Mel A lot of this for me was inspiring people to get involved in the process. I was a DAO governance facilitator, not a president of the United States. Sometimes I would introduce intrigue or I'd even become adversarial if I had to. Have you considered this? Have you considered that? But I tried not to influence other people's thinking. I tried to keep it clean, and then I would get a pretty good idea of what consensus might look like. And if we had it, the answer was generally yes. Most times in the DAO, we were all rowing in the same direction.
I know that people are going to vote the seasonal package through or whatever, the more exogenous stuff, "let's upgrade our tokenomics". I was like, "this is never going to get through because the founder is not going to do it." But that didn't stop me from submitting proposals and stuff, to try and use governance as a communicative function, to say, "hey, here's something you guys might want to consider", knowing it's going to fail, but running it through a governance process gets quite a bit of visibility. Even identifying that the people and the process are too ingrained with these kinds of mechanisms to tease them out in their entirety, because the mechanism matters so much more at the different scales.
If I'm just talking to a buddy about my thoughts on a particular policy, a particular DAO upgrade, or even the sizing of a particular reward package, things like that is governance. Because at the end of the day, whether they change their opinion or not, their opinion is going to become more entrenched or open minded. But we don't need a mechanism to concede to each other in any way.
Artem Maybe I have an overly simplified model in my head, but I tend to break down decision-making into basically three stages: first sense-making, then proposals and deliberation, and finally ratification, which includes Snapshot, even though it's off-chain. What I'm primarily interested in right now is what happens before someone writes a proposal. And that's why I've been asking governance people about surveys and workshops, something that helps them identify a problem or tension to be addressed.
Mel Everything you're describing, at least in my opinion, is part of the voting process. Most people don't make proposals unless they think that they can influence the outcome. Then it's not really a proposal. It's just a complaint or whatever. So there's aspects to pre-proposal, what's required to be a good proposer or what process gets me from having zero context. There's a lot of things you can do to increase that context, but it gets really specific into why would you want somebody proposing in your particular endeavor?
And when you get to that point, you ask yourself, are you constraining that in any way? Does the whole DAO get to propose? Why spend energy getting somebody to the proposal stage when, in my opinion, you need the highest context people in the proposer position, at least in terms of high level initiatives. And then, sure, it's great to have "anybody can throw an idea out there" environment, but that's usually handled through Discord, non-governance channels, because 99.9% of those ideas are going to need too much work to be considered useful as a proposal. I wouldn't want most people proposing in most organizations.
Maybe GPT makes it easier to get it into the right language, but still, doing that matching function with the organization is something that takes a lot of time. I use Bloom's taxonomy: recognition, recall, understanding, analysis, and synthesis. It's just a framework for education, for learning. I use it when I'm trying to drill information into myself for presentations, things like that. That's the mental framework I used when trying to get contributors useful in my DAO.
Artem Amazing, this is exactly the kind of practical knowledge I'm looking for. Do you use Bloom's taxonomy when planning the next season in a DAO, for example?
Mel I would use it more so when interacting with different parties, trying to get them up to speed. Sometimes a proposal can be a smaller part of a larger process. For example, when we were doing seasonal planning at Index Coop, we had 17 departments, and we would try to inspire each of those departments to submit their own proposal for how much resources they needed for the season, and how they were going to meet the overall objectives. We could even introduce their own sort of top line objectives for their department, but they had to feed into the larger DAO objectives.
And then from there, we would inspire a proposal process, and we would have to run workshops where we'd say, “Okay, do you recognize that these deadlines are coming up? If you recall, last season, it went like this.” So I would try and introduce the same language of taxonomy into this thing. “Please understand that this season, these are the requirements, and they're different and they're more complex. So when you go back and you do your analysis to synthesize your proposals, make sure that you consider these things, because we'd like to see a different kind of synthesis this time. We'd like to see you guys talking to each other, have department level meetings with each other before you all come in with your own individual ideas.” Because the more integrated the package is before it gets to this stage, the more helpful it'll be to us when we're analyzing. And then when the founder is analyzing, we can try and explain these things out ahead.
And so it would just be a framework that I would use, like a communicative framework. But it really helped, because sometimes I get somebody reaching out to me and I said, “okay, the breakdown here has nothing to do with X”, they'd say, "oh, we put together this whole proposal", I could come back and say, “hey, this thing we discussed about crafting proposals this season, you missed this piece of it in your analysis”, or “there is an understanding gap here that we need to address.” I could call in other parties if needed, but it gave me a mental model to lean on.
