The Multi-Token Framework for Any Optimal DAO
Incentives for DAO governance are severely misaligned
The Principal-Agent is breaking decentralized organizations and that needs to be addressed immediately.
The Optimal DAO concept, proposed by Costin Oarda, aims to address this.
The perfect formula for DAO creation 👇👇👇
By using a multi-token ecosystem, it will balance fair value exchange, user empowerment, and operational efficiency.
Costin suggests that Optimal DAO should have four distinct tokens:
OPTIU (Usage Token)
OPTIB (Board Token)
OPTIG (Governance Token)
OPTIM (Economic Token)
Each serves a unique purpose in the ecosystem and here is what each of them represents:
OPTIU: The non-transferable, non-burnable NFT usage token. It acts as a usage indicator and grants specific rights to token holders. With an uncapped, non-decreasing supply, OPTIU puts users at the center of the DAO's operations.
OPTIB: The transferable, non-burnable NFT board token. Allocated to board members, it enables agile execution of operational decisions and provides protection during critical events. Its constant supply and transferability (subject to governance vote) balance agility and decentralization.
OPTIG: The non-transferable, burnable voting token used for strategic decisions. Each OPTIU and OPTIB grants access to an OPTIG. Initially equal to OPTIB supply, OPTIG distribution through usage gradually shifts power from the board to users, ensuring long-term decentralization.
OPTIM: The DAO's economic token, facilitating value exchange within the ecosystem.
This multi-token approach addresses pain points in traditional DAO structures, being:
1. Informational Asymmetry: By linking governance power (OPTIG) to usage (OPTIU), the system incentivizes active participation and reduces the gap between decision-makers and users.
2. Centralization vs. Decentralization: The OPTIB and OPTIG dynamic allows for agile, centralized decision-making early on, gradually transitioning to full decentralization as the user base grows.
3. User Empowerment: OPTIU ensures that active users have a say in the DAO's governance, fostering a sense of ownership and alignment of interests.
4. Operational Efficiency: OPTIB allows for quick decision-making by the board when needed, while the gradual shift of power through OPTIG distribution ensures long-term user control.
The Optimal DAO model represents a significant step forward in addressing the challenges faced by decentralized organizations.
By carefully balancing the needs of users, board members, and the overall ecosystem, it paves the way for more equitable and efficient DAOs.
As we continue to explore and refine decentralized governance models, the Optimal DAO concept offers valuable insights into how we can create more resilient, fair, and user-centric organizations in the Web3 era.
For those interested in diving deeper into the Optimal DAO concept, I recommend reading Costin Oarda's original paper, which provides a comprehensive analysis of the model and its potential implications for the future of decentralized governance.
And in my previous article, I talked about some problems of DAO governance: https://x.com/arndxt_xo/status/1818118190725316795
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