Introduction
“FactoryDAO is a new DAO framework that lays the foundation for the future mass adoption of DAOs. FactoryDAO uses a modular framework of dApps to create a “DAO suite” that can be used by DAOs as part of a full-stack DAO design, or as complementary components with other DAO tools from across the DAO space.
The DAO suite aims to give DAOs the best chances of success by providing the infrastructure required for the full life cycle of a DAO, from launch, to making a market, through to building effective governance processes and building a path to long term sustainability (if desired). “
Dr Nick Almond
The Context
We are at the end of the era of centralisation. Conventional governance structures are failing globally and the world needs a new approach to organising at scale.
DAOs offer the potential to shift collaborative endeavours into a web native space, driving forward digital transformation and offering a much needed alternative to the analogue systems of old.
Decentralisation is a new design space for organisation and flips the notion of hierarchy to encourage mass collaboration through crowd consensus and the use of shared resources.
The Traditional Org
Most participants in organisations do not see or have access to the moment of incorporation. DAOs offer the possibility for participants to take part in the genesis of an organisation and have direct input into its future direction.
Traditional organisations are structured as pyramids of power, with a centralised executive class that retains decision making rights through direct chains of authority. DAOs invert this pyramid structure and seek to distribute power from a small group of actors to a crowd of participants that share the ownership and responsibility of the future of a network.
Typically, organisations use centralised applications to conduct their business. The Office 365 suite is utilised by over 1 million organisations, and Google Workspace suite of applications is used by over 6 million.
FactoryDAO aims to fill this technological space for DAOs, providing a collection of Web3 tools that can be used in a modular fashion to realise their goals and build strong communities.
These tools are built by a DAO for DAOs, and consequently are built by people that understand and live decentralised organisation day-to-day. The best DAO tools will be built by DAOs.
Organisational Tools
Traditional tools help organisations:
Build documents
Communicate
Organise
Facilitate collaboration
What traditional tools don’t do:
Allow an organisation’s membership to change instantly.
Facilitate the formation of consensus.
Empower a whole organisation to collaborate.
Manage digital assets.
Work on Web3.
DAOs are missing the tooling they require to operate, because they are closer to digital democracies than they are conventional organisations.
Why aren’t DAOs mainstream already?
The DAO idea is profoundly disruptive, but they are early and suffer from a number of key problems that have so far limited their adoption. This has left them firmly in the bracket of “emerging technology”.
Security
The first DAO was very publicly hacked, sending the Ethereum ecosystem into disarray and forcing a hard fork of the network. Consequently, the DAO idea was set back for a number of years.
Smart contracts are hard to develop and even harder to make secure.
Trust
DAOs aim to be decentralised, but often fall back to critical management keys, making them more centralised than their traditional counterparts.
This means that a small number of people can end the game, using their localised power to “rug pull” the tokens, they simply fail in a less nefarious manner, due to the collapse of personal trust.
Plutocracy
Voting is still the best way to coordinate large amounts of distributed people using digital assets, but this can lead to a small number of “whales” with all the power.
Plutocracy is the power structure that emerges, which may be appropriate in some cases, but leads to the disempowerment of all but the largest token holders.
Low Engagement
Even the biggest DAOs have very few governance participants.
Much of this arises from the plutocracy problem, but it is also due to lack of education, a lack of incentive alignment and opaque processes.
Ineffective Decision Making
Decentralised decision making is radically different from the decision making arising from the authority chains of a centralised organisation.
Proposal management is poor and “everyone can make a proposal” ends in chaos quickly. Additionally, the barriers to entry are set so high that only whales or team members can propose a decision.
DAOs can have billion dollar treasuries and end up barely spending any of it, just because they can’t decide what to do with it.
Bad Token Economics
The distribution of tokens is critical to a healthy sustainable ecosystem, and they often end up in the hands of people who paid far less for them than others.
They can be prone to capture and “governance attacks”, and they lack the tools for effectively utilising their reserve assets to build long-term alignment and manage their token economy.
FactoryDAO Fixes This
Rather than individual DAOs making thousands of contracts across the space that achieve similar goals, FactoryDAO provides a suite of contracts that will *build security* through progressive battle testing and iterative collaborative development.
They are designed with the game theory of *effective trust models* in mind and as a protocol, is moving moves towards a capture resistant management key architecture that does not risk the entire economy during failures of trust.
Collectively the DAO suite dApps *battle plutocracy* through the use of fair launch tools, quadratic voting, NFT governance and better token distributions.
FactoryDAO governance tools are built from the ground up with decentralised organisation in mind and are designed to *empower their users*, *remove asymmetric power* of core teams and *build engagement* through collective dialogue and decision making.
When used in combination, the FactoryDAO ecosystem creates a *healthy token economy* that has the potential for long-term sustainable value accrual arising from collective action.
The DAO Suite
The live dApps:
A fungible token batch auction system that sells tranches of tokens with full price discovery, ensuring that a fair listing price is found.
A token vesting and DAO payroll system that ensures that pre-sale participants don’t control the market at launch and tokens are emitted predictably over time. Later in a DAO’s life, Bank is used for emitting tokens to its participants either as an airdrop or as a vested allocation that minimises sell pressure on the exchange.
A staking and liquidity mining system that allows DAOs to control the emission of their reserve tokens to long term holders and LPs on their decentralised exchanges. Yield creates a gamified experience that gets tokens to the right people.
