Nothing has ever excited former Polychain partner and Web3 Foundation executive Ryan Zurrer like The DAO – the 2016 project whose eventual loss of millions of dollars in ETH caused a fork of the ethereum blockchain.
In fact, Zurrer believes in the concept so much, he’s leaving the Web3 Foundation in order to take another shot at creating a big, for-profit, decentralized company that (at least for now) will also be called The DAO.
“With the success of the DOT sale, the success of the Web3 Summit and the Web3 Foundation in a strong position organizationally, it’s an appropriate time to step away. I will migrate and go back to what my primary passion is – deploying capital and helping early-stage teams build new concepts in the space,” Zurrer told CoinDesk in a statement.
The Web3 Foundation confirmed his departure to CoinDesk, telling CoinDesk that it is not involved with the new DAO project.
Zurrer said that further announcements about those partnering with him will be made at the Web3 Summit later this month.
A decentralized autonomous organization (DAO) is able to function without a specific CEO or leader because its rules are enforced by code that governs all of its operations. The idea of the original DAO was that people could contribute funds to the DAO in exchange for voting tokens. They would then use those tokens to decide how to invest the shared pool of funds.
“The original DAO was a clean, pseudonymous capital pool,” Zurrer told CoinDesk in a phone call, emphasizing its design such that participants could get in and get out of their investment at any time.
Said Zurrer:
“This is the closest attempt we’ve seen anywhere in the space to the ideals of that original DAO.”
New model
Zurrer shared a draft of the new DAO’s white paper, currently posted on his GitHub page.
Those who join the DAO will be given DAO tokens. In order to simplify governance, they will only be asked to vote under intervals called “mandates,” after a set of projects have been determined by underlying leagues, described below. The white paper defines a number of principles that will govern its operations, such as clean capital, value creation and security.
One key innovation of the new version of the DAO appears to be that it builds in a variety of checks and balances into the new system. Any expenditures made under the new DAO will require sign off by three groups in its multi-signature architecture.
The three groups (called “leagues”) are divided into venture, treasury, dev and compliance. Venture manages deal flow and vetting of potential investments.
Treasury is responsible for the DAO’s portfolio of investments, depending on which assets it accepts as contributions (such as ETH, WBTC and ERC-20 tokens).
Compliance verifies that all decisions made by the other two are correct and align with the DAO’s principles. It will also narrow down proposals before they are presented to all token holders for a final vote.
Bearing in mind the U.S. Securities and Exchange Commission’s specific evaluation of The DAO following its unraveling, the white paper specifically addresses the issue of regulatory compliance:
“At the time of conceptualizing the DAO, most of the authors of this specification are optimistic that work can be done by a well-intentioned competent Compliance League to achieve reasonable compliance without sacrificing the principles above, namely that the DAO remains a ‘clean capital’ pool that participants can freely enter into and leave from reasonably without discrimination.”
Dev is another league, not a signatory to expenditures, but it would provide due diligence on acquisitions, build out tools for all projects to use and update the DAO’s architecture.
The white paper also presents a league called the “original guild,” which serves as a sort of backstop against bad actors, with power only to freeze the DAO if deemed necessary.
Updated technology
The new version of the DAO draws on work from Aragon, such as its new iteration on the DAICO concept for fundraising, and work by Protocol Labs, tracking contributions made by distributed participants.
Zurrer said, “It uses a bunch of kind of new and elegant mechanism design that we are pretty excited about.”
While he hopes to be able to announce participation by other organizations soon, he noted that many are likely to remain anonymous. “One of us had to make the announcement though and since I’ve been involved with the genesis of this DAO, I’m taking it,” he said.
The white paper concludes:
“We find the dream of a sustainable decentralized organization that attracts and filters for great talent, supports genuine innovation and meaningful experimentation, and delivers outlier value to its members to be so prescient that we are compelled to forge ahead with development and eventual deployment because this is the most interesting project we can imagine to be a member of.”
Ryan Zurrer image via CoinDesk archives