Unchained - What Is It Like to Only Work for DAOs? Chase Chapman Tells All - Ep.330

Starting point is 00:00:00 Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto six years ago, and as a senior editor at Forbes, was the first mainstream media reporter to cover cryptocurrency full-time. This is the March 15th, 2022 episode of Unchained. Welcome to a new world of crypto-friendly banking with Cross River Bank. Request your Fiat-on-OffRamp solution now at crossriver.com slash crypto. Buy, earn, and spend crypto on the crypto.com app. New users can enjoy zero credit card fees on crypto purchases in the first 30 days. Download the crypto.com app and get $25 with the code Laura. Link in the description. This episode of Unchained is brought to you by Beefy Finance, the multi-chain yield optimizer.

Starting point is 00:00:59 Beefy is the easiest way to earn more from your crypto. Deposit funds into Beefy's secure vaults to auto-compound yield across 12 blockchains. Got crypto? Choose Beefy. Today's guest is Chase Chapman, Dow contributor. Welcome, Chase. I'm so excited to chat. Me too. So you have so many jobs in crypto and at various DAWS.

Starting point is 00:01:27 You're a co-founder and advisor. and advisor at Decentology, host of the On the Other Side podcast, and you're a contributor at Orca, Index Co-op, and Rabbit Hole. So why don't you unpack for the listeners what all that means and to sort of describe what your work life and crypto is like? Yes. So I kind of like to think about what I do as the Web 3 version of freelancing. So, you know, in the world of Web 2, you have people who, who do a few different things at a few different organizations.

Starting point is 00:02:03 And what I really love about Web3 is that you can do those things, but you can actually earn ownership and have governance rights in those organizations. And so that's kind of what I spend my time doing. So I do research at Orca Protocol, thinking about how we can implement Dow's in the real world, not just theoretical. And then I do some community stuff at Rapid Hole. I'm helping index think about inclusion within, the organization, and then I also have my podcast. So I spend a lot of time thinking about really

Starting point is 00:02:33 similar common threads around how humans engage in decentralized systems, but I get to do that across a lot of different contexts, which is really fun. Yeah, I have to say your podcast is definitely like very nerdy. It's like very much this kind of like abstract discussion. And I just feel like for true crypto geeks, like it's very fun and interesting. So I'm so curious, how did you even get into crypto in the first place. Well, I appreciate that. I think my, my podcast is definitely the nerdy governance niche, which is super fun. I first got into crypto because I was working in marketing doing data analytics. And we had all these challenges with the provenance and who owned data, like among different companies. And so, of course, blockchain at the time was like

Starting point is 00:03:22 this amazing solution to the problem. And this was a few years ago. And I was still in college and and sort of doing this while I was in college and really fell down the crypto rapid hole from there. So I got involved with She-256, had a mentor who I ultimately started a developer tooling company with. That company is decentology, so still doing really well. But when I graduated, I really got obsessed with Dow's and decided to take a little bit of a step back as a founder into more of an advisor role and then dive really deep into Dow's and the sort of human side of Web3. And it's definitely in different worlds from developer tooling, which has been really fun. And being able to focus on this human element has been really like fulfilling and rewarding. And so why don't you walk us through how it is that you came to have each of these different jobs.

Starting point is 00:04:15 Ooh, that's a fun one. So of course, Decentology, the company that I started, sort of step back into an advisory role, but still helping on some of the Dow pieces. in terms of index co-op, I actually met someone who was working full-time in index in Miami at Bitcoin Miami. And he was like, Chase, we really need more women in index. And we know it's a problem. And so I started just kind of collaborating with him and a few people who are already at index to think about not only how we could bring more women in, but also how we could really promote, not necessarily promote, support them, I guess, within the organization. And then we expanded

Starting point is 00:04:58 that out to include people who identifies female and non-binary and really try to use that as like this testing ground for how we can make these spaces more diverse and inclusive because you can't amplify collective intelligence with homogenous groups. That's sort of the thesis. So got involved there and then kept up that initiative and really like started growing that. And then with Rabbit Hole, I actually worked with Brian, who's a CEO when he was at Dapper Labs, when I was at Decentology, because there's a partnership there. And so sort of stayed friends with him when he left and started Rabbit Hole and had always been really excited about their vision and mission and started working on a few community things and have continued doing that. And then with Orgo Protocol,

Starting point is 00:05:45 which I absolutely became like a fan girl of before I ever got involved with working with them, But as I dove deeper into Daos, it really felt like there was this piece that every DAO had in common, which was this notion of working groups or circles or pods. And even when I looked back at sociocracy and co-ops and all of these different more decentralized organizing mechanisms that came before Daos, they all have really similar primitives around what does it look like for a group of people with a specific focus within a decentralized organization to align on goals. and work together. And so I became obsessed with Orca and ultimately was able to take a lot of the research that I was doing around co-ops and sociocracy and things and pull that into Orca and start really testing some of these things that I've been researching. So that was really fun. And then the podcast was something that I always give Brian Flynn again from Rabbit Hole Credit because he was like, Chase, you have to start a podcast. You love chatting. And so I started that and have continued

Starting point is 00:06:52 that forward. I was going to ask you something about this later in the show, but since you brought it up right away, I'm so curious. You talked about how there aren't that many women in crypto or Web 3. How have you been trying to get more women involved at Index Co-op? And in general, like, how do you think the crypto space can go about doing that? I think there are two interesting things happening. The first is that I think we have women, we have people of color. We have, like, you people. who I think for the last couple of years in crypto definitely have not been represented coming into the space in a lot larger numbers. I think the challenge becomes how do you support and empower and if they want, make them visible because I think a lot of times, particularly in Dow's,

Starting point is 00:07:39 like when you think about what it means to become a contributor, it means you kind of have to put yourself out there and you don't know if people actually want any of the things that you're working on half of the time, which is kind of a challenge without onboarding more broadly. But a lot of times it kind of feels like a job interview. And we know from data that a lot of these types of groups, whether it be women or people of color, tend to like not apply to as many jobs because the way that they're socialized, you know, or at least jobs where they don't meet every single requirement. And so when you look at just the systemic reasons that people don't get involved in things, it's a lot deeper than just like, oh, hey, you know, get your girlfriend into crypto.

