• General
  • Request for Comment: Internal Governance Model [KIP-19]

Summary

Formalize the roles, responsibilities and delegated decision authority of DAO contributors to improve our ability to execute on KlimaDAO’s product and platform strategy.

In the sections below, we outline:

  • Context for the proposal, including a brief explanation of the challenges facing the DAO, and the key strategic initiatives we are currently pursuing;
  • An articulation of the roles, responsibilities and delegated decision authority for key individuals within the DAO, including Core Team, Functional Stewards, the Policy Team, and Internal Contributors;
  • A proposal to establish a working group dedicated to building out a decentralization roadmap for the DAO.

Context

The broader organization of individuals involved in contributing to KlimaDAO’s development (the “DAO”) started on October 13, 2021. At this time, community members looking to get involved were invited to join the Contributor Discord server and to find ways of adding value. This self-guided approach led to a large number of contributors joining the DAO in a very short timeframe, and eventually, a functionally-oriented structure organically emerged with individuals assuming different roles and responsibilities across the team.

In the months that followed, the DAO began experiencing growing pains as a result of its informal ways of working, particularly in regards to how work gets done, and how decisions get made within the context of a fully-remote and distributed team. These issues were primarily driven by the difficulty in coordinating a large number of contributors without the processes and systems in place to support them, and the lack of an internally agreed upon framework for how the DAO should make decisions and act to balance the competing needs of quality, transparency, risk, decentralization and speed.

Over the same time-period, however, the market opportunity and strategic goals for KlimaDAO have become increasingly clear. The goal for KlimaDAO is to create an asset-based reserve currency to accelerate the growth of ReFi and to provide transparent and frictionless access to the carbon market; the goal of the Klima Infinity Product is to improve accessibility and create value for various ecosystem participants through SaaS-style distribution and world-class product experiences.

Like any early-stage venture, the ability for KlimaDAO to move fast and execute with a high-degree of excellence is paramount. However, there is often a tradeoff between making a decision quickly versus making a decision that the majority of people agree to. As an early stage Web3 venture, KlimaDAO needs to balance this tradeoff as it finds its way to product-market fit.

Note, a brief description of our Product and Platform strategy can be found here.

Roles, responsibilities and delegated decision rights

In this section, we outline the responsibilities and delegated decision authority of key roles within the DAO, namely the Core Team, Functional Stewards, the Policy Team and Internal Contributors. The roles outlined below establish and formalize the existing practices within the DAO that have been in place since launch.

Core Team

  • Responsible for executing on KlimaDAO’s strategic vision, and interfacing with external participants (e.g. governments, standards bodies, etc.) to develop and expand the ReFi ecosystem.
  • Delegated decision authority includes recruitment and removal of contributors and functional stewards, approving operational budgets, approving operating model changes, approving compensation structures, and setting legal strategy.
  • NOTE: at the time of writing, some Core members also happen to be Functional Stewards. A listing of each Core member’s role will be published soon.

Functional Stewards

  • Responsible for interfacing with the Core Team to translate strategic vision into actionable projects and work streams; and working with internal and external contributors to execute projects and work streams against proposed budgets, timelines and quality expectations.
  • Delegated decision authority includes defining roles and responsibilities of contributors within their functional team, proposing new internal and external contributors (i.e. recruitment), and proposing operational budgets for their team, as well as cross-functional projects they own.

Policy Team

  • Responsible for economic modeling and formulating monetary policy for the KlimaDAO Platform.
  • Delegated decision authority includes putting forward KIPs related to treasury monetary policy (e.g. enabling bonds for new assets, allocating treasury funds, adjusting policy parameters such as reward rate), determining minor reward rate adjustments if realized rewards vary significantly from KIP-specified targets, vetting new carbon assets for inclusion in the retirement aggregator, and adjusting bond capacities.
  • NOTE: some of these powers have been formally delegated to the Policy team in previous KIPs.

In delegating decision rights to members of the DAO, we recognize the importance of transparency in maintaining trust. As such, we will continue to provide updates and report on progress, and where appropriate, indicators for performance will be made available to drive accountability and continuous improvement of the DAO. Beyond this, the DAO will explore additional ways to improve transparency

Decentralization roadmap

While this proposal optimizes the DAO for our short-medium term needs, we also propose that an internal working group be established, tasked with developing a recommended decentralization strategy and roadmap over the medium and long-term. The deliverable of this working group will be a report and set of recommendations, but subsequent KIPs will still be required to implement any proposed changes as and when required. The scope of this project will be defined within a working group composed of members of the Core Team, Functional Stewards, Policy Team, Internal Contributors, as well as select members of the community with demonstrated expertise in decentralized governance. The working group participants and objectives will be established in Q2 2022 within the DAO Contributor Server.

