DAOstack | The solution to Scalable DAO Governance

Now if you’ve been in the cryptocurrency or blockchain space for a while, you’re probably familiar with the terms “smart contract” or “decentralized applications” or at least heard of them before. However, one of the less talked about ideas is DAO, or Decentralized Autonomous Organizations.

Just like the internet changed the meaning and vehicle of communication and commerce. Blockchain is rewriting the rules on governance and transparency. We’re already seeing governments and authorities moving in to regulate or outright ban cryptocurrencies. Due to the threat of moving to a more system-friendly option than to maintain a tightly controlled privatized monetary structure. However, despite the technological breakthroughs blockchain technology has brought so far, one of the biggest issues faced is the inefficient scaling of decision-making abilities.

A DAO might be good at giving equal voice in limited numbers, but blow it up to the millions and it'd likely start facing serious issues long before it hits the million-mark and things start to fall apart pretty quickly. This has arguably become one of the biggest benefits of having and maintaining a hierarchal leadership, since a select few can make effective decisions, while the rest drown each other out.

In humanity’s case, the problem is never just a technologically inefficient one. We’re complex creatures who present complex problems for which complex solutions must be sought. What is needed, then, is the technology not only to allow for truly decentralized governance but to enable humans – considering the unique challenges we pose – to thrive within such a system.

Introducing DAOstack

DAOstack recognises that there is no one-size-fits-all solution for DAO governance as the needs of each organization or group would differ depending on context, complexity and conditions. With this in mind, they set out to create an offering that would allow each DAO to essentially mix-and-match when designing their own decentralized infrastructure. This also means that DAOstack allows for seamless integration into existing ecosystems.

Secondly, DAOstack understands that user experience is paramount, both on the front-end and the back-end. On the front-end, they designed their system to be accessible and easy-to-use for all types of users, ranging from tech-savvy developers to new participants to the DAO concept. On the back-end, each DAO is able to build their own unique dapps that meet the ends of their specific use case.

DAOstack is also introducing an important innovation in decentralized governance, something they have termed “Holographic Consensus.”

One issue with a DAO is managing both scalability (the number of decisions that can be made within a period of time) and resilience (ensuring those decisions are not corrupted). Holographic Consensus is a mechanism that allows a smaller group to come to a decision that is aligned with the interests of the majority.

How the Holographic Consensus works

Within the DAOstack system, token ownership (wealth) and voting power (reputation) are separated to ensure that the DAO is free from any corrupt influence. While tokens can be bought and sold, reputation (and therefore voting power) should not be transferable in a DAO.

The GEN token, which is native to DAOstack, thus works as an attention token in a staking system.

GEN tokens are not used for voting or even to buy votes; instead, they are used as a stake to increase or decrease attention to a particular proposal. If voters (reputation holders) support the proposal you have staked for, you stand to get more GEN as a reward. Alternatively, a failed proposal leads to a loss of your staked GEN.

This prediction market mechanism means that Holographic Consensus can reflect the collective will of the majority in an efficient and scalable manner while ensuring the integrity of the decision.

In this way, DAOstack paves the way for organizations to introduce collective intelligence into their governance models without compromising on functionality or effectiveness, and without being bogged down or blocked by scalability issues. This elegant design allows for the integration of crowd decisions that are driven by crypto-economic incentives and consented to by a network majority.

The DAOstack Ecosystem

The DAOstack is comprised of a number of powerful tech layers that, together, enable a new era of blockchain-powered governance.

Arc

A modular Solidity framework that lives on the Ethereum blockchain, Arc is the foundation of the stack. Arc allows for the deployment, configuration, and upgrade of “smart agencies” which are atomic entities of governance that live and operate on the blockhain with the use of smart contracts.

Thanks to its open library of governance modules and templates, Arc is to DAOs what WordPress is to websites. Each DAO is able to select the elements that are necessary for their governance ecosystem and build a solution that is customized.

This base layer will mostly be used by developers.

Arc.js

This JavaScript library eliminates the need for Solidity or blockchain expertise, thereby allowing front-end developers to build collaborative dapps on top of Arc. DAOstack’s goal is for Arc.js to be home to numerous dapps.

DApps

The application layer is expected to be the one that most DAOstack users experience, whether they are creators or participants of DAOs. These users will interact with DAOstack via dapps build on Arc and Arc.js. The first application being built is Alchemy, which is a native user interface for DAO budgeting and resource allocation.