Starting point is 00:08:21 It's really about thinking about what are all the factors at play. How can we make it a safer space? And so I think a big part of that is just visibility. Something that we've noticed with Index is that talking about inclusion isn't necessarily the only or best way even to bring more people into the space. A lot of it is actually just how can we put women and non-binary people and people of color and other groups that maybe you don't see as much in crypto from like a visibility perspective in the spotlight and talking about, you know, how Dow's organized.

Starting point is 00:08:55 And that doesn't mean making sure that every single time you talk about inclusion. It's an important conversation. But it's one that we've learned is, you know, you can beat the drum so many times. But it's a lot more about actually putting people into the spotlight. So that's been a really big thing. And then also creating spaces where people can feel supported. I think She-256 is a perfect example of this. I am not sure that I would have been able to go as deep down the crypto rabbit hole as I had

Starting point is 00:09:21 without them. So for anyone who isn't familiar, they're an organization that basically matches women who want to get more involved in the space with mentors. And so I think creating spaces where you have this like support structure is also really important. Yeah. One other thing that I wanted to ask you about is that when I did a show about how syndicate Dow is launching these Web 3 investment clubs, they said that half of their launch cohort

Starting point is 00:09:50 were either all women or women led Dow's. And when I asked them how that happened, the co-founder Ian Lee said that actually, you know, they hadn't intended it, which is sort of natural out of like mission and values alignment. And I wondered in general if you have, if you agree that sort of like Dow's in general are kind of like a good avenue for bringing more women into crypto or if you feel that the kind of values of dao sort of align better with the values that women tend to have? Hmm. That's a really interesting question. From my totally anecdotal experience, I think I don't know about Dow's more broadly or NFTs more broadly. I have a gut feeling that they're probably a little bit less intimidating because they acknowledge existing skills that already, they're not Web 3 specific. And I do

Starting point is 00:10:43 think that if you look at crypto, I mean, you know over the past many years, like, it is definitely predominantly men. And so I think, and new. And like when I say men, there's like a very specific demographic of men. And, and I think that when we think about like all of these other skills, the DAOs and NFTs actually are starting to bring in, I do think that there's something to be said for just like the demographics of those groups. The other thing that I think that's interesting is, a lot of the people that I know who are doing like community management are not like cis white men. And I think there's probably something to that. I don't want to speak like generally about everyone,

Starting point is 00:11:26 but I do think that there's, in my experience, more like women or people who are coming into those roles who definitely don't look like the very sort of standard crypto bro that I think people imagine. Okay. Yeah, maybe we can talk more about that later, but I also then actually just wanted to circle back on your history of work because I was also so curious when I was looking at, you know, your resume or CV or whatever you want to call it. Before you ended up in this line of work, working for Dow's, what did you think you were going to do for a living? Well, before Dow's, I definitely was like full on going to be a crypto founder. I don't think I ever would have left. crypto. Before crypto, though, I thought I was going to go into, yeah, like, consulting or investment banking, probably. I was in business school. That's what all my friends ended up doing. I probably would have tried to go into private equity, longer term. I like to, if I'm not doing something that's like being a founder or a Dow contributor, I think I would have not done well in a corporate

Starting point is 00:12:37 system because I totally would have been like obsessed with climbing a ladder that got me nowhere, basically. Okay. Well, so since you sort of like veered off in a very different direction, I'm curious how you think DAOs are either changing the nature of work or will change the nature of work? I think there are two broad trends that are going on in my mind when we think about what the future of work looks like and where DAO's fit within it. The first is this general trend over the past couple of decades where you've seen a lot of organizations. You've seen a lot of organization, Zappos very famously spearheaded this, move towards a more flat structure. So, you know, you have like the 50s and 60s and 70s where you have a lot more hierarchical

Starting point is 00:13:24 corporate structures. Everybody has a boss and there are all of these systems that look very, like, rigid. And I think what we've seen is this movement towards teal and flat organizations where employees are empowered to make decisions because ultimately people have realized that having a boss tell everyone what to do across a large domain of different things really doesn't make that much sense. And it's not actually the best way to run a business. You can only create so much flexibility and resiliency with a model like that. And so I think that's sort of the first trend. And then the second trend is what COVID brought about, which was this massive movement towards rethinking work, whether that be where you work, like being remote, or what it means

Starting point is 00:14:09 to be an employee of an organization in the first place. So the great resignation and all of these things, I think really force people to rethink this concept that we have as a society of what work could look like. And I think Dow's became this really interesting example of moving towards self-management and autonomy and having real ownership that is completely remote work, that's totally flexible. And so I think of course, like what those things actually mean in practice can be a little bit different. Like, there isn't complete flexibility, I don't think, at least not when Dow's scale. There's still going to be some things that stay from what we've already seen in corporations and more traditional companies.

