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, and the Policy Team;
  • Concrete steps to increase transparency and ensure accountability of DAO 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 that drive funding to climate action.

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 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, and the Policy Team. 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, enabling KlimaDAO’s long-term success.

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.

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.

* For a detailed breakdown of Core Team roles and responsibilities, process for onboarding and relieving members of the Core Team, and a description of how they are remunerated, please see KlimaDAO Core Team Roles & Structure.

Transparency & Accountability: In delegating decision rights to members of the DAO, we recognize the importance of transparency in maintaining trust. As such, DAO contributors will continue to provide regular updates and progress reports via office hours and Discord; where appropriate, quantitative indicators for performance will be made available to drive accountability and continuous improvement of the DAO (such as the weekly treasury performance updates we publish in the #metrics Discord channel).

Beyond that, there are a number of “quick win” opportunities we will implement in the near term to increase transparency and accountability for contributors at all levels:

  • Create a mechanism for contributors to share feedback about other contributors
  • Institute a process for the community to suggest the removal of a Core Team member or Functional Steward in the extreme event that they are not performing their duties or are abusing their power
  • Provide a quarterly community update to share information on core workstreams and in-flight projects across the DAO
  • Document how Contributors are compensated and publish monthly departmental budgets and contribution sheets (without exposing anyone to risk of personal identification)
  • Create a formal process for anyone to provide feedback or suggest changes or improvements to the KlimaDAO protocol or product
  • Publish a DAO wallet runway analysis

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.

This working group will be composed of Core Team members, Functional Stewards, Policy Team, Contributors, as well as select community members 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.
  • Implement appropriate accountability and transparency mechanisms.
  • Create a working group to research and develop a decentralization strategy appropriate for KlimaDAO.

Request for Comment: https://forum.klimadao.finance/d/48-request-for-comment-internal-governance-model-kip-19/65

Poll
For: formalize the status quo; create decentralization working group
Against: maintain informal status quo

Polling Period
The informal forum poll begins now and will end April 3rd, approx 15:00 UTC. Assuming in favor, this vote will go to Snapshot.

Internal Governance Model

This poll has ended.

I support this KIP aiming to further accelerate KlimaDAO's mission to fight climate change. Clear boundaries and responsibilities are important and formalizing them is vital. Perfect is the enemy of good and there is no perfect DAO structure. KIP-19 outlines appropriate steps to lay the groundwork for optimal decentralization without sacrificing the urgency of our mission.

1) When it is said Core is paid by “independent funding” how was this raised? I guess it was by selling pKLIMA? In that case, I wouldn’t call it “independent” since it is paid for by the dilution of Klimates. Since now on a more limited select number of Contributors will be retained with regular compensation, I believe it better aligns incentives for that funding to be allocated to the DAO wallet from which Core is paid as well. Then Core has the direct shared incentive to best manage the DAO wallet.

2) Since KlimaDAO is being managed like a startup now, like Hugh said and we need to “ruthlessly prioritize,” KlimaDAO time-bound KPIs should be published very soon. That’s the only way we can judge if Core or Stewards are not “performing their duties.”

3) If departmental Contributors’ compensation will be published (as it should), Core’s & Steward’s compensation should be included.

4) Staffing of the Decentralization Working Group should either be: (A) voted on entirely on by the community; or at least (B) each group votes for its own representatives.

    Voted in favor.

    I still think outlining some of what is NOT controlled by these centralized resources would be a huge benefit to both transparency and protecting the decentralized nature of a DAO.

    Presented as "Anything not specifically assigned to these members in NOT in their pervue. Some examples include, but are not limited to [insert some examples]" would be great.

    This seems even more important given the information conversation held when the last forum discussion was posted as no one seems to agree what a DAO is nor whether decentralization is important and, if so, how much and which pieces should be decentralized.

    I'd also suggest finding a more random way to add SOME members to the decentralization working group. As described, it will simply be a centralized group of the "in crowd." In my experience (running multi million dollar budgets, projects, and companies), even those with zero experience in a topic, or who you think might not be helpful often have the greatest insights. I've gotten push back against this my whole career, but it almost always gives great results (success depends on the ones running the group ensuring that it works well, so it's really a mark on the group organizers).

