You're reading State of the DAOs, the high-signal low-noise newsletter for understanding DAOs.
Anyone who has spent time deeply immersed in DAOs certainly knows that efficient and impactful capital allocation is one of the greatest challenges these organizations face. During the long bull run, there was little focus on smart treasury management, but as the bear market continues to keep crypto in hibernation (with signs of spring abounding!), DAOs must rethink their funding models.
Among the issues with current models are that there is little flexibility as to how proposals are submitted and reviewed, reviewers don’t tend to be subject-matter experts, and funding workstreams are often a DAO’s most centralized point of administration and can be rigid in the application of their rules and policies.
These funding practices can make it challenging for those tasked with funding projects, and stressful for project leaders who just want to launch an initiative they believe can benefit the community. DAOs need a way to allocate capital to projects that is both efficient and responsive to the needs of builders and the community, and that’s why Gitcoin built Allo.
Allo is an on-chain platform that allows DAOs to run a number of different types of grants rounds, from seed and seasonal rounds to Quantitative Funding and retroactive funding rounds. This week’s editorial, written by members of the Gitcoin team illustrates why Gitcoin believes that “[u]sing Allo to solve the problem of efficient allocation of a community’s capital will unlock contributor potential in ways no one can currently imagine, ensuring capital gets into the hands of the right builders.” 🥰
This week’s DAO Spotlight focuses on Rocket Pool Oracle DAO, a select group of Rocket Pool node operators who help manage the administrative functions of the decentralized staking protocol, and we conclude, as always, with a TL;DR on some of the most recent DAO ecosystem takes and thought pieces, making it easy for you to cut through the noise and learn everything you need to know about the current state of the DAOs.
Contributors: BanklessDAO Writers Guild (0xZakk, Azeem Khan, Boluwatife, Warrior, angelspeaks, Quilia, Vi-Fi, Tonytad, Kornekt, Trewkat, HiroKennelly, siddhearta)
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Game7 is excited to launch Summon, our novel DAO governance platform.
Summon is a community LiveOps tool that takes governance to the next level by making it easy for DAOs to measure the contributions of their members, and reward them in ways that go beyond money.
How it works: Each community member mints a Soulbound NFT that evolves as the member contributes to the community, making the NFT upgradeable and unique. As each contributor completes quests and tasks, they earn experience points (XP), which help them move up in rank and unlock features and rewards in real time.
By tracking, measuring, and rewarding contributions, Summon provides decision-making capabilities to those who invest time and effort into the community, as opposed to only those who contribute capital.
The result is a meritocratic governance model that distributes power and governing rights to the most productive members of the community.