Celebrating Forking within DAOs

Using forking (rather than voting) to achieve growth and diversity in DAOs

The DAO discourse has been dominated by discussions of voice.

What are the best governance structures to invite participation? How do DAOs build soft and hard consensus? How can individuals make their opinions heard? 

These are useful and important questions. These “voice” based rights enable members to change the system from within. But focusing solely on these rights is a bias we’ve inherited from corporations or countries - where living within the system is the only economic or political choice.

We’re here because “governance tokens” were a concept invented by lawyers to steer clear of securities law. It wasn’t meant to be a descriptive meme for how DAOs should make decisions — allowing everyone to vote on everything. This puts too many cooks in the kitchen. Of course, One way to solve this is via delegation. But a better option in our opinion is via exit.

When major disagreements arise, DAOs should make the ability to exit both financially and politically viable. Given how early we are in the development of DAO norms, we have a unique opportunity to craft the cultural norms in this space. At Superteam, we believe this “right to exit” should be preserved as a fundamental right in Web3.

The rest of this essay explains why it’s essential, how it can be done in practice, and what we at Superteam are doing to enable the exit of our community members. 

Forking > Voting

In the traditional world, the cost of exiting a system is high. Exiting a company means losing the accretive gains of your career in that organization. Exiting a country means leaving your social network and emotional foundation behind. As such, rights that preserve the voice of individuals become critical. When exit is expensive, then voice is the only choice – and must be made as cheap as possible.

Web3 is different. Communities who don’t like a product direction can simply fork the project code. Users who don’t like depositing funds in a particular DeFi protocol can shift their liquidity in seconds. And with the advent of Vampire Attacks, users are even being financially encouraged to exit old systems. Consider the following paragraph about the right to “rage quit” for instance.

"rage quit" is […] probably more aptly called "freedom to leave" or something like that. And, like the domino that kicks off a paradigm shift, it seems too simple to be such a big deal. But it is. […] Rage quit is actually the ability to leave, and take your money with you. This is very powerful and aligned properly it can motivate cooperation and empower a community. […] The programatic existence of "exit rights" creates a new dynamic for contribution to a project. Sure, anyone could throw money in and then just go about their business. But the built in transparency of a DAO means that anyone who wants to protect their money can see what's happening in DAO transactions, and take their share back out.

Preserving the right to exit is essential for two reasons: 

Benefit #1: Ease of Exit Recognizes the Self-Sovereignty of DAO Members. 

Every individual in Web3 deserves to be in control of their own destiny. Making it easy to “exit” a DAO, without the corresponding social, intellectual, and emotional costs, is how DAOs can demonstrate their commitment to their Members. The alternative is allowing a majority of voters to decide the fate of the minority. We see DAOs as a collective of sovereigns first, and a sovereign collective second. Long term, we believe that DAOs which preserve the right to exit will have a competitive advantage over those that don’t. 

Benefit #2: Forking as a Growth Strategy.

We know now that startups scale into companies. But what do DAOs scale into? A bigger DAO? We think not. Instead, we believe DAOs scale by incubating other DAOs from within. These new DAOs will be kickstarted by members who want to build on different ideological and operational principles. Failing to do this creates the large, impersonal organizations with soulless corporate structures that we call companies today. Disagreements are unavoidable in any group of individuals. But we must view disagreements as an opportunity to fork rather than vote. Forking the DAO can be a positive sum outcome (eg., the original DAO can be an angel inventor in the fork) and one that can encourage the creation of new, diverse communities that thrive in their own microcosm.

What the “Right to Exit” Looks Like 

It’s easy to talk about the ease of exit. Actually making it easy to exit can be more difficult. At Superteam, we’re experimenting with three tactics to promote and preserve the right to exit: 

Making Our Infrastructure “Forkable”:

Forking a protocol simply means taking the existing codebase, making a few adjustments, and then running the protocol under a new banner. This is possible due to the inherently open nature of Web3 projects. 

In the long run, DAOs generally should strive for the same level of forkability. This means open-sourcing templates, frameworks, tech stack suggestions, and other basic infrastructure to any Member who wants to use it. Documentation is the easiest way to do this. As a non-exhaustive list, we propose DAOs should create easily accessible documentation around onboarding, governance mechanics, reputation management, project management, compensation design, and offboarding.

At Superteam, we’re going to be open-sourcing our process and playbook (member schedules permitting) over the coming weeks and months. If you’re a Member of SuperteamDAO and want to build your own DAO, you’re welcome to use the starter kit to start your own community.

Opening ourselves to invest in forks:

DAOs which give their members the tools to fork are good. DAOs which can provide capital to their members to fork are even better. This can take a variety of shapes depending on the maturity of the DAO.

1. In the best case, the original DAO can conduct a token swap with the forked DAO.

2. If that’s not possible, the second best option is for members of the original DAO to consider making individualized angel investments.

Providing a clear investment thesis before the exit occurs is a great way to encourage accountability on this level. And if capital investment is not an option, the original DAO should strive to at least provide connections. This may take the form of intros to VCs, angels, or other DAOs. 

Create Pro-Exit Cultural Norms: 

To create pro-exit norms, a DAO needs to lean into pro-exit communications. In the same way that innovative companies celebrate failure in order to destigmatize it, DAOs should celebrate exits. They are proof that the DAO is working, rather than an indication of something being broken.

Tactically, will require DAOs to update their core values to include the right to exit. It will further require formal announcements in Discord and on Community Calls for any exiting Members. 

Until recently, DAOs have largely been about pooling capital with minimal friction. That capital may be pooled to buy the Constitution, a cabin in the woods, or NFTs.

But the next generation of DAOs will also allow pooling labor — requiring complex coordination of non-fungible human beings. In our view, the zenith of coordination is reached when we have the ability to instantly organize small startup teams that can get instantly funded and execute missions with speed and effect.

Exit allows us to retain focus on this singular mission, but we acknowledge that other aspirations and goals of the community are equally valuable.

We will be treating departing members the same way we’d treat a friend who decides to move to a new city. It is fundamentally a growth opportunity for all involved, and should be treated as such. The communications will be positive and encouraging, rather than cold and abrupt. 

How to Exit Superteam

If you work at Pepsi and want to start a new soft drinks company, your managers will call security and have you escorted out of the building. But if you’re a member of SuperteamDAO and want to start your own DAO, our community will do everything we can to help you succeed. 

Here are a list of good reasons to exit Superteam: 

1. When you want to build a community to pursue a mission different, complimentary or even competitive to that of Superteam

2. You want to build a community with a collective on-chain governance

3. You want to issue a token

4. You want to add support for goal that the one that is currently articulated

5. You didn’t sleep well last night

6. Mercury was in retrograde

Here are a list of bad reasons to exit Superteam:

1. None 😁

If you’d like to exit Superteam and create your own DAO, follow these simple few steps:

1. Ping @Kash with your DAO fork and the necessary links

2. Request an announcement on the #announcements channel

3. If you’re raising angel funding, community members are free to participate in their individual capacity.

Web3 will lead to a collaborative abundance if we do this right. We can’t wait to see the many communities that will emerge out of Superteam.

Best of luck! 

Superteam

header image: WikiCommons Courtesy of ArnoldReinhold