    In the end, I'm not too worried about it. I'd just like the price to go up and the carbon mission to succeed.

      After the latest office hours and the addition of some improvements to the proposal I'll change my vote to a "For".

      However, I'd like to see transparency further increased in the short-term, especially in relation to budgets and compensation of contributors. IMO there's no reason why this can't be done in the short-term, as opposed to the longer-term nature of the decentralisation process.

      I'm also very curious about the "independent funding and a multiyear runway" of the Core Team.
      Can anyone shed some light into where these funds come from without getting into specifics that can't be disclosed in public?
      Do they come from initial VC investment into the project? Personal funds from each member? Somewhere else?

      Overall I'm very happy with the process that followed the heated discussions going on in the forum and discord and I'm eager to follow the developments and be as involved as possible in the decentralisation roadmap🌲🌲 !

        Growthex good point, we considered including a clause like this in the KIP but didn't think it was necessary since we are delegating specific decision-making authorities that primarily impact the internal governance of the DAO contributors (not governance of the treasury or policy decisions). No new powers are being delegated to the Policy team, we're just clarifying the status quo powers that have been retained by the Policy team (some since launch, others delegated by previous KIPs).

        Something like this was what I was going to throw in, but thought it would be obvious based on the status quo:

        Only those decision making authorities specifically delegated within this KIP would be within the purview of the delegated groups if passed. Any powers not explicitly delegated (for example, adding new bond types, allocating treasury funds to strategic initiatives, utilization of yet-to-be-allocated DAO pKLIMA) remain subject to a KIP vote, until/unless a KIP specifically delegates those powers.

        Honestly I think we can slip this in as a disclaimer into the final KIP on Snapshot since it doesn't materially change the content of the KIP.

        vitalPixel glad to hear the difficult process of coming to consensus hasn't discouraged you!

        In terms of Core Team's funding model, I would encourage you to revisit this blog post outlining the role of pKLIMA in our ecosystem: https://www.klimadao.finance/blog/pklima-aligning-incentives-for-long-term-success

        This article also addresses point 1) of your comment @GolanTrevize - Core Team incentives are already aligned for long term success of KlimaDAO. Tying Core pay to the DAO wallet would only compromise the ability of the Core Team to carry the project forward if the DAO wallet were to run dry. Not to mention the fact that it would burn through the DAO wallet even more quickly, since that would mean 14 more contributors would be getting paid out from the DAO wallet.

        GolanTrevize to your other points:

        1) Addressed in my comment above

        2) Yes definitely, quantitative KPIs are important, but we want to be careful about falling into the trap of "what gets measured gets managed", so it's important we are thoughtful and deliberate about tying specific KPIs to the performance of specific individuals.

        We already publish top-level treasury stats on a weekly basis (CC, TTV, and MC/TTV) and we have an extensive set of Dune dashboards - so the question now is which metrics should be tied to which functions and how much should we weigh the quantifiable metrics vs. the un-quantifiable subjective value added by each contributor. Looking forward to detailed discussion of appropriate KPIs in the #governance channel in Discord!

        3) We will not publish exact compensation amounts for any contributor. This would be tantamount to doxxing their wallets. If individual contribs wish to share their pay, of course that is totally fine - but we will always make our best effort not to doxx anyone's wallet. However, as outlined in the revised text of this KIP, we will publish budgets for all teams that draw from the DAO wallet, as well as detailed spreadsheets of the value delivered and estimated hours worked for each contributor across all teams (like those Krian and I published for Policy and Engineering in Discord #general chat).

        Given the burden of leadership and the large number of workflows Core & Stewards typically are involved in, we will likely stick to general role descriptions like those we published for Core & Stewards in this KIP and for Core the detailed roles outlined in the linked document.

        However, since Core & Stewards will be responsible for giving the quarterly community updates, that will also be an opportunity for the community to get insight into what they have each personally been involved in. I'm also thinking we should go back to the scheduled office hours approach where we have one "guest" Core or Steward to share what they or their team are specifically working on in the past few weeks.