Artem How did you learn about Bloom's taxonomy in the first place?
Mel I learned about it when I was probably 16 or 17. It was a biology class, and we had to learn massive amounts of information in short periods of time, like the names of all the bones in the body, the names of all the muscles, all those things. I had a teacher who worked with me, taught me this framework to drill massive amounts of information into my memory. I had this moment where I could feel it, wow. When you understand all the parts of a system, you can understand the system better because you get to understand all those node level interactions, how all the pieces connect.
So at first it just feels like you're drinking from a fire hose, "why am I learning all this stuff?" And it doesn't always feel good. But then you get to a point where your brain starts actually working in those terms. And the way I think about it is, if you're driving a car, you become the car. If you're driving a boat, you become the boat. You have to think about the forces on the system that you are governing. Almost the same way as ideas that generate the words that come out of a person's mouth. There's trillions of cells, and it takes a lot of coordination to communicate, but the thing inside of me that generates these words is not the words.
So it's the same idea. It's coordination all the way down. It's just how well you can express it. And I used to take that view, at least in a DAO landscape, where everybody wants to achieve the common goal, everybody wants to get to the promised land, you just have to craft the lowest friction paths to get there. To me, it was a more human process than anybody really wanted to acknowledge, to go around and try and garner a sense of alignment and then garner a sense of consensus.
At times it could almost become a bit of those hard choices where it felt like whipping votes. You're trying to whip the vote at a certain point, "hey, guys, we're not going to hit quorum here, can you get on your ledger right now?" And of course, 9 times out of 10, everybody's like, "Yeah, sure, I'll hop on and vote. Which way do you want me to vote?" I know that sounds ridiculous, but that was exactly how it would go because it didn't matter. We needed the DAO to agree because if we didn't, we weren't going to get over the line.
Artem This is deep. I bet you could give a great keynote at some conference. Speaking of the tools... You said it's like a mental model for you. Does it mean that you just talk to people in this specific way, like in Zoom or maybe in person or you also create certain templates for documents, maybe for Miro board or something else?
Mel My philosophy was generally to channel exactly what I needed if it didn't exist already and nothing more. So if I needed 4 people to agree on something, as long as I wasn't bypassing the committee, if it was a 7 person multisig and there wasn't a chat with those seven people and myself on it, I would just create one. But knowing what the membrane of appropriate deciders is in this context was really important, because if you drop in a big... let's say you drop into the forum of Optimism with some half-baked idea, you're just going to get told to go to Discord. It's almost a strain on governance to communicate outside of the appropriate channels.
That was always my view: as little as possible, but make sure to capture the essence of the group deciding. Most of those channels exist, if you're within a DAO, you know what they are, here's the core team chat and so on. Get as few people as possible to make sure that you have the right deciders in the decision.
Artem So basically you just use messengers like Discord or Telegram to talk to those stakeholders. And then I guess you write something down in your Notion, or something like that? How do you synthesize all that stuff?
Mel I think it's always in context. The beauty of most DAOs is that you don't have to do anything most of the time. At least in a protocol DAO, if you have a bunch of products out there on the blockchain, they're going to run forever. All you have to do is make sure they don't break and that people aren't breaking them. I think that in a research DAO, you need a constant hum of people doing things. You need tokenomics, or incentives or whatever.
But decisions being made, I think you have to categorize them. Are they affecting the governance of the DAO, or the output of the DAO, like the product, or the resourcing of the DAO? And I'd still come back to that mental model of as few people as possible to facilitate the thing... with that decision framework you laid out where there's pre-proposal, proposal and so on... I tend to think of voting as the overall act. Propose, decide, veto, execute and then account. You need some accounting function to make sure you can facilitate all this. But I would put veto in the hands of maybe every tokenholder, make it the function of the people that hold the vanilla token. If you need to get decisions made quickly, let the core team do whatever they want and then the general public can veto. That would be faster than "general public proposes and the DAO can veto." Because you always have those parties you can tokenize: founders, workers, general holders, liquidity providers, all those things.
Artem I'm thinking about the notion of alignment in a community. How do you ensure sufficient alignment around those seasonal goals or activities, for instance. Do you ever use Typeform or Polis or any other kind of survey to get some input from the wider community or you tend to reach alignment in some other way?