Starting point is 00:14:56 But I do think that when we look at where things are going, it's a lot more towards, quote unquote, employee, now Dow contributor, basically, autonomy, and towards thinking about a lot more flexible way of engaging with labor and actually being able to earn ownership while you do it. And then how do you think that intersects with what people are calling the passion economy or the creator economy? I just talked with Yancey Strickler, who I'm a really big fan of, who's working on a project called MetaLabel about this. And he has this notion that, you know, everyone talks about, at least in the Western Hemisphere, how we've moved towards. individualism and this idea that, you know, you used to go to church and all these things and now we're much more focused on ourselves. I actually think, and now he has this notion of a post individualist society where we can choose to engage in different types of work that we personally

Starting point is 00:15:56 align with. And so I think we're moving a lot more towards, okay, you have this like individual individual decision to now become part of a collective. And to me, that's really like the next iteration, and this is kind of Yancey's point, of the passion and creator economy, where to be honest, like, it's lonely to be a creator. But it's much more interesting when you can align with other people and co-create in a way that feels flexible, but also like you actually own it. So I actually think the DAOs are the next evolution of making the creator economy a little bit more about the collective while also acknowledging individual autonomy and values. I love that.

Starting point is 00:16:40 That's super interesting. Okay, so I have some sort of nosy questions for you. How do you get paid and how is it determined how much you get paid? I get paid in a lot of different ways, which is the fun part of this. So there are a few different ways. One of them is in tokens that are effectively like governance tokens from Dow. So for index, for example, I'm paid in index tokens. I personally hold those tokens. Some people who are paid in those tokens sell them right away. It depends on if you have, you know, rent that you need to

Starting point is 00:17:14 pay with those tokens. For other organizations like ORCA, I'm on their like core team as a researcher. And so I'm paid just like any other job in Fiat. I'm sure that if I wanted to get paid in like staple coins I probably could. But that's a lot more traditional. And is that like a W2 type situation or a 1099? So currently it's a W2, but I'm probably going to change it to a 1099 because I I'm figuring out exactly what the best legal structure is based on how I actually like work. And we're still figuring out where I sit with an ORCA because again, it's like one of those things where I'm a researcher, but I'm engaging a lot with their. Dow. And I think that speaks to probably the organizational design best practices still being

Starting point is 00:18:08 figured out. But when we think about how those things are set, that's where things get interesting. Every single job that I have has a different compensation structure or way that it was decided upon for the most part. For something like Orca, it was a lot more of a traditional process where, you know, they approach me or I approach them with like a number and then we sort of settle on it. But for index, for example, I've gone through quite a few iterations of how I'm paid. So one of them was index would have everyone submit a spreadsheet of what you did if you're not a core contributor on a salary, which was the case for me. I was not a core contributor on a salary. And then they had like a group of people who sort of decided what they felt the value was based on looking at everyone's contributions.

Starting point is 00:18:58 If you didn't agree with it, you could like appeal it and come to a decision. They've moved away a little bit from that system and gotten more specific to the groups of people you're working in. So now we use coordinate, which is a tool that allows people to within a group allocate salaries to each other based on who you work with and how much value you think they provided. So now most of my compensation at index is based on a coordinate circle. people who are core contributors and salary don't participate in that. It's mostly for people who either are like contributors who are sort of part-time or a little bit less consistent. I'll also note that like I don't do this, but other ways that I've seen DAOs use this type of tool is you have a base salary and then you use something like coordinate on top of it as more of a bonus type system. So there are a lot of different ways that other DAOs have done this, but that's my general way that I'm paid across different orgs.

Starting point is 00:20:03 And now that your peers are basically deciding how much you're being paid, do you feel, and so hopefully you don't mind revealing, do you feel that it's fair? And like, did the compensation change in a way, you know, from how it was, you know, did it change a lot after, you know, they switched that model? It didn't change a lot. It was pretty consistent. I know that for me, it felt fair, but I also don't rely exclusively on that for income. So I think, you know, I'm kind of much more accepting, I think, of whatever people think, makes sense. That's also not a large part of my income in general, like just based on how the amount of work that I do with index, for example. And so I think I would probably feel much more

Starting point is 00:20:59 strongly if it was like a large percentage of my income. I will say, I think the people who I know who have used this type of system in the past, it requires a really high degree of trust and honesty with one another, because one of the most important elements of this, and Zach from court tape always says this, is feedback alongside the allocation. So when before he was at Courtney, when he used this in his consulting company, what they would do is they would say, okay, here's our pot of money. Let's, you know, all four or five of us get together in a room and decide how to split this up and have an open and honest conversation about it. And so I think what's really valuable is the conversations that it brings about. And again, I think I would I would probably feel much more strongly about the actual number if it was a really large part of my income.

Starting point is 00:21:51 So oftentimes compensation at like a traditional company would factor in cost of living in terms of where the company is located. So let's say that in one of these DAOs you have two different people in the same role, but one of them lives in New York City and the other lives in Cleveland, which is where I'm from. So, you know, hopefully nobody from Cleveland will be offended by this. But then would that factor in or would they be paid the same or how does that part work? Something that's really interesting about every conversation I've ever had about compensation is it comes down to values and agreeing on those values and then having compensation pull those through and be a manifestation of those things. So I think every DAO is going to have a different approach to this, but I think what it should reflect is a decision whether or not to change comp based on where you live. So if one of the values that you have, which, by the way, I think should be articulated by every Dow, I think a lot of DAOs don't do this today. But I think having a core set of values and agreements is one of the most important things that you can do from an organizational design perspective.

Starting point is 00:22:59 But if Index said, one of our core values is that everyone is paid equally. And if you are a contributor to this organization, you consent to that value, then everyone should be paid equally regardless of where they live. If one of the core values is that we acknowledge that different areas cost different amounts, then that's what should happen. But I think a lot of it is about making those decisions and then making sure that those are explicitly stated so that when people do come into a system, they know what the underlying values are going to be and they can decide whether or not they want to be there or, you know, go somewhere else. And so for your taxes, is it that you have that one W2 and then everything else is a 1099? Yes, currently. I'm working through exactly what the best strategy is. I'm also very lucky because I'm under 26 and my parents have health insurance, so I get to be on their health insurance. I was going to ask you about health insurance, but okay, you're under 26. All right.

