Lesson 1 summary ce40199cefb94affb03776d10f47b08e
Lesson 1 summary
Important: use this link to sign up to the discussion platform:
Governance
Definitions:
- The process of making and enforcing decisions within an organization or society (Wikipedia)
- The way that organizations or countries are managed at the highest level, and the systems for doing this. (Cambridge Dictionary)
- Originating from the Latin verb gubernare and ancient Greek word kubernaein, governance means ‘to steer’. Literally, it means ‘to control, guide or manipulate’.
- The word “Gubernum” (from which —> Government) means “rudder” in ancient Latin.
Governance refers to the systems, processes, and structures through which decisions are made and authority is exercised in a particular group or organization. Effective governance is essential for the proper functioning of any group, whether it is a small family, a corporation, or a nation.
At its core, governance involves the establishment of rules and procedures that guide decision-making, and the allocation of power and resources. In a democratic society, this often involves the establishment of a system of representative government, where citizens elect officials to make decisions on their behalf.
One of the key functions of governance is to establish a framework for accountability. This means that those in positions of power must be responsible for their actions and be answerable to those affected by their decisions. This is often achieved through the establishment of independent oversight bodies, such as a judiciary or ombudsman.
Another important function of governance is to ensure transparency in decision-making processes. This means that information should be readily available to those who are affected by decisions, and that decisions should be made in a way that is open and inclusive.
Good governance also involves the effective management of resources, including financial resources, natural resources, and human resources. This means that decisions must be made in a way that is sustainable and that takes into account the long-term impacts of decisions.
In addition to these core functions, governance also involves the establishment of social norms and values. This includes the development of a sense of shared purpose and collective identity, as well as the establishment of ethical and moral principles that guide decision-making.
The threats of centralized governance and the Web3 decentralized solutions
Centralized governance has been the norm for centuries, with governments and corporations holding the power to make decisions that affect the lives of individuals. While this form of governance has its advantages, it also poses several threats, including the concentration of power and the potential for abuse. In recent years, web3 decentralized solutions have emerged as a potential alternative to centralized governance, offering greater transparency, accountability, and participation.
One of the main threats of centralized governance is the concentration of power in the hands of a few individuals or entities. This can lead to corruption and the abuse of power, as those in control may prioritize their own interests over those of the wider community. Furthermore, centralized governance can limit participation and representation, with decisions being made by a small group of individuals without input from the broader community.
Decentralized solutions, on the other hand, offer the potential for greater transparency and accountability. This is because decisions are made through consensus among a network of stakeholders, rather than by a single authority. Decentralized systems also offer greater participation and representation, as all members of the network have a say in decision-making.
Blockchain is the decentralized revolutionary technology that has gained a lot of attention in recent years and that allowed decentralized governance systems. It is a decentralized and distributed digital ledger that records transactions in a secure and transparent manner. In simple terms, a blockchain is a database that is shared across a network of computers. Each block in the chain contains a set of transactions, and once a block is added to the chain, it cannot be altered or deleted.
One of the key features of blockchain is that it does not require a central authority to manage or validate transactions. Instead, transactions are verified and added to the blockchain through a process called consensus. This means that multiple nodes on the network must agree on the validity of each transaction before it is added to the chain. This decentralized approach to validation eliminates the need for a central authority, making blockchain more efficient and resistant to attacks.
Decentralized solutions also offer greater security, as data is distributed across the network rather than stored in a central location that can be vulnerable to hacking or data breaches. This is because in decentralized systems, each user maintains control over their own data, rather than relying on a central entity to protect their information.
Another threat of centralized governance is the potential for censorship and control over information. In centralized systems, information is often controlled by a small group of individuals or entities, and censorship or manipulation of information can occur. Decentralized solutions, however, offer greater freedom of expression and access to information, as information is distributed across the network rather than controlled by a central authority.