Proposal

Formalize the roles, responsibilities and delegated decision authority of DAO contributors to improve our ability to execute on KlimaDAO’s product and platform strategy. Create a working group to research and develop a decentralization strategy appropriate for KlimaDAO.

Poll

This poll has ended.

    I am in opposition to this proposal as I believe it is an attempt at centralization. By choosing to form as DAO, I believe that Core is under an obligation to work within that organizational framework. Proposing to grant themselves broad powers now is antithetical to Web3 and the problems it is trying to solve.

    I'd like to zoom in on one bit in particular under the Core Team's "Roles, responsibilities and delegated decision rights:"

    Delegated decision authority includes recruitment and removal of contributors and functional stewards, approving operational budgets, approving operating model changes, approving compensation structures, and setting legal strategy.

    1) "recruitment and removal of contributors and functional stewards"
    I don't think Core is best placed to make these decisions. As a contributor I didn't work with core very much, but I did with my co-workers all the time. Addition/removal of contributors and leads should be done by vote of those in that department. At least, that would be a decentralized way.

    2) "approving operational budgets"
    This is very broad and without duration. As an investor in the DAO, I would not consent to this without a clear plan for accounting and transparency. There would also need to be accountability for the strategical decisions made with the operational budgets.

    3) "approving operating model changes"
    This is a little vague, but it reads like any further changes like this would not need a KIP, but would be at the discretion of Core. What beneficial objective is served by taking this power away from voters and bestowing it on Core?

    4 ) "approving compensation structures"
    Again an area where a lot more transparency is needed, as well as strict rules about how and when hiring happens to avoid any appearance of impropriety.

    5) "setting legal strategy"
    Legal strategy is hugely important and some secrecy and centralization may be warranted here. Ironically however, I fear that the centralization plan laid out in the points above would only make KlimaDAO more vulnerable legally, with a clear center to aim at. And will most certainly make calls for Core to dox louder with all these newfound powers.

    I believe we should continue to operate as a more decentralized organization. I believe we should allow community vote to retain its right of checks and balances on the Core. Thank you.

    I can say from experience clearly defined roles and responsibilities is a plus in any organisation. It increases the efficiency and will reduce the time to implement enhancements to KlimaDAO. In a fast moving environment like crypto time is money.

    Just adding the comments from the previous post here

    • vanisle_kahuna - I think this is a fantastic direction for us to move forward as a DAO. I'm looking forward to the innovations in organizational structure and leadership that we'll be one of the first pioneer in the coming years!ReplyLike****

    • Operatingcan - I think that the DAO has shown high levels of commitment to transparency as well as the mission that we're all here to support. I'm all for delegating responsibilities for the sake of efficiency. I have some ancillary concerns.

      • Will functional stewards be in charge of recommending contributor removals?
      • 1a. Will they have any sway if they and the corresponding core member disagree?
      • 1b. Are there rubrics published to ensure fair judgment of contributors before a dismissal?
      • 1c. Do we need to implement a system similar to a severance package for those who are dismissed?
      • I think an org structure should be maintained so that we are always aware of recruitment and dismissals. This feels like vital information IMO.
      • I have no accurate way to evaluate the output of the DAO as an entirety because I don't have insight into how much each person is getting paid (for all I know, everybody only does 15h/wk). As we delegate trust to the contributors of the DAO, I feel we need better transparency into how much is being paid.
      • -Similarly, I don't see any mention of budgets or headcounts and who manages them. I would love for this information to be delineated and ideally published.
    • Growthex

    • I think it's great to delineate roles and responsibilities. Sounds like a pretty centralized thing to do ;-) It's imperative for everyone to know who has authority to make which decisions. It protects those making decisions because they know they have that authority, and it protects the DAO because random people should not be making key decisions if they are not so authorized.

    • I think it would be great to have a list of things that are NOT controlled by these centralized controllers. This list would obviously be incomplete since anything not specifically delegated is NOT allowed by the centralized controllers. But only giving this list makes it look like this is an entirely centralized operation.

    • Also, what are the requirements to achieve one of these positions, number of positions, and budgets. Are you spending 100% of income on salaries and tech? Or is it 1%? Or what? Seems like publication of the info from Core Team would be appropriate.