Starting point is 00:23:57 But I know a lot of people who use like Opelis, if you're in the U.S., which is a collective that's allowing Dow workers to come together and essentially purchase group health insurance and then you run it through. And I think it's an analysis. I use Opolis, but I'm like, I'm like, like a sole proprietor. No, no, I'm not. I'm an LLC. Sorry, I'm an LLC, but I still use Opelis. But anyway.

Starting point is 00:24:21 Yeah, but so I think there are lots of different solutions. What I know a lot of people do is have like an S-Corp status and then run things through that. But I definitely am still figuring out what the best approach is. I think most people are because the other thing that comes up when you think about taxes is actually, if you're like me and you are paid an index. tokens and you haven't sold those tokens, you have to consider what is the income that you're, that you actually have because it could be, and I think just like the basic sort of standard

Starting point is 00:24:59 approach to this is your income is the price of the token when you get it. But there are also private rounds happening for these tokens, typically with like VC funds. And so the question becomes, is that actually the price or is it the price of at the time you get it. And there are all these different questions around what that actually looks like and how you treat those things. And I think we're very much still in the early stages of figuring out what the tax implications are for Dow contributors who are being paid in governance tokens.

Starting point is 00:25:29 I bet your accountant just loves you. I have two accountants and I think they both dread calls with me. Okay. So I want to get into some of the nerdyer things that you like covering your part. podcast. So you tweeted, stop using the terms decentralized protocols, permissionless networks, and start using self-managing organizations, sociocracy, which, by the way, you have to define that, and co-ops. And then you wrote, the human layer requires different mental models than the computational layer. So unpack all that. And please define sociocracy. So my definition of

Starting point is 00:26:07 sociocracy is definitely not going to be correct. But the way the sociocracy, from my understanding of it, is effectively organizations that use consent-based governance and circles to organize in a decentralized fashion. And there's like this whole evolution of organizational design thinking that got to this point, which is why I'm such a big fan of, like, looking at it. And I am definitely not an org design historian by any means. But it's effectively a means of decentralized organization that leverages these smaller groups. That being said, the reason that I think about things like sociocracy and self-managing orgs is when we look at the way that people currently talk about DAOs, a lot of it borrows from the terminology and phrasing.

Starting point is 00:27:04 and design mechanisms that protocols use. So Bitcoin as a protocol, for example, is maximizing for the most part for decentralization. It's generally permissionless. Like if you have the hardware, you can run a node. And so you have these different nodes that are all doing work to secure the network, and they are rewarded for it, hopefully. But I think the challenge with doing that in the Dowie,

Starting point is 00:27:34 ecosystem and pulling all of that terminology and thinking over is that humans are not like nodes in the Bitcoin network. Humans have a lot more complexity when you think about the types of work that they provide to the quote unquote network, which is like the organization. So you don't have Bitcoin nodes that specialize in social media marketing. And I think that's where you have a lot more complexity when we start to think about the mental models that we need to be using for DAOs. And I'm not saying like protocols are not useful mental models, but they have their limits, just like any other mental model. And I think we overindex on them as opposed to thinking more about this trend that I was talking about earlier towards self-management, where you have

Starting point is 00:28:20 pulling from, you know, flat organizations and sociocracy and all these different things to actually think about how humans organize, which is a lot more in these smaller circles of people. where you have decision-making that is decentralized, but the reason that it's decentralized is because you only have like six people as opposed to trying to get an entire network to agree, which works when you have mathematical proofs, but not when you have human beings, because there's no right answer with human beings. So that's why I say we should move away from computational models only and towards more of these human-centric models. And something that was interesting was you retweeted a tweet by Jake Chirvinsky of the

Starting point is 00:29:02 blockchain association where he said that he feels like DAOs are sort of like relearning why it is that corporations exist. And you seem to kind of plus one that. So what is it that you think Dow should be taking from corporate structures? I think corporations have gotten a lot of things wrong and a lot of things right. I think hierarchical systems and pulling from having someone like a CEO that has a lot of generalized power over lots of different domains is not a pattern that we should be recreating. But I think very specific hierarchies of, for example, within a small circle of people, someone who knows Twitter really, really well and kind of has the consent of the people in that circle to say, hey, yeah, you own Twitter, that's a win.

Starting point is 00:29:53 And so I think having these types of hierarchies and specialized. expertise, like recognizing people with specialized opportunities, not opportunities. Expertise is really, really important. So I think from that perspective, corporations get a lot of things right. I think we're definitely still experimenting with what HR looks like in organizations. I will say I was very much of the opinion that things like HR need to exist in DOWs. And I still think we need to consider them, but I have had my mind. changed over the past couple of months to move towards this notion that HR needs to be a lot more

Starting point is 00:30:34 localized. And so we, instead of having a single department that we outsource all of our people problems too, instead we need to be thinking more about how do we equip people within our organization with the tools that they need to navigate conversations around compensation and conversations around conflict resolution. So I think that there are a lot of functions and some structures that we can borrow from corporations, but I think that there are a lot of like modifiers on almost every one of those. And that's, I think, exactly why what Jake was saying makes a lot of sense to me in some ways, where we need to experiment and figure out what does need to be brought over from corporations. And I think that's very healthy to do and what we can leave behind. And if we don't try things,

Starting point is 00:31:22 we're never going to to know. All right. So in a moment, we're going to talk about how some of these abstract principles apply in the real world of Dow's, but first a quick word from the sponsors who make this show possible. Join over 10 million people using crypto.com, the easiest place to buy, earn, and spend over 150 cryptocurrencies. New users enjoy zero credit card fees on crypto purchases in their first 30 days. With crypto.com earn, you can get industry-leading interest rates of up to 8.5% on over 40 coins, including Bitcoin and earn up to 14% on stablecoins.

