Optimizing Autonomous Organizations & the Ethereum Merge, Chainforest's First Twitter Space
On Optimal Autonomous Organizations (OAOs) aiming to improve efficiency while maintaining the spirit of crypto, STEPN rewards, & the Ethereum Merge & Rollups
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TL:DR;
A new approach to governance of DAOs, called Optimal Autonomous Organizations (OAOs), aims to improve efficiency while maintaining the spirit of crypto
Solana’s new app STEPN rewards users just for moving
Chainforest hosts its first ever Twitter Spaces, with a discussion on the Ethereum merge and rollups.
In the past week, 13 new Rainmakers have joined the forest.
The top three channels were: 🎨 │ nfts-general, 🎮 │ gaming-general, and 🎙 │ general.
Optimal Autonomous Organizations
The article Optimal Autonomous Organizations, written by Curtis Yarvin — Urbit’s initial founder — argues that the current structures of DAOs is not the best form it can be. Instead Curtis argues for what he calls optimal autonomous organizations (OAOs), whose governance would more closely resemble a well run corporation versus the traditional direct democracy governance that most DAOs have today. His argument for this structure? Despite your political leanings, virtually everyone would agree that most governments have bureaucratic processes that make them inefficient at times. However, look at a large company such as Apple, and you will find a very well oiled machine with one goal in mind; give value back to the shareholders.
Curtis states that in order to be efficient, the only goal of the governance holders must be the success of the DAO/OAO. It sounds simple but what hinders efficiency is when governors have conflicts of purpose, which could be just a difference in goals of the organization, or a vicarious conflict. This is something that may not be in direct conflict with the goal of the DAO, but distracts or disrupts from that goal.
In addition to defining the goal of the organization, the governing structure must be set up in a way to “maximize the combination of efficiency and accountability”. This structure, as defined by Curtis, is not the traditional DAO structure of a direct democracy but rather the governors (token holders) vote by proxy the board of trustees, who in turn votes in the chief executive. In this structure, it is assumed that the governors will vote in the board of trustees who have the OAO’s best interest in mind. The board of trustees should remain anonymous even to each other, as to prevent influence from external and internal sources. Additional responsibilities of the trustees is to control the majority of the project’s assets (i.e. cold storage).
The board will not be active in the day to day operations of the OAO, with the exception of appointing the CEO/Executives. The CEO (or executives) will be in charge of setting the direction for the OAO, and in theory should be the best person for the job as they were selected by the anonymous board of trustees who should have the organization's best interests in mind.
One can see that by having one, two, or three people in charge of the operations that the entity would be a lot more efficient than the traditional DAO, which requires a vote for any major decision. The board of trustees will keep the executives accountable.
In a perfect world, this setup makes sense for many DAOs/OAOs that require quick decision making to operate effectively. Take an investment DAO for instance. There needs to be a small group of educated people making fast decisions on what to invest in, when to sell, when to buy, etc. It may not be the perfect structure for all purposes but given the inefficiencies we have seen in current DAOs, I believe it deserves consideration for future projects.
Solana App STEPN Rewards Users Just for Moving
STEPN ($GST) is an app run on the Solana network that rewards users for walking, running, or jogging. It markets itself as the ‘Move-To-Earn Crypto’. Twitter user @Route2FI posted a thread explaining the process to get started on the STEPN app. Essentially, the process is to buy a pair of sneakers (represented as a NFT). These sneakers allow you to start earning rewards essentially by walking or running. There are more nuances to earning, such as the type of shoes you buy, how many pairs you buy, etc. But for simplicity purposes, if you own one pair of STEPN shoes you can earn between 5-10 $GST (at current prices approximately $17 - $34) a day.
In terms of web3, this is a novel idea. However, apps similar to this have existed on web2 for sometime now. This has not stopped notable VCs such as Binance Labs, Alameda Research, Sequoia Capital, and Solana Ventures from investing in STEPN and the interest from users has exploded. The price of $GMT has skyrocketed over 3,500% since opening on March 11th.
However, not all are convinced about the long term success of STEPN. As explained by Rainmaker Devin - @0xMZO:
The thing that makes it obviously unsustainable is that the "game" is premised on "earnings'' and those "earnings" have to come from other players seeking "earnings" themselves. As much as they try to deny it, it's really just an obfuscated ponzi scheme.
In order for an app like this to be successful long-term, users have to not only seek the “earnings” but also use the app for fun. They use it because they want to, not because they are making money using the app. It was also suggested that STEPN is early and adding a tracking feature such as who runs the most in a certain amount of time, or who runs the fastest could add entertainment for those with a more competitive side. Amit points to the success of Strava as evidence of this.
We have seen web2 ideas translated into web3 before, some have been successful while others haven’t. Several aspects of STEPN resonate as a potential success. One is the utility of the NFTs, users need a NFT shoe to operate in the ecosystem. One can only imagine the potential for a market based not only on function, but on the design of the shoes (similar to how sneakerheads collect shoes IRL). The other is that who wouldn’t want to earn money while doing something healthy such as walking? STEPN has taken the Solana ecosystem by storm and there is potential that it remains one of the top apps in the Solana ecosystem.
Around the Fire: Chainforest Hosts its First Twitter Spaces
Chainforest hosted its first twitter spaces on its twitter page @chainforest_dao on April 20th. The space features Aric Chang, Yousuf Haque, and Mark Xu as they discussed the Ethereum merge and the rollup ecosystem. The twitter space was a success as over thirty people tuned in. A recording of the space can be found here. Stay tuned for more twitter spaces to be hosted by Chainforest weekly.