Proposal making in DAOs: the limitations of “anyone can propose anything”

Two types of decisions

  • Just Go Ahead decisions are ideas that can be executed without much impact on the environment or others. Creating a new feature, hosting a meetup, writing a blog post, or choosing a charity for discretionary funds would fall into these categories. If you can raise the funds or get the followers and developers, go ahead.
  • Must Be Inclusive decisions are those which will affect many stakeholders and should include the stakeholders in the decision. The tragedy of the current economy is that governments, corporations and other organizations are making decisions that affect many people without including them in the decision. If you are building a highway, regulating 5G bandwidth, producing sugary drinks, harvesting timber, or throwing a loud party in your apartment building, those are decisions that affect other people.

Just-Go-Ahead Decisions

  • Just go: If it can be done within the budget and resources the individual has at her disposal, she can just run with it. Most work in most organizations is done this way.
  • Collect resources and go: Anyone within the organization can do any project for which they have the resources. Enspiral’s Cobudget application allows people in an organization to propose projects, and if they reach the funding goal, they can go ahead. Satalia’s internal IT system allows anyone to propose anything, and utilizes AI to suggest other participants to join. If enough people are interested in developing the feature, it goes forward. Features and projects that aren’t funded don’t go ahead.
  • Delegation: Certain individuals or departments are given autonomy in a domain. This might look like asking for permission or a budget from a boss or domain-related team before going ahead.
  • Seek advice: Individuals and teams can do what they want, but they are encouraged to seek advice. Most DAO processes follow this pattern. A proposal is made informally on a discussion group, and the community provides feedback before the proposal goes to a vote. The person making the proposal has the option of incorporating the feedback, or not. This process allows improvement of the proposal, and increases the probability of the proposal’s passing when it comes to vote.
  • Consent throughout the organization: A decision can go ahead as long as there are no objections.
  • Full Consensus: A discussion is required, and the decision needs to get consensus from everyone (or a quorum) within the organization. This methodology is often used for the second type of decision, that is “Must-Be-Inclusive”. For example, a number of departments within the United Nations allow decisions only by consensus, which means the people involved must come to an agreement. Interestingly, the budgetary committee is one of those groups, meaning that even in a (literally) zero-sum situation, it is possible to reach consensus.
  • Arbitration: When there is a dispute within the organization, an arbitrator or arbitration process is brought to resolve the issue. Everyone agrees in advance that the decision of the arbitrator will be accepted.
  • Competition: Many organizations have competitions such as hackathons, voting on the “best ideas” or other official types of games. Typically, this type of competition is used for new product development.
  • Brainstorming or formal proposal-making processes: Formal decision-making processes are outlined in management literature, such as the book “Paid to Think.” Formal enterprise-thinking procedures allow companies to come to optimal decisions for everything from budget allocation to marketing campaigns.
  • Polling and signalling: A variety of methods can be used for polling what people want and then making a decision based on majority sentiment.

Must-Be-Inclusive Decisions

  • Consensus-only. Unanimous or almost-unanimous consensus. In cases where lives are at stake, unanimous probably makes sense.
  • Arbitration
  • Brainstorming or formal proposal-making processes: Our vision of this process would be to have groups work together to make the best possible proposals, rewarding people for collaboration rather than competition. The best proposals would be voted on in a multiple-choice fashion rather than yes-or-no.
  • Random sample focus groups: One successful model that has been used in public policy is to take a random sample of citizens, give them accurate and balanced information on a topic, and have the group come up with solutions. In real life, groups of 20–100 have come up with balanced proposals and the studies have shown that people automatically consider the needs of others in these groups when they see it as their civic duty.
  • Delegation, particularly useful in crisis or deadline-oriented decisions. Delegation can be random, but in crisis, it’s essential to have a clear rule set decided upon in advance.
  • Wisdom or expert model: In the wisdom model, people with experience or reputation in the realm make the proposals, rather than “anyone.”
  • Collective intelligence: Research of similar models and application of data modelling to suggest proven methodologies for solutions.

Better decision-making systems account for different types of decisions

Choosing the right proposal-making methodology

But… isn’t that difficult?

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