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Starting point is 00:34:09 I think some people question, like why should A16Z be investing in Friends with Benefits, which is a social club? So in general, how do you see VCs in terms of their participation in Dow's, especially since, you know, obviously they tend to have huge allocations of tokens which can affect voting. I don't quite know yet. This gets into something that I'm personally thinking a lot about, which is this question of how do we think about the role and authority that token holders have in relation to the role and authority that contributors have?

Starting point is 00:34:51 And I think that's really what this gets down. down to, whether it's a VC or a whale, they hold tokens that now give them power to govern an organization that they might not be contributing to or actively helping run. And so I think it gets into this question of how do you make decisions as an organization? What we have definitely learned is that having token holders vote on everything is definitely not a mechanism that works well. even sushi trying to get token holders to approve compensation packages, which became a very big debate, feels like a very good example of why this doesn't work. So the question becomes, okay, how do you delegate power and decision-making authority to different people within an organization

Starting point is 00:35:40 so that they have the ability to make these decisions and you don't have to ask token holders every time? And so my current thinking, which is not fully evolved on this, so it's kind of half-baked, is potentially having token holders and contributors, choose who to delegate different responsibilities and roles to, and very specifically defining and consenting to their scope of authority. So that, again, it's not that you have a CEO or even a CMO, for example, who can make these. calls across so many different things, but instead you say, this is the right person to make decisions for maybe social. If you're a small Dow, if you're a really big Dow, maybe it's like Twitter and something else. And so I think a lot of it comes down to kind of this representative democracy type thing, but with very tight scope, as opposed to having this either every token holder votes on everything, which I think is why we have voter apathy and all these things.

Starting point is 00:36:46 or saying, okay, we're going to put a CEO into place, which I think also doesn't work well. Yeah, I actually want to kind of apply this discussion to the recent vote on whether Brantley Milligan of Ethereum Name Service should have remained a director of the foundation. And you may know, so the results ended up being that 43% were against his removal, meaning they wanted to keep him, 37 or 38% were for his removal, and then 19% abstained. But Brantley himself actually participated in the vote. So what were your kind of takes on everything that went down and how it could have gone better? So, yeah, Brantley participated in the vote with an amount of shares that changed the vote itself.

Starting point is 00:37:34 I think it's worth, like, pointing out the reason that he stayed if he had not voted, if he had abstained, he wouldn't be. The vote would not have gone the way that it did. I have really mixed feelings about this. So my own personal perspective on the entire thing that went down aside, I think what it highlighted to me was that organizations, again, have to articulate very clear values so that it doesn't become a question of should this person stay in power? It becomes a question of, did this person go against one of our core principles that we, we expect every single community steward to abide by. And if the answer to that is no, then it becomes simple because you're not voting on should this person stay. You're voting on did this person break the agreed upon consented principles? So I think like from that perspective, I think that's how we could have avoided a lot of

Starting point is 00:38:39 what is currently going on. And one of the important things there is saying if inclusivity. is a very core principle, and do you expect your community stewards to uphold that principle, which very explicitly can mean not making the type of comments that Brantley made, then it just becomes a question of like,

Starting point is 00:39:01 did you do it? And when people come into that community who are much more on the other side where they say, this type of speech shouldn't affect whether or not someone holds this position, if the community has that value, that means that you probably shouldn't be

Starting point is 00:39:15 in that community. Or if you want to be there, that's okay, but you consent to this rule that you basically don't agree with, but you acknowledge that's how we're going to govern. And so I think like the ability to have people consent to or choose to exit because we know that this is how we govern is really, really important. More broadly, I think there's a question around delegation here. I think, again, if there was a rule that said, hey, if we're voting on the removal of someone who is, you know, part of our case. community who has delegated votes, they're not allowed to participate in that vote. That would have been a helpful principle to have. So I think a lot of this comes down to values at the end of the day, like if you don't have

Starting point is 00:39:58 those defined and if we can't, at least in response to things like this, define them, then we're going to have more and more of these types of conversations. And so ultimately, I think it comes down to deciding on those things. And if you don't care about, you know, inclusivity or you don't think that that's part of what building an inclusive culture means, then people who do not agree with that won't enter your community. And I think that hopefully longer term, things like forking become easier. I think E&S is in a really different situation because they've built an identity system, which Brantley has famously talked about is not easily forkable. So I think there's probably a broader discussion there

Starting point is 00:40:39 to talk about what is the responsibility of people who are building a system that isn't really as easily forked and how does that change those types of principles. But yeah, I think a lot of it comes down to articulating values. And earlier when you were talking about how you felt like in a Dow kind of system, it would make more sense to have many different little pockets of HR or however, you know, those were my words. But so in the case of something like Brantley where, you know, he was a leader, obviously, but he had these views that, you know, probably. would have made it uncomfortable, at least, for different people to work for him. Like, how do you imagine that in an ideal world that that would work in terms of the HR around that?

Starting point is 00:41:26 I think that there are two different types of like what HR really looks like. The first is, you know, conflict resolution. Laura, you and I have some disagreement and you think that I'm being a really bad person to you and making work really uncomfortable. But no one else really feels that way. And I might have been given that position or people might have consented to me making decisions, but I'm in a role that is very specific.

