Achieving operational excellence for your DAO
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Achieving operational excellence for your DAO
Decentralization introduces additional organizational complexity. Here's how to get your DAO ops in order.
Happy Thursday!
In case you didn’t notice, we decided to transition the newsletter to biweekly instead of weekly and renamed it accordingly: DeOps Weekly is now Decentralized Ops.
Here’s what we’ve got for you today:
Best practices for DAO operations
The latest DeOps news
A web3 accounting job
A new Decentralized Ops episode with Megan Murray from ATX DAO
This week’s topic
🧠 Achieving operational excellence for your DAO
DAOs boomed over the last bull cycle with 10,000+ DAOs currently in existence and $11.3 billion in total treasuries (according to DeepDAO).
It can be a challenge to uncover the best practices and frameworks to operate a DAO successfully.
Why it matters: In order to succeed from a revenue standpoint, DAOs should create efficient processes for critical activities like treasury management, payroll, and financial statements. But incorporating these processes into your workflow can be time-consuming, cumbersome, and expensive.
Plus, the decentralized nature of DAOs adds complexity to making simple decisions like choosing a vendor or how much to pay individual contributors.
Working with DAOs over the last several years on their operations strategy has given me a peek under the hood of how successful DAOs operate.
Here are some key takeaways.
Implement effective treasury management: Establish clear internal controls for how DAO funds will be used and managed (e.g. how much ETH should be converted to stablecoins) and ensure that all transactions are recorded and tracked in a transparent and accountable manner. Check out this guide from Aragon to learn more about DAO treasury management.
Provide transparent financial statements: If you are able to create robust financial reports and projections, this will help the DAO best manage its treasury and drive revenue to the organization.
Create a magical onboarding experience for members: This will help with the recruitment of new members, increase engagement with DAO governance, and promote the DAO to high quality people. A few DAOs doing member onboarding right: Cabin, Krause House, and Seed Club.
Set up a fair and transparent payroll system: Establish clear guidelines for paying contributors, including the amount and timing. Create an internal system for tracking and reporting payroll expenses. Because of the decentralized nature of DAOs, you can also experiment with new payroll models such as Gift Circles with Coordinape.
Establish, evaluate, and improve processes: Regularly review and evaluate the DAO processes and internal controls, making changes as necessary to improve efficiency and effectiveness. This can include implementing new tools and technologies or refining existing processes in wallet management.
The bottom line: DAOs are a groundbreaking new type of organization — bringing people together around a common goal and granting ownership to those people. There’s no time like the present to establish a healthy DAO operations strategy to set yourself up for success over the long run.
📚 What we’re reading
Exploring Proof of Solvency
Chainlink wrote about the unique challenges of “proof of solvency” — a way for exchanges to prove their assets and liabilities on-chain — and how harnessing oracles could be the best way to operate these systems.
Learn more on the Chainlink blog
Progressive Decentralization: a high-level framework
Speaking of decentralized organizations, Jad Esber and Scott Duke Kominers from a16z recently wrote a framework for how centralized organizations can become decentralized over time. They suggest segmenting an organization into “minimum decentralized units” (MDUs) to align around how and what to decentralize.
Read about the framework from a16z
Congress creates the first-ever subcommittee to push crypto regulation
In order to create a clear legal framework for crypto assets, the U.S. Congress’ “first ever” subcommittee on digital assets was established as part of the House Financial Services Committee.
Listen & learn
🎧 Running your DAO with Megan Murray
How can DAOs scale their organizations intelligently and efficiently?
Megan Murray from ATX DAO joins the podcast to discuss how DAO leaders can thrive in their roles and take their DAO to the next level with confidence. Plus, learn how she manages a DAO with major IRL components.
Work in Web3
👾 Web3 Accounting Job Alert
Worldcoin is hiring an FP&A Manager to streamline its accounting functions and operations.
Apply to the job with Worldcoin
That’s all for now. Thanks for reading and I’ll see you next time.
Cheers,
Gil
Brought to you by Gilded 💡
This newsletter is strictly for informational purposes only and does not constitute financial, investment, or tax advice. As always, do your own research.
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