The downturn of the markets in early 2022 marked a time for introspection. By turning inwards, DXdao reassessed its current position and future objectives. After a period of forum discussions and community calls, DXdao passed on-chain the multi-phase DXdao Restructuring and Refocus proposal. The aim of this proposal was two-fold: first, to ensure the DAO was prepared to endure a prolonged bear market; and second, to upgrade its operational and governance structure.
The magnitude of this undertaking was the reason for a three phase process. From the quickest and least controversial in Phase 1 to the more complex and contentious to resolve in Phase 3, issues were separated in escalating order of significance. To clarify the DAOs overarching goals and exactly how to tackle them, the process has focused on open discussion, consensus, and shared commitment. The DAO started with the path of least resistance, Phase 1, moving quickly to tighten the budget and ensure a healthy runway in the event of an extended down market.
Phase 1: Low Hanging Fruit
Aptly named “Low Hanging Fruit”, Phase 1 represented issues that could be expedited as they were fast and agreeable. With the added bonus of yielding immediate benefits for the DAO, Phase 1 quickly passed through the governance process and the following actions were promptly implemented:
- Disengagement from contractors. Disengaging from contractors yielded immediate positive budgetary effects.
- Limit auditing budget to $150k annually, with additional spending requiring full financial justification. DXdao recognizes the importance of establishing trust among users and places enormous value on audits. Audits should not be rushed and ordered before there is a reasonable path to product market fit and recuperation of funds.
- Limit event budget to $150k annually. Participation at events is vital to the exposure and recognition factor of the DAO. Therefore, a targeted approach to attendance must be implemented around the goals of the DAO for the event, and who is best suited to accomplish those goals.
- Temporarily “restrict” additional or new contributor engagements. This point remains open ended as it is dependent on project needs and staff turnover.
- Involve DXD holders in restructuring phases. Tapping into all the resources of the DAO is paramount and this would include DXD holders. Thus far their participation has been extremely valuable in the newly established DXD Token Model.
- Decrease both the number and length of weekly calls. A mental health step. Asynchronous work can be demanding and this step helps in maintaining a healthy level of productivity and attention while limiting fatigue and “meeting overload”.
Immediate Budget Implications:
The budgetary implications of Phase 1 were significant for a first step and saw a reduction of approximately $686,196.00 in annual costs. Support for figures used in the budgetary assessment were abstracted from the following DAOtalk discussion of June 17th, 2022 (Expenses) and July 25th, 2022 (Budget).
Phase 2: Accountability, Access, Anatomy (Structure).
Phase 2 represented the meat and potatoes of the Restructuring and Refocus initiative. It was primarily aimed at improving governance processes, operational structures, preventing stagnation, encouraging ideation and other cultural and communication issues. With such wide-reaching topics and important questions that needed clarification, the bulk of the discussions and presentations were set to happen in person at the DXdao Retreat, immediately after Devcon in Colombia.
At the retreat, presentations were held and discussions were had to work through some of the big issues. DXretreat highlighted how aligned the contributor base was on difficult topics and their commitment to solving them. Upon returning from Colombia, with added clarity and renewed purpose, the DAO set to work at passing Phase 2 of the Restructuring and Refocus proposal.
It is important to note that in conjunction with the passing of Phase 2, DXdao also implemented The New DXD Token Model that was passed on-chain at the end of 2022. In the new DXdao ecosystem, non-contributing DXD holders will enjoy closer alignment with the DAO as DXD will now get its value from DXdao’s treasury, which will grow from product revenue and its investments into decentralized technologies. More reading on the token model and how it benefits all DXdao stakeholders is available here.
Continuing with the Restructuring and Refocus, the passing of Phase 2 resulted in major changes to the operational structure of the DAO, specifically committing the DAO to execute on the following 5 major items:
- Implement a six-month squad-based budgetary cycle. Squad budget discussions evolved into the formation of Guilds. Smaller squads merged to form larger more operationally effective guilds. This was a natural evolution to give more autonomy and accountability to teams in terms of goals and budgets. Governance of the Guilds will be enacted through DXdao’s latest product, Project DAVI (Decentralised Autonomous Voting Interface).
- *Explore “accountability councils.” It is no secret that DAO governance is time consuming. To assist in the governance process and free up attention of full time contributors, the DXdao community has been discussing “Mission Wardens”. Mission Wardens will be chosen from the wider community. They will gather information on the progress of the various projects and report their findings on a quarterly basis to aid REP holders in their decision making process. If you are interested in participating as a Mission Warden, you can read the full post here on what is expected, what is required, and how to apply.
- *Implement a “priorities board” and a democratic process of determining said priorities. The Priorities Board will be established to help set and manage coordination of the overarching DXdao priorities. Monthly meetings will be held to go over the current priorities, discuss their rankings and consider new submissions. After the meeting there will be a poll on whether or not to add new priorities and also their re-ranking if needed.
- *Establish its direction as a “Decentralized Pipeline for Communities” and look to prioritize a “flagship” product. With this action the DAO aims to unify its product efforts in creating a comprehensive product offering to the DAO and DeFi community. The DAO aims to explore product market fit, competition and comparables and then deliver an operable wireframe and GTM framework.
- *Establish “Enable Community Freedom” as the official DXdao vision. This vision emerged from the DXretreat and will help the DAO clarify functional Vision, Mission and Strategy statements that will aid the DAO in setting its “True North”. Adjustments to this are expected as the DAO rolls into the third phase.
* Items 2–5 are “In Progress”. To join in the conversation we encourage you to join our Discord and follow our social accounts listed below in the footer of this post.
Phase 3: Stepping back while pushing forward
Phase 3 will represent difficult discussions surrounding the newly introduced priority justifications (Priorities Board and Guild Goals & Objectives) and their implications. By focusing on financial viability and accommodating the overall budget, the aim is to trim away all unnecessary fat while still focusing on crafting a unique suite of products and capitalizing on essential opportunities.
The results and findings from Phase 2 will heavily influence the actions of Phase 3, which might have a range of implications. Budget cuts, for instance, if DXdao is unable to identify opportunities to profit from, or budget increases in cases where it is thought that there would be gains or added value.
About DXdao: DXdao is a decentralized collective that builds, owns, and governs DeFi and governance products. Reputation (REP) is voting power in DXdao, and DXD is the financial token with a claim on profit from DXdao products.
DXdao products include Omen (prediction markets), Carrot (programmable incentives), DXgov (governance framework), and Swapr (governance-enabled AMM). DXdao believes in governance and decentralization.