Starting point is 00:41:56 I think that's one type of conflict resolution and working through that. I think having people who are more broadly community stewards and speak on behalf of an organization, I do think that they have a, little bit of a different level of trust that's required. And so I think sometimes those types of things go beyond like HR in the sense of almost peer to peer and a little bit more of a conversation that pulls in things like brand, but also things like community because you are shaping culture

Starting point is 00:42:31 by having people who speak that way and saying, yes, we're okay with those people continuing to be community stewards. Again, like my views aside, I think there are larger implications of how many different things you're impacting as someone is sort of more exposed to larger groups of people and has more trust of those people to speak on behalf of the organization, which I think you could definitely say pretty objectively, Brantley spoke on behalf of E&S in a lot of cases. And so I think that becomes a little bit of a different type of decision. And so obviously, you know, we talked about how for Brantley, it kind of was a conflict for him to have voted. But in general, there are a lot of systems where whales have a lot of influence.

Starting point is 00:43:20 And so in that sense, like, DAOs can become kind of like oligarchies. So what do you see as the best way to mitigate that? I think this comes back again to the question of what is the role of token holders and contributors and how do we think about governance? I think Index has done some really interesting experimenting around how to make it so that contributors are either making decisions or have varying amounts of weight based on how involved they are. So I think there's a point to be made about having core contributors and people who are consistently committing time and energy and have responsibilities in an organization have potentially a little bit more weight. in governance decisions, as opposed to exclusively token holders. So I think that there are ways that we can start to experiment with how contributors have a say in voting and how token holders have a say in voting and potentially even narrowing the scope of what

Starting point is 00:44:23 token holders can actually do, which ultimately, I think, brings you to the question of, okay, then why are tokens worth anything? If ultimately we're stripping away all of this value, then why would you hold a token? And honestly, I think that's going to be one of the biggest questions that DAOs have to deal with in the next couple of years. We're already seeing a few DAs experiment with becoming cultural currencies, kind of. That's the current approach. And I think there's something interesting there. I think that's the innovation that we're going to need to see a lot more of.

Starting point is 00:44:54 And as you mentioned earlier, sushi swap has been through a lot of drama. What would you do to try to turn sushi swap around now? I think once you have a token released, it becomes a whole different question. And I think that's why it's so challenging because, again, token holders are left with this major sort of, if you strip away a lot of the governance rights of token holders, you ultimately end up with an organization that probably operates a lot better as an organization. And I think contributors probably thrive. but you have this question of why did someone buy a token in the first place? And so I think one of the biggest things that an organization like sushi can do, which is a way easier said than done, is reconsider what the utility of the token is and think more deeply about how you can create other types of mechanisms to build in more utility, which is not going to be possible. Meaning that you wouldn't have sushi be a governance token? Or what do you mean by that?

Starting point is 00:45:58 I would have it be a governance token, but I would consider how it could be a token that is useful for other things in defy as well. And I don't know what that means for sushi specifically because I think it's challenging when you're a defy protocol in particular. Like I know there's a, I forget what doubt it is, but there's a Dow that's playing around with, you have to hold their NFT. You have to buy their NFT in order to leverage their defy strategies. what would it look like for sushi to experiment with that? So really adding more utility. So it is a governance token, but a lot of the value also comes from other sources and other things that they're doing outside of that.

Starting point is 00:46:40 But again, I think it's a lot easier to set than done. And I'm not sure if that's going to be the best approach. But in general, what about kind of the fact that the leadership is in such disarray? Do you feel like if you were to change the token setup that that would sort of resolve itself? for. I think a lot of this comes down to a question of my brain right away goes towards you need a really strong leader to push this stuff forward. And I don't know that that's an old way of thinking because I just wrote this piece about how falling back to hierarchy is kind of like texting your ex. It's like familiar. And when we're in these states of discomfort, we're like,

Starting point is 00:47:18 oh, you send the drunk text because you know it and it's familiar to you and comfortable. And I think my constant question is, is my brain falling back to you need a strong leader because it's a drunk text to my ex when I don't know the answer? Or is it that that's actually the best mechanism? So I think sometimes to take really chaotic moments and try to figure out how are we moving forward, it is really useful to have a very strong leader. I don't know exactly what the answer will be for sushi. I think these types of situations, though, ultimately, if sushi's able to make it through, will be a hell of a lot stronger because of it. So another one obviously is Wonderland Dow, which suddenly the community discovered that the

Starting point is 00:48:04 treasurer was Michael Patron, who is a convicted felon and was the co-founder of Quadriga CX, which obviously is one of the biggest scandals in crypto history. So how do you think that whole situation could have been prevented? and then what do you think Wonderland should do going forward? I think there are so many different layers to this. One of them is what is the role of anonymity and not knowing Simmons' background in giving them trust? And I think that's something that every community is going to have to decide on themselves. I don't think that that's going to have a unanimous answer.

Starting point is 00:48:46 Some communities are going to be so fond. with having someone who's in on in control of their treasury. Some people are totally fine with that when they know, you know, someone's identity, like that was totally fine for some people and very much not fine for a lot of other people. And so I think a lot of this comes down to, again, articulating those values and making them explicit so that if I go into Wonderland doubt and I see that one of the values is we, trust sort of without needing justification, like we trust by default, even if this means anonymous contributors have a lot of responsibility. That might be a red flag for me and I might

Starting point is 00:49:31 want to say, okay, not the space for me, but cool, you do you and we'll see how that turns out. So I really think a lot of this comes down to making those things explicit, which I think you have to find systems to do that. I think documenting decisions and maybe making these types of agreements is really important and then surfacing them so the people can actually understand what's going on. But to me, that's what a lot of this comes down to because some communities are going to, in a similar vein, think that, you know, having like token holders vote on everything is terrible or having a single person in charge of the Treasury is fine, but not if they're anonymous, you know? There are, I think, a lot of different versions of this.