    Most if not all DAO contributors agree that some level off reorganization would be greatly beneficial, but there is concern that if this is not done in a democratic fashion with balances and safeguards, this would lead to a lack of accountability for central DAO operators. This in turn could lead to serious and even existential problems going unchecked later if decentralization processes are stalled as the DAO matures.
    Historically, power is rarely dispersed easily once it has been consolidated, and that power corrupts. If this is truly a Decentralized Autonomous Origination defining safeguards for decentralization is just, if not more important, than defining centralization.

    1. I believe any KIP that proposes formalization of the DAO structure should include a roadmap for decentralization in that KIP, not to be defined later.
    2. There is some mechanism for of accountability for top power holders in the DAO such as elections or votes of confidence.
    3. Working groups should have the right to elect the leaders of that working group.

    I believe it is possible to centralized enough to be efficient and competitive as well as maintaining a decentralized, or at least democratic culture. In the long term decentralization needs to be protected in order prevent human failing later on, especially in an environment such as DeFi where there are not external accountability measures.

    If we are a DAO, but you believe that we need more rapid decision making, let’s agree to remove the requirement for KIPs for everything, and only use KIPs for a predefined risk or value measure, and all else can be by rapid polling period. 12 to 24 hours is enough time for those invested and active to vote on small impact items.
    I don’t disagree about structure though. If you feel like we need to have job titles and departments, go for it. If a decision affects a particular department only, weight that department’s voting power for larger impact.
    I vote not to become more centralised than we already are. Let the community decide everything, and weight votes when required. Do a KIP vote for anything over a certain risk or financial value.

    During KIP-14, I commented that I believed Resilience Mode was the next stage needed for the evolution of KlimaDAO, in part because it enables the contributor team to run like a lean startup.

    Now that Policy has executed on KIP-14 with protocol adjustments, I see KIP-19 as a way for Operations to fulfil their own contributions to meet the goals we set out with Resilience Mode.

    When I joined as a contributor in December, one of my first observations was that we need to incorporate more lean startup best practices in order to increase the quality of our outputs, and thus the value that we deliver to KLIMA token holders and the Klima ecosystem as a whole.

    Several thought pieces also came out around this time (e.g. Joseph Delong's Case for Hierarchy in DAOs) that further bring attention to how important it is to have good organizational structure and principles.

    KlimaDAO is out of its infancy in the Discovery phase, and driving forward towards Adoption. To best equip contributors to succeed in this phase, we need to professionalize and mature as an org. KIP-19 is the way to achieve this.

      rittaaka

      I would argue that hierarchy does necessarily not lead to leaner cuts, but only more cuts to workers that are father away from the discussion making process. I personally have willingly taken a cut in allocation because I believe it reflects the best interest in the DAO, in this market. By consolidating the decision making process to a few individuals, they then have little incentive to cut their own compensation accordingly, especially if there is little to no transparency.

      Rome did not fall because the foot soldiers were getting paid to much.

        Honestly I hesitated to write this. It's evident in the Contributor Server from the lack of a widely inclusive and transparent preparation of this KIP; the sudden nature in which it was revealed to us (barely 1 week ago); and the absence of objective data warranting this KIP, I regret the Core & Council's agenda is to pass this KIP no matter the reasoned objection. Should it pass, I chose not to continue contributing in KlimaDAO (for reasons explained below). But if we dissenters don't speak up, I think we are doing a disservice to the community, and if Core & Council won't listen to us, maybe they will listen to you.

        I love KlimaDAO. I've been neglecting my IRL job for a few months, working mostly 7 days a week. I've been so impressed at the positive contributor work culture; how much talent and energy there is; and how relatively organized and efficient we've been as a mostly self-managed DAO. But don't take my word for it: in debriefing with Eco, their number one feedback was how blown away they were at our professionalism, organization, and delivery.

        You may or may not know the DAO is currently organized in several "departments", including Engineering, Policy, Operations, Partnerships, Marketing, Creative, and Community. Each of the departments have leads, and most all the departments are broken out into areas of focus, which ordinary contributors have taken subsidiary responsibility for. Most of the departments also have weekly syncs/agendas, KPIs, project management systems, and work flow processes in place. This was all achieved organically and consensually. Frankly, its natural emergence was inspiring in both its relative smoothness and effectiveness.

        All material decisions at the moment go to the community for approval. Internally the groups decide collectively which these include (apart from those that come from the community). And we continue to ship, whether its several partners signed up to KI and in the pipeline; one marketing & creative campaign after the other; a new website, offset dApp, and beta climate dashboard; community events and bounties; and policy that is among the best in Web3.