        4) I look forward to discussing the appropriate selection criteria for this in the #governance public chat. For the community delegates specifically, I'm very keen to source outside perspectives that have relevant experience scaling and decentralizing DAOs. I personally think it's important we set a high bar for inclusion on the decentralization working group to make sure everyone in the group comes with relevant context and expertise, and is committed to diligent research and thoughtful deliberation.

          MarcusAurelius thanks for your replies fren.

          For (1) speaking as just a KLIMA holder (aiming for network value and climate action maximization), this is the area that concerns me. Not specific against the Core or Stewards, but generally how accountability and incentives alignment are key ingredients for success. I’ve never heard of a startup where the Board or C-Suite is paid from a separate capital bucket. Sometimes it is even the reverse, where founders will pay employees ahead of paying themselves. To be the best steward of the DAO wallet, Core should tie their income to it. We will gain for the DAO wallet whatever the amount is (which no one knows) that was raised for Core via pKLIMA. Combined with contributor cuts, that will already extend the DAO runway to evaluate other fundraising options (non-dilutive NFT sale, dilutive VC raise, temporarily increasing bonding or offset fees, etc.). Over time as KLIMA becomes more valuable with larger volumes, funding the DAO wallet should be less of an issue. Right now is the time when we should be investing in people and initiatives to spin up the flywheel of adoption and network effects.

          I also note that no startup has succeeded in the conditions that KlimaDAO will now operate, nor MakerDAO or other earlier generation DAO examples the team gave in the last RfC.

          Startups and DeFi 1.0 protocols have doxxed teams, investors, advisors whose reputations are on the line. For a startup, the founders are directly overseen by an independent board with fiduciary obligations and shareholders with clear legal/contractual rights. They are funded progressively based on achieving certain GTM milestones and KPIs. The startup founders/employees are illiquid until success, either an exit or IPO. (And compensation of Board & C-Suite usually are approved by Shareholders & Board.)

          KlimaDAO doesn’t have any of that, and I understand pKLIMA can be redeemed based on expanding supply, regardless of network value or product/platform KPIs, and of course is then liquid. And apparently the anon Core can be funded for “years,” so that combined with this KIP-19, has total autonomy. Sure, the Core wants a higher value of KLIMA, but even for KLIMA holders to exercise last resort authority, we’d struggle to pass any KIP without Core / early investors’ support.

          Just keep all this in mind that KIP-19 requires huge trust in Core/Council without the normal checks and balances and optimal incentive alignment with which startups / crypto projects normally succeed with. Prudent management of the treasury is a condition of our success, but driving adoption of KLIMA is the necessity. I’d advocate that the DWG go ahead asap so like @Sirob wrote, we can unlock the creativity of the DAO as a network for us to succeed, rather than relying on a flawed startup model for our situation that seems like fitting a square peg in a round hole.

          For (2) while individual KPIs are always best (and I hope given the new centralized stucture the DAO would implement them), I think given our new approach DAO-wide KPIs are needed for both the “Product” and “Platform.” There are some natural candidates here, so look forward to what the DAO leadership proposes.

          For (3) I had understood from this revised KIP-19 text, each department of contributors collectively (not individually) having their compensation published. Why is the Core excluded from that? Even if Core for now isn’t paid directly from the DAO wallet, they are paid from the pKLIMA fundraise it seems, so that’s coming from the value of the DAO?

          For (4) okay with setting qualifications affirmed by the community, ideally so long as they’re not too exclusionary. To make sure we recruit the best of the community, I’d suggest the community DWG members are paid in KLIMA for their work.

          Wish you best of luck 🍀 🌳,🌳

          Real structure is needed just like any organization. I want to see this company grow in the right direction for the next 2-10 years and that can only happen with the people internally running it efficiently without hang ups. Crypto moves fast as some stated earlier and this is everyone’s money we are dealing with so I would want decisions made internally to prolong klima.

          Road never flat do our best never get more.I support this KIP,

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