Starting point is 00:50:14 even people who use Molluk DAOs have a very different version in their mind of what a treasury should look like and how it should be managed than people who are okay with having a couple signers on a multi-sig. So I think there's a huge scale and making sure that you're articulating where the DAO sits in every part is really important. So I just came up with this book and it goes into the history of Ethereum and one of the major events obviously was the Dow. It's funny because the book is 12 chapters and four of the chapters are about the Dow and it covers like two months. And then all the other chapters are like, you know, years. One thing that really strikes me is that at that time, they just had barely any tooling for when they created this Dow. You know, they kind of immediately realized, oh, we need to make some changes, but they had no way to kind of galvanize everybody and actually implement them. So obviously we've come a long way.

Starting point is 00:51:12 And I'm curious for you, like, what are the DAO tools that you really depend on and, like, really feel are sort of like instrumental right now and essential in managing DAOs? And what do you feel still needs to be built? So I will say, as just a precursor to this, one of the things that I think is really interesting about their lack of ability to change everything that was happening in the DAO because people who are, not necessarily like active voters were holding the tokens is a perfect example of the fact that implementing everything on chain right away, especially if it's binding like that, is going to cause problems. And it's why the Dow hack was able to be like as problematic as it was. And so something that I always say with regards to Dow tooling is I am very bearish on any Dow tool that is implementing a pattern that we haven't already tested and is not like a reflection

Starting point is 00:52:17 of what's currently happening. So an example of this is the Wikipedia, one of the Wikipedia co-founders had a company that he started before Wikipedia called Newpedia. And it was basically like Wikipedia, but it had all these rules about what you needed to do in order to contribute and who you needed to be and like all these different things. And it totally failed. The reason that Wikipedia succeeded was because they created this community. of passionate people. And then all of the rules and and mods and all that stuff emerged because they were codifying. It's a little bit less codified than it is in a smart contract. But they were saying, here's what we do. And they were writing these like rules in way that they govern based on what

Starting point is 00:52:58 they had explored and what worked. And so I think every Dow tool that I'm super excited about when we think about like Orca, even something like Snapshot, which came out of the balance or community because they needed something to do exactly what Snapshot currently does as a tool. All of those things in my mind are really, really great tools because they reflect what DOWs are already doing. They just make it easier. Or they put it on chain and make it more composable in the case of ORCA, for example. So I'm really excited about DOW tools that reflect what is already working.

Starting point is 00:53:32 And one of the other ones that is not really traditionally considered a DOW tool, but that I'm really excited about is murmur, which was created by people from the Ready, which is this like consulting company that helps organizations become more self-managing. They've helped the Fed and Airbnb and others. Now they're getting more into the Dow ecosystems. They're following Gitcoin and all of that. And they created this product that is basically like agreements for working. And it's useful in self-managing orgs, which is why I'm excited about it in Dow's because it's effectively these like emergent principles that, again, let's say you and I have some sort of conflict. If we're able to talk it out, we'll probably find out that it comes down to something that we

Starting point is 00:54:18 didn't realize one of us had X perspective and the other one had Y. So maybe like you thought that I was going to send something over to another person and I didn't do it. And then you felt like I was incompetent. At the end of the day, it was probably just that we had some misunderstanding about our roles and responsibilities. And so this allows you to, in those moments, like, oh, wait, this is what is not explicitly stated. Let's sort of codify that.

Starting point is 00:54:45 So I'm very excited about Dow tools that do things like that, as opposed to trying to create entirely new systems that feel like they're forcing, I always forget the phrasing, but like a square peg into a round hole. There we go. Exactly. Yes. So speaking of Dow tools, a lot of Dow's congregate on Discord. What are your thoughts about Discord as a platform for Dow discussion and as a Dow forum? I think Discord is really challenging alone. I mean, of course, like, everyone says discord sucks. That's not, I feel like eventually we might get somewhere else. But I also think a lot of it is actually, a lot of the friction that people currently attribute to Discord is actually

Starting point is 00:55:34 friction that comes from not having really great, again, models and practices and patterns. Because at the end of the day, a lot of this stuff is very human. I think you can even use Discord as a tool to build an organization where humans thrive. I don't think that there's anything about Discord that makes it so terrible it can't be used. But I think there are definitely things that make it challenging. Like it would be really nice to have certain features and and some things would be made a lot easier from Discord. I don't think it holds people back as much as they think it does. Maybe that's the hot take.

Starting point is 00:56:12 Well, you speak as a young person, but I can tell you it was an old. I find Discord extremely challenging. Do you find it more challenging than Slack? Yes, for sure. Really? Oh, for sure. I mean, granted, I'm also not a big Slack user, so maybe it's just that I don't know. But I feel like when I've used Slack in the past,

Starting point is 00:56:34 past, I could at least figure it out with Discord. I literally, I finally was just like to my assistant, okay, I'm going to give you the password. Can you get me into these discords where like I'm joining and then like nothing happens? That is very valid. I think I like messed something up along the way. So now like nothing works. You know what I mean? And it like got all backed up. And I being so focused on the book and like super busy with all that, I like never. got to fix it. And so there's like some problem like from months back that I never resolved. So it's just been like slightly, I'm not working for me for kind of a long time. But anyway, nobody cares. But it will be fixed to you guys because it's, it's happening right now as I'm recording this.

Starting point is 00:57:19 But you bring up a good point. I do think that my experience of Discord as someone who grew up with this type even of messaging platform. Like I didn't really even do the AIM stuff, which is that. I don't understand a lot of crypto references because I'm not a millennial even. But in any case, I think that it's a very good point and something that makes Discord problematic. Yeah. And I'm so old that I, like, didn't even have email until I went to college. And, like, growing up, just used accorded phone to talk to my friends.