To sum up, decentralized governance solutions powered by blockchain:
- Doesn’t need a trusted central entity because information is distributed among many nodes, each of them have an exact copy of the state of the affairs. Removing the middle man
- Can’t be censored by anyone
- Runs in a fully transparent way: everyone can control the state of the affairs at any time
We will explain in details how blockchain works in the upcoming lessons.
The School DAO Tool
We offer a governance tool that you can use to organize yourselves, brainstorm and discuss and vote on proposals, and eventually execute them or submit them to the administration to have your voices heard. In the future, you can connect to other platforms and students from other schools and raise funds to carry out your projects.
It’s made of:
- A discussion platform where you can brainstorm, discuss and refine your proposals
- A decentralized voting platform where you can vote through your Web3 Wallet
Introduction to DAOs
What we are going to do in Granada Hills is setting up the first seed of a potential school wide DAO.
DAOs, or Decentralized Autonomous Organizations, are organizations that operate on a decentralized and autonomous basis, using blockchain technology and smart contracts to govern and manage their operations. In a DAO, decisions are made through consensus among members, rather than through a centralized authority. DAOs are typically open to anyone to join, and members are incentivized to participate in decision-making and contribute to the organization's success.
One of the key features of DAOs is their use of smart contracts, which are self-executing contracts with the terms of the agreement written into code. Smart contracts allow DAOs to operate autonomously, with decisions being made automatically based on pre-determined rules and conditions. This eliminates the need for a central authority and reduces the potential for human error or manipulation.
DAOs can be used for a wide range of purposes, from managing funds and investments to providing public goods and services. They can also be used for governance, allowing members to vote on decisions related to the organization's operations and direction.
Overall, DAOs represent a new paradigm in organizational governance, offering a more decentralized, autonomous, and transparent approach to decision-making and management. As blockchain technology continues to develop, it is likely that we will see more DAOs emerging, transforming the way we think about organizations and their operations.
Key features of DAOs:
- Decentralized
- Autonomous
- Transparent
- Community-Driven
- Trustless
- Immutable
- Flexible
- Unstoppable
- Global
Some DAOs use cases:
- Fundraising:
- Constitution DAO: it was set up in 2022 to participate to an auction in order to buy a physical copy of the US Constitution. In just one week, the DAO managed to raise 43 million dollar (most successful fundraising campaign in the history of internet)
- UkraineDAO: created right after the Russian invasion of Ukraine by activist Alona Shevchenko, Ukraine DAO raised more than 7 million dollars in a few month and distributed them among several humanitarian projects chosen by the community through a decentralized governance system.
- Sports:
- Krause Hause DAO: a community created with the aim of collectively acquiring an nba team and managing it in a decentralised manner
- Environmental causes:
- Klima DAO: a DAO focused on combating climate change by using blockchain technology to offset carbon emissions. Members of Klima DAO pool their resources to purchase and retire carbon credits, which are then permanently removed from circulation. Klima DAO aims to create a new market for carbon credits that is transparent, accessible, and efficient, making it easier for individuals and organizations to take action against climate change.
- Scientific research:
- Vita DAO: a DAO focused on advancing research and development in the field of life sciences. Members of VitaDAO collect resources to fund cutting-edge research projects, with the goal of accelerating the discovery of new treatments and therapies for a wide range of diseases and conditions. VitaDAO uses blockchain technology to manage its operations, allowing members to participate in decision-making and share in the benefits of their contributions. The organization aims to create a more collaborative, transparent, and decentralized approach to funding research in the life sciences.
- Social DAOs:
- Bored Ape Yacht Club (BAYC) DAO: it was created by the community of owners of Bored Ape NFTs, which are unique digital collectibles featuring various cartoon apes. The BAYC DAO serves as a platform for members to collaborate on community-driven initiatives, such as events, merchandise, and charity projects. Members of the BAYC DAO can also vote on proposals related to the management and governance of the organization. The BAYC community has cultivated a strong sense of culture and identity, centered around the concept of "yacht club membership." BAYC members are encouraged to participate in exclusive events and activities, such as yacht parties and other social gatherings. This has helped to create a sense of exclusivity and prestige around the BAYC brand, which has contributed to its popularity and appeal. The maximum price for which a Bored Ape Yacht Club (BAYC) NFT was sold was 4,000 ETH (Ethereum), which was approximately $12.7 million USD at the time of the sale.
