys are familiar with this tool um i think that was built by the former um founders of yearn at

first it's basically a way for you guys to once you hire the right people the right you have a thriving community you want to understand what people are working on you want to be able to map and visualize the flow funds when you pay when you when you incentivize them for example and coordinate is an amazing tool for this it was built exactly for this build a map of contributions making sure the right people are getting incentivized the right way making sure the right people are working with the right teams [Music] and which leads me to another point i wanted to touch base on which is the structure so i'm going to take two examples here so idle finance and nyx dao so idle finance is basically a yield

rebalancer and links thou built the first membership community around the golf course so totally totally different examples the um so usually so the way they did it uh so first they started without any structure without any organization but soon they realized that i was a tall nightmare nobody knew what they were working on and so they came up with this setup where so they spin out a lab which is a c-corp they have a foundation they have a foundation which is in wisconsin they have co-founders in the labs which are all domain experts and then they set up like multiple dowels so usually each

of these sub-dials having a multisig every single dao is called a pada or a league they have community leads who are elected by the community and who are building their own team everything gets bitten and approved by the community of course to governance proposals and all of these subs dials usually report to a master dao which is very often the treasure one so the big multisig of the dao so that's kind of the way those guys structured the this whole organization i think maker is doing something similar so you would have a dow for hr you would have a dial for um you would have dial for marketing for example uh you would have a dial for you

know whatever the whatever the dial whatever the project is um and it's been working super well since they implemented this and the last thing that we talked a lot about about idle i think i need to be careful with the with time is uh one of the misconception as well is that with you know just building stuff and we don't need metrics and i'm going to show a few examples of matrix that we believe every dao should track the so what do you mean by kpis by matrix it's very simply a measurable value that can help you demonstrate how effectively a pod or effectively a league is working

is achieving the key objective as a doubt it's also a nice way for simply to align the team the community contributors behind a single common goal um [Music] a few examples here that we can share as well so for example so the first example is about marketing so that would be uh the kind of kind of matrix you could track um as a marketing league a marketing pad um you can have stuff around um you know voter participation of course this is a key one how active people are in the community um of course you can have product one issue if you're building a product um an

application on top of the protocol protocol one this is something where probably people are most familiar with it's basically how much money people just like for example in a protocol and the one i like is really about burn rate but i'm biased of course because i'm building materials but it's really about burn rate cherry size token appreciation in and outflows those are the basic things that uh people like idle or links for example are tracking on a weekly basis and so we do recommend to track these metrics um we do recommend to usually start with a proposal to align everybody behind those goals those kpis and to share them um we um one of the key missing thing in the

early days of davos was the fact that nobody knew again how effective the team was and whether people were actually you know reaching the objective of dao um you can start with very simple dashboard could be a spreadsheet you can go with june which is an amazing tip which is a very more complex complex tool but really exhaustive so you can basically map and share any kind of data you want multis is more for financial data we built a function to export very easily spending breakdowns for example by team by categories by pods and of course it's all about monitoring reporting and improving and you need matrix to do that i think this is it um

we wanted to keep it short again we wanted to keep it super basic this is the first time we're giving this presentation we wanted to experience with a new format so we'd love some feedback to make it better so i can save the community better if there are some topics that you guys want to dig because we do acknowledge that this is pretty shallow we are happy to dig them with to dig those topics with you guys shoot thanks okay yeah

awesome um so you mentioned the structure of like the sub-dials which is i think i've seen also in a in several hours that they use this this kind of structure which is quite modular and i like do you know think that they are also sending up legal entities for each of the sub-dials that are separated or how they're in terms of like the the interface with the legal world how they're doing that that layer of separation and that layer of interfacing with the physical world that's so that's a really good question that we we discussed with with idol again a few weeks back so right now there are two options you usually have people who are really trying to incorporate or register every

dao and sabdao basically each time there's some flow funds um they're trying to make it legit um could be in different exchange jurisdictions by the way depending on the the mission of the sub dao and then you have other people who only register those with flow funds um so i think that's the case for idle they the only they have two dowels registered they have the hr dial and they have the treasury though hrdo because they're contracting directly with people so they want to make sure that they have some kind of an audit trail and not doing things legit and treasury because they are you know managing like huge volumes so they want to make sure that you know if if there's a notice they can you know they can be they can be compliant as

well and the rest of the taos like the they have um i think they have a subdial about ethics so for example this one is uh is not registered thanks guys [Applause]