Starting point is 00:57:57 Discord's a little bit of a different energy from accorded phone for sure. Just a little bit. So one other thing I want to ask you about was obviously so DAOs and NFTs have kind of like a big intersection point. So when you look at the future, like where do you see that going? Like how do you think they'll intersect? I think that DAWS are going to be the chosen mechanism for coordinating people and humans and all of like the things that come when you need to actually create something and coordinate all of that stuff. I think NFTs are going to be the way that we engage with a lot of media and things like that.

Starting point is 00:58:44 So I see most NFT communities as DAWS. And I think a lot of DAWS will leverage NFTs. Something that I'm really excited about that I'm seeing a lot more of and it totally makes sense when you think about this entire conversation is we have tokens. That's fine. We'll figure out how to use those for governance. Let's give contributors NFTs. So with Orca, for example, which for anyone who isn't familiar, orca is a protocol that essentially codifies, like, working groups within a Dow. So they're called pods. And you have members of a given pod that have control over a multi-sig typically, like the sort of primitive is a multi-sig with NFTs that give you membership to a pod, which can allow you to control the multi-sig. So I think what we're going to see a lot more of, and Orca is a perfect example of this, is NFTs being used as a way to not only represent membership, which can give you access to something like a multi-sig, but also to give you governance rights more broadly as a contributor. And so I think, you know, even the ability to have really rich metadata in NFTs, which is

Starting point is 00:59:54 not the case with ERC20 tokens, gives us an ability to do a lot more with governance. and I'm already talking, I'm seeing this a little bit as bubbling up. And so I think it's going to be something that ends up being really, really important over the next year. And then, of course, longer term, I think we're going to see way crazier mixes of these two things. But in the beginning, I think this is going to be one of the big ways that DAOs and NFTs intersect. And what other trends in DAWS are you looking out for in the upcoming months or even kind of like the next year or two? One of them, if you couldn't tell, is definitely articulating values and expectations. Like, it's so boring, but it's so important.

Starting point is 01:00:35 And I think so many organizations, companies don't do this well. I think DAOs have an opportunity to do it really well. Information asymmetry, I think, is really toxic for DAWS. So having that type of thing, I think, is incredibly important. This notion of how we think about the value of governance tokens, I expect to be a big one, in that vein, I think inflationary governance tokens are going to be really important. So when you think about the way that governance tokens are currently distributed, it tends to be to a lot to the founding team and then also potentially to venture capital. And I think the challenge with that is over time as an organization changes.

Starting point is 01:01:15 The founders or the VCs that originally backed a Dow might not actually be the right people to be holding those tokens. and actually even more so early contributors might not be at all even interested in the organization anymore, but they actually have a lot of governance power. And I think that's a flawed model. I think we're going to realize that. And it's probably going to be a painful process. But one of the really interesting ways I think to approach that is inflationary governance tokens, where you have the ability to create new tokens, give those to existing,

Starting point is 01:01:50 to contributors that are actually actively contributing, and effectively dilute earlier founders and VCs and all of that. I think it's going to take a while to see that in term sheets. I think that's not something that VCs are going to be excited about, which is very fair. But I do think that over time we're going to realize that that's actually one of the best ways to make sure that we have contributors that are aligned, not just on values, but also in being able to govern the organization itself. Huh. That's super interesting. I like that idea. So is there anything that I haven't asked you that you would like my listeners to know? I don't think so. This is a fun chat on DAOs. The concept of DAWS have gone, have come such a long way. And you're reporting on the Dow was such a perfect example of this because I think a lot of people in the space had no idea that there was even. And when I say in the space, I mean, people who have come in in the last year and gotten excited. about DAOs really had no idea.

Starting point is 01:02:51 Not only that there was an original DAO, but that it caused the Ethereum fork. So. Oh, wow. Wait, and did you read my book? I didn't, but I bought the audio book or I have it in like my Amazon card or whatever or on my watch list. And I was super stoked about listening to that podcast because every single aspect of it, I was like, this is the problem.

Starting point is 01:03:17 Like this is why we need to have better. mechanisms for governance because all of the stuff that was on chain and having all of that was like, oh my God, we're going to recreate the same problem if we're not careful. You're talking about the episode with Griff and Left Harris and Christoph? Yes, I think so. It was a little, it was like a whole story of everything that happened and how you figured out what was going on. Oh, oh, the one about how I figured out who the Dow attacker was. Yes, yes. Oh, okay, okay, okay. it was really, really interesting in the context of all of this because it's all of the same challenges,

Starting point is 01:03:55 you know? And it was like, okay, we're going to be redoing this over again. Yeah, I actually want to hear from you after you actually listened to my book because I think you'll have a greater understanding of all the craziness that went on in the Dow. I'm very excited. We're still very early. I think it's always a always remembering that. But that was like proto-Dao and it was like so early. the whole thing just ended up being so crazy. Okay, so where can people learn more about you and all of your work? Yes. Mostly on Twitter.

Starting point is 01:04:29 That's where I exist. And I have my podcast on the other side, which is on pretty much every platform. But that's linked in my Twitter bio. And your Twitter is? Oh, Chaser Chapman. So it's Chase Chapman, but with an R in the middle. Okay, perfect. All right.

Starting point is 01:04:43 Well, thank you so much for coming on Unchained. Thank you for having you. So fun to chat. It really was. Thanks for coming on the show. Thanks so much for joining us today to learn more about Chase, Dow's, and her work at Decentology. On the other side, Orca Index Go Up and Rabbit Hole, Checker the show notes for this episode. Unchained is produced by me, Laura Shin, with help from Anthony Youe, Daniel Ness, Mark Murdoch, Shoshank, and CLK transcription. Thanks for listening.

Unchained - What Is It Like to Only Work for DAOs? Chase Chapman Tells All - Ep.330

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