- Metaverse:
- Decentraland: it’sa DAO that governs the Decentraland virtual world, which is a blockchain-based platform for creating and exploring user-generated content in a virtual reality environment. Decentraland allows users to create and own virtual land, which can be developed and monetized using a variety of tools and assets. Overall, Decentraland DAO aims to create a more democratic and community-driven approach to virtual world development, where users have a greater say in the direction and evolution of the platform. The DAO is responsible for managing the development, maintenance, and governance of the Decentraland platform. This includes decisions related to technical upgrades, community initiatives, and the allocation of resources and funding. It is governed by a community of token holders who use the platform's native cryptocurrency, MANA, to participate in the decision-making process. Token holders can submit proposals, vote on governance decisions, and earn rewards for contributing to the development and growth of the Decentraland ecosystem.
- Decentralized Finance (DeFi)
- Uniswap DAO: Uniswap is a popular decentralized exchange built on the Ethereum blockchain that allows users to swap between ERC-20 tokens without the need for a centralized intermediary. The Uniswap DAO operates on the Ethereum blockchain and is responsible for managing the development, maintenance, and governance of the Uniswap platform. This includes decisions related to technical upgrades, fee structures, and liquidity incentives.
Example of a DAO governance process
Any member of the DAO can propose to the community an idea or change they would like to see implemented. This can be done through a variety of channels, such as a forum or chat platform specific to the DAO.
The process for proposal creation is normally the following:
- Proposal brainstorming: members of the DAO start discussing and refining ideas for possible implementations and improvements.
- Proposal writing: the member who proposed the idea or change will typically write a formal proposal that outlines the details of the proposal, such as its objectives, methods of implementation, and potential impact on the DAO and its members.
- Proposal discussion and alteration: the proposal is then typically posted on a forum and opened up for discussion and alteration. Other members of the DAO can provide feedback, ask questions, suggest modifications, and generally engage in a collaborative process to refine the proposal and make it more viable.
- Proposal vote: Once the proposal has been discussed and altered to the satisfaction of the members, it is put up for a vote. Voting may be done through a variety of mechanisms, such as a token-weighted voting system, in which members use their DAO-specific tokens to cast votes, or through a one wallet - one vote sytem (which we will use for Granada Hills).
- Proposal enactment: If the proposal receives a sufficient number of votes in favor, it is enacted and implemented by the DAO. In the casa of Granada Hills DAO, this might mean that a proposal, once approved by the students community, is submitted to the school administration.
How to write a proposal: a template
Although each DAO member can decide independently how to structure their proposals, we recommend the following template, which is very commonly used within the industry
- Title: explain in one line what is your proposal about
- Background: describe the existing situation your proposal is attempting to change
- Rationale: describe what the proposal is aiming to achieve, why it is needed, and how to achieve it
- Funding: if your proposal requires a budget, write it here, including a detailed description on how you plan to spend it. If you are going to be raising the funds, describe how the funds will be raised.
- Risks and mitigation: describe possible risk that the organization may encounter if your proposal is enacted, and the actions you plan to take in order to mitigate them
- Supporters: have you gathered support on your proposal before publishing it? Who else is rallying for it? Write their names here to prove that you’re not alone!
Assignments:
- Click ▶️ here ◀️ to sign up to the governance forum!
- Review the learning material that we shared in the Web3 Learning section of the discussion platfform. Address: granadahills.theschooldao.org
- Brainstorm your first proposal, write a draft, start looking for feedback and consensus around it
- Onboard 100 students to the discussion platform: the success of this initiative is in your hands and is proportional to the number of students you manage to involve. The more of you there are, the more weight your decisions and requests will have!