NFTY #49: mini-DAOs 👹

Sustaining the development of open ecosystems through guild banks

The NFTY News tracks the ever-evolving narrative of how the mainstream will enter crypto through user applications. In each edition I explore non-fungible tokens, dApps, and the ecosystem affecting consumer crypto applications.


It’s been a big week for MolochDAO, the community-run bank to fund projects on Ethereum.

While the UI has been greatly improved over these past few months, I’m skeptical on two specific issues:

  • Will members of the MolochDAO be able to agree on what problems should be tackled? If the scope of proposals are too wide, members of the guild might either be biased on one particular problem or even not have the knowledge on voting on a particular proposal.

  • The MolochDAO requires 100 ETH to enter as member. Will this system run into plutocracy? Should requirements be more dependent on if they have demonstrated use of the protocol or ecosystem?

I’ve been thinking about how these problems get solved, and the answer might be to have forks of Moloch with more specific use-cases of funding for open ecosystems. However, the problem with more granular DAOs is determining if the ecosystems are even worth governing. Some ecosystems already have governance built in (like MakerDAO) but suffer from a lack of voter turnout.

An ecosystem is worth governing depending on if community has started to build & demonstrate a demand for tools to support that ecosystem. Developers who wish to apply for grant funding from these proposals would also need to demonstrate skin-in-the-game before applying for a grant.

Here are some ecosystems within a protocol that I believe would benefit with a forked Moloch, along with some of its potential uses:

  1. Prediction Markets (eg. Augur) - projects determine which tools are needed for prediction markets, use a prediction market to determine which members should get voted in/kicked. Market maker fee is fed back into the DAO.

  2. Blockchain games with an ecosystem (eg. KittyVerse from CryptoKitties) - the hardcore players could govern which second-layer of games are funded and determine if it’s an appropriate use of IP so that the ecosystem is sustained. Players must own an NFT from a contract with a specific property in addition to be voted in.

  3. Standards (eg. 1155) - projects building on new standards should deploy capital in which further increase the adoption of the standard. More projects receiving funding means more ways contracts are used across a protocol.

Granularity of cryptonetworks is something I’m particularly interested in. I’ve wrote about mini-dApps (third or fourth layer) and the unbundling of relayers in previous issues. Interested in talking more about granularity and how it affects adoption of crypto? DM me on Twitter @flynnjamm.


Disclaimer: I work on helping create a world of infinite possibility at Dapper Labs. All opinions are my own and don’t represent the opinions of Dapper Labs.