        KIP-10 set out the historical compensation expenditure for contributors, along with average and top earners. For now, ordinary contributors' compensation are decided by their department leads estimated based on their monthly work portfolio, although any contributor can discuss with their lead if their pay hadn't aligned with expectation. Ordinary contributors' pay was published inside the Contributor Server last month, although the Core's and Council's are yet to be disclosed.

        So this is all to say, the DAO is organized, we have a strong culture, and we get stuff done at high quality. And this has all manifested on a relatively decentralized basis. I think that's beautiful.

        Suffice to say, a number of contributors are scratching our heads why do we need this KIP-19? It's not because we're disorganized or inefficient.

        Hugh wrote that we need to find product-market fit. Great, we are all for that! He linked a description of our Klima Infinity goals, which can go for a dedicated KIP and delegate the discretion to Product to develop and iterate.

        Unfortunately, there is no reason for this KIP as is, which is too vague without empirical justification. It passes far too much authority to the Core & Council, centralizing KlimaDAO into what will essentially become a company (aka KlimaCorp). But with less compensation to attract talented contributors, less accountability by the new "Board" and "C-Suite", and increasing risk of contributors' personal liabilities instead of limiting them & failing the Howey Test (i.e. whether KLIMA is a security). And contributors lose the independence and agency that brought us together and gave the DAO our creativity and dynamism. We should be lowering barriers in the DAO, not stratifying it further.

        Left unsaid in this KIP anticipating its newly gained powers is that a number of contributors are already being suddenly cut without real explanation or prior warning. These include people who left their jobs encouraged (by Core/Council) to come work full-time for KlimaDAO. The operating budget had mostly been overseen by Core & Council and last month we came close to a DAO wallet runway (used to pay contributors/advisors, seed liquidity, etc.) of less than 2 months. Putting the DAO first, these difficulties if anything show we need to devolve recruitment/compensation to the contributor teams, who themselves should be empowered to prepare quarterly budgets to propose for the validation of the community.

        I joined KlimaDAO to drive forward climate action and democratized coordination. We do not have to sacrifice the latter to achieve the former.

        Accordingly, I am voting against this KIP-19 and suggested it be broken out into:

        1) Validation & delegation of Klima Infinity product go-to-market
        2) Immediate & long-term plan to improve DAO wallet runway
        3) Endorsement of mission, vision, values for KlimaDAO
        4) Detailing KlimaDAO working organization & governance

        in that order with a reasonable few months' pre-defined & consensual timeline.

        I would also form a governance council responsible for shepherding this through with equal representation from Core, Council, Ordinary Contributors, and Select Community Members, with as much of the work done in public as possible.

        In terms of hierarchy/prioritization of stakeholders in preparing 1-4 above, to me we should prioritize: 1) Community; 2) Contributors; 3) Investors; 4) Partners; 5) Public Good (I realize 1 & 3 have overlap, but Community I'd define as active Klimates, versus 3 are more hands-off speculators).

        Long live KlimaDAO! I love you all, and it's been an honor contributing to the DAO. Thank you for the opportunity <3.

        P.S. I would post to the public KlimaDAO Discord for the community's information the recordings of the Contributor AMA calls discussing the reorganization document leading up to this KIP-19.

        P.P.S. For full disclosure, until last week, I was proposed (although not yet formalized) to join Council for Partnerships, so am not opposing this KIP having been among those planned to be "let go", but on merit and principle, in that it'd make the DAO more fragile rather than resilient.

          rittaaka you are quoting the (controversial) former CTO effectively pushed out from Sushi, who I think is among the last people our DAO should take advice from. Sushi succeeded initially because it was community first, whereas Uni was centralized. Then the Core of Sushi (old and new members) gradually centralized powers, and increasingly Sushi became more erratic, shipping various products scattershot. Eventually Sushi contributors started speaking out, despite alleged silencing and repercussion internally for doing so (like bullying, reduced pay, and/or getting fired), while Sushi Core became more secretive and accrued more compensation. Finally, large VCs like 3AC and Alameda dumped SUSHI after 0xMaki left and its network value crashed, having not recovered since, and I understand some/other Sushi jumped ship.

          If anything, Sushi is a cautionary tale of what not to do!

            pitbullish I am working as a foot soldier, and I want to be rewarded according to the impact of my output.

            My output will become more impactful when I am able to work in a focused environment, that is enabled by good organizational structure.

            The Roman army was so effective specifically because of the organizational structure and hierarchy that enabled it to run as a machine.