Mel I think alignment as a concept means "I know where I'm at, I know where I want to be, and you know where you're at, you know where you want to be, and those two lines just happen to be going in the same direction". That's organic alignment. To discover that, we need to have a conversation, maybe a very nuanced conversation. You and I need to know that about each other, to trust that alignment through time. Maybe we have that conversation, we trust that alignment today. And then motivations change. Maybe you have some family thing coming up and now your alignment is different and I don't even know. So I think alignment is a conceptual thing. You can find alignments, sure. You can also try and create them. At that point, you're trying to pull somebody into alignment with your thing. Maybe like token staking, I think is a good mechanism for this where if you stake a token and you can't unstake it, you're aligned with the outcomes of that protocol, whether you want to be right now or not. Now you've created alignment. After being aligned for your staking period of, let's say, a month, you know what that feels like. And if you want to continue to be aligned in that way, you can make a choice, a more informed choice, after basically giving up sovereignty in a certain agreed asset or whatever.
If you want somebody to align with you, "hey, this is the way, buy our tokens and stake them or whatever". That becomes a pitch. You're selling the idea of alignment, even in a community aspect. Because nobody's just going to show up and be like, "hey, what are you guys up to?" And whatever you have to create, "hey, here's what we're about". And at least at Index Coop, it was like, "we're going to release decentralized financial products that can bring prosperity to all". Well, okay, that's a pretty snazzy statement, but anybody who reads that is like, that does sound like a pretty noble outcome. Yeah, let's go do it. And then anybody who showed up, we're like, you're involved. On some level, you're involved. It's important that you're here.
We need you, but we need everybody differently. So find out how to get involved. So at that point you're pitching alignment and saying no matter what your alignments are, you're going in the same direction we are because we're for everyone. It's a concept that can be very broad. I think some alignments are ever fleeting or can last a lifetime. It's just you never really know in any given moment.
Artem I'm thinking about seasonal planning as a process. It's a really good use case for Harmonica, I think. You want to define those workstreams. "For the next 3 months or 6 months or whatever, we will work on these workstreams to achieve these goals." Do you get this alignment from the main stakeholders with the highest context, just to outline those goals, and then you present them to a community, with a slide deck or something.
Mel It's definitely more important to get alignment among the workers than the stakeholders. The stakeholders can have an infinite variety of motivations, but ultimately we want to hold on to these tokens because we think they're going to be more valuable in the future and then it's the workers that make that happen. So the stock model basically assumes that the one thing the stockholders have control over, which is the board is going to execute. If you think about this in DAO terms, the general token holders would elect a multi-sig of deciders, cause the board is a 50% plus one as well. Now you've created a little council. This thing then installs the CEOs and the CFOs and others officers. So the council would then be responsible for the executive function.
The alignment that you're talking about is the alignment between the council that installs the executives relative to the alignment of the executive function itself, which is the DAO workers, which is so much trickier to get. Because of bureaucracy, things like that. I ran the governance department of a DAO. My motivations were to make that department larger and even to make money for the DAO. So if we could create tokenomics models, there were all kinds of things we could start to get into and say, "well, this is governance on some level". And the you're a hop away from asking, "isn't everything we do here, on some level, tokenomics governance?" And the next guy over who's sitting in the finance side of the DAO thinks, isn't it all finance? It's all economic models, it's all whatever. So you start to get these considerations even among highly aligned people, because we all knew we were going in the same direction. We were all going to the promised land, we're going to launch these products, they're going to make a ton of money, they're going to keep happening. We'd all vote yes, but we were all voting yes for very different reasons.
If you look at that traditional model of stockholder board and then executive workers... Like the C level and workers problem management and then labor, it's very stratified and understood how that communicates back and forth and who's responsible for what in a DAO. I was a token holder. I was on the multisig, I was running all of metagovernance. We all knew what everybody was responsible for, I knew exactly who to message for any given endeavor. But at the same time, to answer your question, how do you gain alignment within that crew? The higher level message always needs to be clear, I think is at least maybe the punchy answer, but it falls apart even with that, maybe you're identifying the entirety of how to keep the whole ball of wax together. And that's the tricky bit.
Artem Maybe it's easier to get that alignment in corporations where investors buy those stocks, basically all of them want to make some profits on that. It's just a matter of how effective the board or the management is. Just be as profitable as possible. And with DAOs, I think those goals can be much more varied. It doesn't have to be about profits, can be about something else, public goods or generating some knowledge, like DeSci or… There's just more options.