A full stack NFT minting suite for NFT DAOs with integrated whitelisting and price discovery. Mint hides metadata so that knowledgeable people can’t snipe rare items, mitigates against failed transactions and gas races and finds the best price for tokens at mint.
A gassless voting and decision making dApp, which allows DAO participants to not only reach consensus, but engage in dialogue, curate content and engage in collaborative sense making.
An ERC20 EVM token bridge that allows DAOs to expand across the multi-chain space.
The dApps in the Roadmap
Decision is a dApp for controlling a modular DAO ecosystem in a totally trustless manner. Using zero knowledge cryptography, Decision allows private votes to occur that can execute any on-chain smart contract outcome.
A price discovery and auction system that allows DAOs to sell their curated NFTs from their treasury at the best price possible. This is crypto Christie’s for DAOs.
An NFT based contribution tracking and reputation building system allowing DAO participants to build and curate their decentralised identity. Identity will facilitate delegation systems and allow participants to take their contribution history to other DAOs.
A portal into all of the DAOs in the FactoryDAO ecosystem providing open data on all aspects of DAO life.
A decentralised token-gated “ask me anything” platform that provides international translation capabilities and incentivised curated questions.
The DAO Designs
The Token DAO
A fungible token controls the ecosystem and the governance. This allows DAOs to bootstrap a treasury using their own network asset and issue it to their participants over time. Tokens can then be designed to capture the economic value generated by the DAO participants.
The NFT DAO
Every NFT project can be a DAO, and by using our governance tools they can build strong communities and move into periods of sustainable growth in an increasingly competitive market. Portions of token raises and secondary market fees allow NFT projects to progressively bootstrap their treasuries.
The MetaDAO
Every NFT DAO can be a MetaDAO, which is a DAO with subDAOs. MetaDAO architectures allow the formation of focused communities, where selected token holders gain access to subDAOs that might even become full DAOs one day.
The Hybrid DAO
All of the above. A combination of a token to act as a treasury bootstrapping tool and for capturing economic bandwidth and NFTs for culture creation, governance and identity formation. We think this is the killer DAO design for the next era of DAOs.
The Path to DAO
The Launch
The first thing a DAO will need to do is get those digital assets into the hands of its community. But getting them into the right hands can be difficult.
Bot battles. Token Hoarders (The Pranksy Attack). Low-float pump and dumps. All of these things make decentralised launches a mess.
Using a combination of Launch and Bank, Token DAOs can conduct a launch that is as fair as possible, shielding whales from the initial liquidity and discovering a fair price at launch.
Making a Market
Issuing a token is one thing, but making sure you have sufficient trading depth is another. Once a DAO token hits a DEX, you need to manage a market without the help of a centralised exchange.
DAOs can do this by issuing tokens from a treasury to LPs and using Yield they can do that over their whole lifetime by effectively managing their token emissions into the market.
Additionally, DAOs can incentivise holding by providing token incentives to those that stake in not just one token, but multiple.
Getting the Job Done
DAOs are often set up for a specific purpose, and you need to actualize this goal with effective decision making.
The best DAOs will do this whilst involving as much of the community as possible. Using Influence, DAOs will be able to decide how to do it, or even decide what the job is using our emergent governance approaches.
Become a Sustainable DAO
Some DAOs want to become a long-term organisation and in fact, these can be more resilient than traditional orgs. In order to achieve this, they need effective governance processes and long-term incentive alignment.
The most long lasting DAOs will effectively manage treasury assets and do so with DAO consent.
They will also have consistent long-term strategies for driving autonomy through censorship resistance and building engagement from as much of the community as they can muster.
Maximising Success Through DAO Alliances
FactoryDAO is not just an infrastructure platform, it's a Hybrid MetaDAO with both token and NFT governance.
FactoryDAO will showcase all of its tech and build a dedicated community that will earn money to support the DAOs that use our tech and that we build alliances with.
DAOs that build with FactoryDAO are not on their own. Within the FactoryDAO ecosystem, the following subDAOs exist to support both the ecosystem of FactoryDAO and its partners.
FVT DAO
The finance.vote ecosystem continues to grow within the FactoryDAO MetaDAO and will become a governance minimised DeFi DAO building liquidity as a service and a tight-knit community of token economists and decentralised tech specialists.
KnowledgeDAO
A research, education and consultancy DAO that will train DAO leaders and developers, advise DAOs on their design and token economics and ensure FactoryDAO stays at the cutting edge of the space.
DAO X
FactoryDAO’s marketing subDAO, which builds distribution funnels across the crypto space, supports adoption and decentralised content curation.
DataDAO
A data as a service DAO that seeks to find the best data scientists in Web3 and produce important alpha that will enhance FactoryDAO tools and provide critical information for the Dashboard.
TribesDAO
A decentralised polling system that will consistently poll the tribes of crypto for their insights using FactoryDAO voting tools. The tribes generate market intelligence for FactoryDAO, our alliances and anyone else who wishes to ask the cryptospace questions.
What is FactoryDAO?
FactoryDAO is a DAO that builds DAOs. It’s a space where you can get involved with us to learn, support and build DAOs. It’s also the place where you can launch, build and manage a DAO with the best chance of success.
The modular DAO suite, which is built and curated by a decentralised community is the key to opening up the next generation of DAOs. This new era of DAOs will take not just DAOs, but the whole cryptospace to entirely new audiences and markets.