            I think KlimaDAO contributor org should be meritocratic. I believe Core should also get more benefit of trust to uphold the meritocracy based on how the org has evolved so far.

              GolanTrevize That’s a straw man argument, could pick any other one of thousands of case studies and examples to illustrate why good, moderately hierarchical organisational structure leads to the best outcomes in accelerated, high impact org building.

              Fundamentally I believe in progressive decentralization, we should not get ahead of ourselves in considering how early and small KlimaDAO is when looking at the overall roadmap and vision.

              rittaaka

              I don't know how it is in your working group, but many of the road blocks at that me and my peers have faced are because of people who got into the DAO before us telling us we could not do initiatives.
              One example of that was Poker Night, the Community team was told by someone, who had no proven credentials and was only in a position of power because he got in earlier than the organizers of the event, not to do the first Poker Night. We did anyway, it was a smashing success and was the foundation for much community and partnership building to this day.
              The folx that pushed that initiative showed more merit IMO. For meritocraticocracy to work there needs to be an even playing field.

              Rome may not have lasted last long as it did if the army/workers did not challenge the satus quo once or twice.

              BTW the tag lines one the voting options are clearly bias. In a fair election it would just say For/Against without any connotation. Saying "maintain informal status quo" is misleading. I would like to see a new system based on actual meritocracy.

                rittaaka if you are for meritocracy, you should be against this KIP. This is aristocracy “straw manning” superior efficiency (like all authoritarian org), and it’s misleading our community if not false that what is described in the KIP is at all the status quo. Management of the DAO should be determined openly bottom-up, starting with our community at the center, not exclusively top-down by an illuminati at its head.

                If BTC & ETH modeled their protocol governance on 2,000 year old empire and 100 year old industrial organizations, they would have utterly failed. We are a network, not a government or business

                  GolanTrevize hmm I think the proposed model is anything but authoritarian. Core itself is extremely diverse with 10+ members, who are holding themselves accountable to the 2 other leadership groupings (policy and the functional stewards). The KIP framework also remains in place.

                  I see this on the flip side: this new model shields contributors from unstructured workflows, conflicting priorities, and burnout.

                    I have quite similar concerns about this as others and I don't even know which option to choose.
                    I'm all for the formalization of roles, responsibilities, I'm interested in the discussion about delegating decisions.
                    But this RFC includes one solution as well which I'm not in favour of, so I'm going to vote against.

                    I haven’t work for the DAO even though I applied. I feel clearly defined roles, projects, tasks and timeframes are entirely a good thing. If contributors or ‘employees’ are underperforming and underdelivering then it makes sense for higher responsibility contributors or ‘managers’ to be able to review this and make a decision on those team members futures. That’s in the interest of the community as a whole for efficiency and growth. The DAO model is a great one but I have noticed a lack of transparency in tasks, clear definitions and accountability. It’s idealistic at present. Again, emphasise on a great model but needs some tweaking. Organised management and people with a higher level of responsibility/weight still remaining within a decentralised architecture doesn’t seem like a bad thing. And appreciate this has been put to public discussion and vote.

                    GolanTrevize If BTC & ETH modeled their protocol governance on 2,000 year old empire and 100 year old industrial organizations, they would have utterly failed. We are a network, not a government or business

                    ETH and BTC don't have protocol governance as you say. Why is this? The governance system (or lack there of) was designed to support the intended purpose of the platform: providing a neutral layer 1.

                    What is the purpose of Klima? To accelerate decarbonization in an effort to combat climate change. Its very nature is a goal which one could argue is not neutral in nature. Klima is a protocol built on the application layer that is biased towards an outcome.

                    Comparing these two is rather akin to comparing apples and oranges, particularly when you leave out inconvenient details like how tight the purse of the Ethereum Foundation was/is and how many have argued this would kill Ethereum. I am here to tell everyone that Ethereum is in fact not dead today.

                    GolanTrevize and it’s misleading our community if not false that what is described in the KIP is at all the status quo.

                    I strongly disagree with this statement and denounce your accusations of deceit.

                      ChazSchmidt

                      This is not deceit to say that adding headers to voting option is creating a biases, I learned that in middle school. I denounce your denouncement of deceit. Please don't call people liars, some of use are trying to have a civil debate here.

                      Eth and Klima both have goals and governance, I fail to see why this argument is relevant. TBH Eth is far more successful and decentralized than Klima. Please elaborate on how KlimaDAO can better reflect the Eth governance model, there may be some insight on how to resolve this contention in this discussion.