18 November 2022: Why we're building unstoppable, on-chain organizations

The Why behind DAOs, Aragon sponsoring and speaking at ETH Gathering Barcelona, Aragon Developer AMA series kicks off next week

Top 3

• Going back to basics: why do we build smart contracts for DAOs to run their organizations on-chain? Why do we believe the organizations of the future will use the blockchain? This week we dive into our continued commitment to our mission.

• The Aragon ZK Research team presented exciting insights at Ethereum Dev Barcelona, an event at Eth Gathering Barcelona. Harry, product marketing manager, is also speaking on a panel. Aragon is one of the sponsors of the event.

• Next Friday at 3:30 pm UTC we’re hosting the first AMA of our Developer Series. Juliette (Developer Advocate) will interview Aragon developers to dive into the details on why and how the new protocol and App were built. Next week she’s interviewing Carlos, VP of Engineering, to give a behind the scenes look at the protocol.

Highlight of the week: Why we’re building unstoppable, on-chain organizations

Ever since our manifesto was published in 2017, we’ve been building smart contracts to enable unstoppable organizations on Ethereum. The recent collapse of FTX has shown just how necessary this work is. So, let’s dive into the why behind on-chain DAOs 👇

“Don’t be evil” becomes “Can’t be evil”

Google is famous for its “Don’t be evil” slogan that was displayed in its company headquarters. This slogan was to remind people of the power they had—to give or restrict access to the world’s information—and to not abuse it. 

However, this means we need to trust the people working at Google to choose not to be evil. This means we have to put extremely high amounts of trust in humans and how they respond to incentives that might not always be aligned with the best interests of the organization, the purpose, and the people it serves. 

With a smart contract at the center, incentives are more programmable and predictable. Humans cannot intervene to change the rules of the game after its already up and running. With smart contracts, there is less of a gray zone and less opportunity to be swayed and get compromised.

Just like a vending machine doesn’t care who is on the other side paying for a candy bar, a smart contract doesn’t care who is sending and receiving funds. The only way to change the way the vending machine works is to take it apart and start over. 

Many DAOs today have to trust a multisig of just a few signers. All the members of the DAO are trusting just five people with their entire treasury. This is not a “can’t be evil” situation—this is “don’t be evil,” just like in web2.

The blockchain is a single, transparent source of truth

You can’t fool the blockchain. No one can edit the blockchain retroactively, making it a source of truth for everyone in the organization.

Running operations on-chain means key decisions and transactions are all transparent. The entire history of the blockchain is viewable and searchable, therefore you can see the history of a DAO’s payments and asset changes.

This saves us from getting into the problem of not knowing how much money an exchange has, and then finding out later that they didn’t have enough! 

We believe organizations run better when more people have access to information. This is the “building in public” mindset that has made for a more composable, transparent ecosystem. 

Global, permissionless assets make for unstoppable organizations

On-chain DAOs have on-chain treasuries. That means they hold global, permissionless assets like Bitcoin, Ethereum, and stablecoins. They also might hold their own native token, if they chose to mint one!

This means that DAOs are unstoppable organizations, because their currencies are held by the DAO itself and exchanged directly between parties, outside of the control of intermediaries. It also makes it much easier to work with and pay DAO contributors from all over the world, because you don’t need to have different bank accounts with different currencies all over the globe.

On-chain incentive alignment can reduce coordination failure

DAO smart contracts, and the on-chain incentive alignment that come with them in the form of tokens, are designed to reduce coordination failure. That means it’s supposed to help people make decisions and act collectively as a group. 

When we say incentive alignment, we mean that the DAO members are incentivized to act in a way that furthers their shared goals. When DAO members all hold the same on-chain asset, the DAO’s native token, they’re incentivized to act in ways that sustain the token’s value. Their on-chain incentive alignment—meaning the shared token—means they are more likely to coordinate to help the DAO succeed at its mission.

The fact that all of this is baked into immutable smart contracts is also important in reducing coordination failure. No one can tamper with the contracts or change settings on their own. There’s no single person who holds the entire treasury—members hold it collectively—and any changes can only be made by reaching of certain level of consent

We have the data to prove that centralized custodians can’t be trusted (unfortunately, too much data)

We’ve seen time and time again that centralized parties fail to keep your crypto safe. This is an unfortunate fact of the centralized side of the crypto industry. It’s all too common for centralized players to fail and take their user’s assets down with them.

When you rely on an exchange to custody your assets for you, you’re putting your money into nothing more than an unregulated bank. 

From FTX and Celsius in 2022 to Mt. Gox all the way back in 2014, centralized exchanges failing is all too common in crypto. The best way to protect yourself against centralized failure is to hold your crypto assets yourself and govern shared assets on-chain with smart contracts at the center of incentive alignment and decision making. You might’ve heard the phrase “not your keys, not your crypto” and unfortunately it’s all too true.

