KIP-19 defined KlimaDAO’s Internal Governance Framework and led to the setting-up of KlimaDAO's Decentralization Working Group (DWG). The working group was included as a proposal within KIP-19 in response to concerns from KlimaDAO contributors, expressed on the KIP-19 Forum RFC, that proposals included within the draft KIP could compromise on principles of decentralization in terms of the way work within the DAO would be managed.
Per the passage of KIP-19, the DWG is responsible for developing a “decentralization strategy” for KlimaDAO. The enclosed report is the first output of the DWG’s work. It includes an analysis of the DAO’s current state of decentralization, as well as recommendations on low hanging fruit implementations that could augment its current state. The DWG will issue a second report by the end of 2023, detailing a more assertive opinion on – in the DWG’s opinion – how, and to what extent KlimaDAO can pursue further decentralization.
KlimaDAO Community members are welcomed to feedback on the report and its recommendations during this comment period, before a finalized version of the report is issued on 11th May 2023.
Immediately after KlimaDAO’s launch, the way that work was organized within the DAO had little oversight or input from the Core Team with high-levels of self-organization able to take place; the initial internal governance framework of the DAO could perhaps be characterized as “decentralized”, but equally so it could be described as simply “disorganized”.
Nevertheless, in early 2022, KlimaDAO began to quickly iterate towards product market fit, launching its Retirement Aggregator, Klima Infinity programme, establishing partnerships, and ideating around how it could drive adoption of the techstack it was developing for the Voluntary Carbon Markets.
A number of challenges emerged internally within the DAO during this period:
- The inefficient allocation of resources within the DAO.
- Low levels of accountability across contributors to the project.
- Lack of coordination across and within departments.
- Personnel issues with no clear pathway or authority to resolve disputes.
In parallel, a shared perspective within the DAO on how the project should approach the market began to emerge. This was against a backdrop of an increasingly competitive market within the crypto-carbon ecosystem, as a number of VC-backed start-ups entered the space, and actively began to counterposition against KlimaDAO.
KIP-19 was therefore proposed to the Community by department leads and the Core Team to improve the DAO’s overall performance. KIP-19 was ratified on 7th April 2022. Since KIP-19, KlimaDAO has significantly optimized its operations, shipping a number of key products and platforms, not least Carbon Dashboard and Carbonmark. It has simultaneously drastically reduced its burn rate.
Some DAO Contributors responded to the KIP-19 RFC with concerns, primarily that if successful, the Proposal could compromise on decentralization in terms of the way that the project manages its operations. These concerns were judged by others within the DAO to be legitimate and valid for any project that labels itself as, or aspires to be, decentralized.
Therefore, as part of the KIP-19 Snapshot proposal, the Decentralization Working Group (DWG) was set-up to evaluate not only the DAO’s newly ratified Internal Governance Framework, but also explore what decentralization could and should mean for KlimaDAO in a broader sense, with a mandate to develop a decentralization strategy for the DAO.
At the most fundamental level, KlimaDAO is a decentralized project that is required to interact with “off-chain” stakeholders and Real World Assets – a dynamic which creates a complex and challenging operating environment. It is at the centre of one of the hottest market segments (sustainability and blockchain), and faces significant competition across the globe from both ReFi and beyond. KlimaDAO must plot its path into the future carefully and deliberately, and that includes its pathway to decentralization.
The DWG is responsible for evaluating and deliberating KlimaDAO’s pathway towards decentralization, informed by the project’s overall vision and progress.
The report enclosed below is the DWG’s initial findings and analysis which it is presenting to the Community, for discussion and feedback.
The initiatives recommended within the report are considered actionable within the scope of the Internal Governance Framework defined in KIP-19 (i.e. no token vote is perceived to be required to implement any of the recommendations or to ratify the findings of this report).
- The DWG welcomes DAO and Community members to review and comment on the report in the comments section of this RFC.
- On 4th May 2023, the DWG will then hold an Office Hours session to discuss the report with interested Community Members and DAO contributors.
- The DWG will incorporate relevant feedback into the report and publish a final version of this Interim report on 11th May 2023.
- The DWG will issue another report in 2023, guided by the DAO’s overarching strategy, with greater assertion on its view of how, why, and to what extent KlimaDAO should (further) decentralize areas of the protocol.
Note: The DWG consists of self-selected DAO Contributors, as well as Community Members nominated via public vote. Individuals interested in participating in KlimaDAO’s DWG are welcome to express interest in participating within the group, and/or to listen-in to public bi-monthly meetings hosted in Discord every other Friday at 2pm UTC. The DWG’s Terms of Reference can be viewed here.
Link to Report