Mel Yeah, you're nailing that way. You're nailing it. I can even maybe disambiguate it a little bit, because the number one rule of coordination in the US is any kind of coordination you want to do is fine as long as you use zero dollars or you use dollars. There's no real in between. So you have non-profit and you have for-profit businesses. The rule of law in crypto is you can do any kind of coordination you like, but if you want to scale beyond just buddies, you have to use an agreed upon currency. So if you're emitting NFTs or tokens or whatever the thing is, people have to want it. That thing then has to be valuable to the marketplace at large in some way, shape, or form. But it doesn't have to be dollars anymore.
At least as I see it, it kind of untethers that challenge that you just identified from all the challenges that exist only within certain regions or locales or where only certain currencies are really acceptable. And by doing that allows you to say, okay, we want to have outcomes that are not aligned with, effectively, the thing that protects human life at local levels, which is violence, consolidation, I guess, is how you kind of view it in a technical way. Because if you can break that thing apart, which is the control of the money.
Artem You know, I've been thinking about Harmonica’s value in terms of benefits. One thing is engaging more people. The other thing is making it faster, saving time, as opposed to a forum thread or workshop, for instance. Because with workshops, you have to process the inputs, and it takes a lot of time, based on my own experience. If you run a Miro workshop, you usually need at least a few days after the workshop to actually process all those stickers. Anything people submit.
Mel I used to track this... The term we used to use in business is man hours and man days, especially construction industry, is about 100 years behind. But I still think of it this way. In my DAO, if I called a meeting among all 120 people, even for 15 minutes, I was like, I just wasted 30 hours of my contributor base's life. I would do the math and I'd be like, can I personally work through this in less time? Of course I can. And then present a solution. So that was at least the way that I would avoid wasting time. But, yeah, I think you're talking about efficiency. I like it.
Artem Yeah, efficiency and engagement. And the third thing is quality control, or QA, because you can make sure that people answer very specific questions. And so the inputs would be easier to process, and they would follow a certain protocol…
Mel Appropriateness of inputs.
Artem Exactly, appropriateness of inputs, that's a great way to put it. I'm just curious if you see any value in that.
Mel Yeah, you're hitting on a few things. So one being speed. Right. And then less communication to achieve an idealized outcome, is the way I would say it. The tricky bit, or at least it begs the question of who's deciding that it's a better outcome than literally any other process. On the flip side, like, what metrics are you using for those three dimensions?
Artem Speaking of metrics… Do you try to get any success criteria from stakeholders? Is that something that helps to plan the season in a more accountable way? I'm thinking about accountability right now. I'm just curious because you mentioned metrics, and maybe metrics or success criteria is something that is also important to think about when talking to those stakeholders. Do you want to talk about this?
Mel Well, I think all of governance is a communication function between two things, but always more of something and less of something. So we use a small computer in our hands to control almost our entire life these days, right? You can break it down in a lot of ways, but our small brain controls our big body, whatever that thing is. A small amount of stakeholders control, maybe a large DAO. At least conceptually, Index Coop had all the tokenholders who could vote on things at the highest level, all of the DAO who could execute on those things, all the organs that made that DAO function, the founder and the founder's company.
There was nothing from a software architecture perspective that the DAO was initially responsible for, at least including the treasury and everything. Right? And so again, to go from a full autocracy to a decentralized thing, but communicated as such, "hey, the more responsibility you guys demonstrate, the more you get". And that's been, in effect, true, but again, to work through all.
And then the DAO did a large token sale to ten VCs at $1M each to basically create another voice within, a responsible voice within the community. "Hey, you are really good at managing money and investing. We need you to help us in our governance". Again, you had to go around to the stakeholders and say, what do you want to see? Why are you here? Why are you holding the token? What would make you accumulate more tokens? And you ask those questions preferably over drinks at a bar in New York. Again, to get the motivation of your constituency is the role of governance, is the role of a governor, I want to say. It's politics basically, but even at a DAO scale, of course, when you've got $500M in treasury, you're going to make sure everybody's rowing in the same direction.
So to pull together the constituency and say you're all connected through us, and here's how we're going to decide what our seasonal budget going to be? Because we, as a DAO, didn't say, "we think we need $4 million for the year". We literally went to the founder and said, "here's our treasury, here's what we do, here's what we can liquify without actually raising any alarms. Here's what the investors are willing to take as a devaluation hit." When we crunch the numbers 27 times to make sure they're right, what you want to do here, and then it's like, "okay, let it be $5 million this year". And so it's ordained and then it happens a month later in governance. It's just knowing what the goals of the actual stakeholders are. The people who have the ledger buttons that could stop it all in its tracks are the ones that you have to satisfy.