🦅 Our mission to build unstoppable organizations has only been strengthened in recent weeks. Join us by subscribing to this newsletter and learning more about how to get involved.

Aragon 🦅 @AragonProject

The sudden implosion of FTX is frustrating and heartbreaking. Our thoughts are with everyone affected by it. Now more than ever, it’s critical to defend and educate the public on the values and promises that underpin web3. More thoughts 👇

Votes

No votes this week.

Proposals

Rules: technical deployment and legal wrappers (overview of last week’s Friday Social)

• The default governance model is intentionally minimal to foster experimentation on the social layer and to give teams as much autonomy as possible to deliver impact.

• Basics of submitting proposals, voting, and the veto option for security.

• The charter will be a plain English translation of the technical deployment and legal wrappers, prioritizing technical accuracy and accessibility.

• Legal wrappers still a work in progress

• Add questions as a comment in the forum.

Updating Aragon’s DEX Strategy

• Due to recent market conditions, it is relevant for Aragon to become more independent and increase the DEX liquidity position of ANT. Aragon should control its own liquidity, rather than relying on centralized liquidity providers.

• The AA Finance team proposes to update the outdated Aragon DEX strategy by updating the current Balancer pools.

• The objective of this proposal is to have at least 4% of ANT trading executed on DEXs.

• The finance team seeks to test the hypothesis that increased liquidity will lead to increased use of DEXs that support Aragon’s vision.

Network Highlights

Treasury update: In light of recent market events, we want to reiterate that our treasury is transparent and on-chain. You can check the current on-chain holdings in the Aragon treasury here.

Read up on the exciting work the Aragon ZK Research team is doing:

Aragon 🦅 @AragonProject

We’re excited to announce that @arnaucube & Artem Grigor from our @aragon_zk Research team will be speaking at @ethdevbcn! 🗓 Save the date, Friday, Nov 18th 2022, 18:30 at @AKASHAworldBCN.

We’re a proud sponsor of ETH Gathering Barcelona, where the ZK Research team and Harry Wilson (product marketing) are speaking. You can find the schedule here.

ethgathering @ethgathering

📣Announcement📣New Speaker⚡️ | Harry Wilson @_harrywilson from @AragonProject will be sharing insights and knowledge @ethgathering in Barcelona⚡️November 19th-20th 2022⚡️ Tickets -> buff.ly/3DxcXvq #ethgathering

ethgathering @ethgathering

📣Announcement📣New Sponsor⚡️ | Aragon @AragonProject will be sponsoring @ethgathering in Barcelona⚡️November 19th-20th 2022⚡️Just a few more days until Gathering Week starts... Decentralized teams, see you there! 👀 Tickets -> buff.ly/3RZ8Vke

Features of our DAO Expert, General Magic:

Aragon 🦅 @AragonProject

Want to build a public good on Ethereum but need help on the technical implementation? Looking for a full-service solution to all the needs your Impact DAO has? Meet @Generalmagicio, making ✨ magic ✨ happen for impact DAOs at any stage 👇🧵

Aragon 🦅 @AragonProject

No matter the stage of building your Impact DAO, @Generalmagicio can help you take it to the next level! Join our AMA on Friday, 3:30pm UTC to learn how they build and grow public goods projects. 🪄 Set a reminder here: https://t.co/M247OCXMfd

We launched a beginner-friendly overview of setting your DAO governance in 8 quick steps:

Aragon 🦅 @AragonProject

When you set DAO governance, you define who can make decisions and how. This should evolve as your DAO grows. ⚖️ It can seem daunting, but we're here to help you make informed choices. Our new guide breaks it down into 8 easy steps 👇 aragon.org/how-to/set-up-…

aragon.orgSet up your DAO Governance in 8 stepsDAO governance is all about decision-making. When you set DAO governance, you define who can make decisions and how. Governance can be as simple as three out of five people voting “yes” for an idea or as complex as an entire network state of individuals voting on huge decisions.

Events

First in our developer series AMAs, Juliette (Developer Advocate) will interview Carlos (VP of Engineering) diving into the details of the new Aragon protocol.

Friday, November 25 at 3:30 pm UTC on Twitter Spaces. Set a reminder here.

CTAs

• The Aragon treasury is on-chain and transparent. We continue to have a large runway to build our products—view it here.

• Set a reminder for the first in our Developer Series on November 25 at 3:30pm UTC.

• Learn about our DAO Expert General Magic.

• Read our overview of setting your DAO governance in 8 steps.

• Take a moment to reflect on why you’re here and what your values are in web3!

Have a great weekend!

—the Comms team