Request for Comment: Should DAOhaus drive value to $HAUS by giving UberHaus loot shares in every V3 DAO

[spencer]

tl;dr

This post requests comments and feedback from the DAOhaus community on a conceptual proposal for how UberHaus might enable and drive value to the UberHaus treasury and the $HAUS token.

In short, the proposal would…

• give UberHaus a small percentage of loot shares in all DAOs summoned on/via DAOhaus V3, where
• the value of those loot shares for a given DAO would only accrue to UberHaus if that DAO decided to make their loot transferable

In my view, this approach to $HAUS value accrual and DAOhaus sustainability has strong alignment with the goals and values of the DAOhaus community.

Context and Background

This post is a repackaging of content originally posted for discussion within the Warcamp forum. Please see that post and responses for additional discussion.

DAOhaus Mission & Objectives

Together, we in the DAOhaus community envision a future where any community can fulfill its collective purpose while reinforcing the full sovereignty of its individual members.

To bring about this future, our collective mission is to build cultural and technological tools empowering communities to coordinate in that manner, and to make those tools available and accessible to as many people and communities as possible.

This implies two simultaneous objectives:
(i) Our basic DAO coordination tools should be permissionless and free to use

(ii) DAOhaus development and innovation must be self-sustaining so that we can make our tools even better and usable by more people

Transferable Loot in Moloch V3

In the new Moloch V3 DAO contracts – which is what DAOhaus V3 is built on – shares and loot are each ERC20 tokens. DAOs can turn on (or off) transferability for each of those tokens.

This proposal draws on the ability to turn on transferability for loot.

I expect that most DAOs will keep transferability turned off to mirror the dynamics of Moloch V2 and all the benefits that brings, but some DAOs will choose to turn on loot transferability for one or more of the following reasons:

• To raise funding to support their purpose
• To create a liquid market for non-voting economic stake in their DAO
• To enable anybody to participate in the value created by their DAO
• In place of launching a custom token
• And likely other reasons not listed here or that we can’t predict yet

A key thing to note is that DAOs that make this choice are explicitly choosing the introduce a financial component to their DAO, which is a step about our basic DAO coordination tooling.

Proposal Overview

Mechanics

The mechanism is relatively simple:

• A) For every DAO launched from the DAOhaus V3 summoning factory, UberHaus would receive X% of the total shares (shares + loot) created in that DAO as loot shares

• B) The X parameter would be initially set to zero, with DAOhaus governance (i.e., UberHaus) having the authority to adjust it over time

• C) If/while those loot shares remain non-transferable, UberHaus cannot feasibly do anything with them

• D) But if/when a DAO turns on transferability for loot, those loot tokens would be controllable by UberHaus

Illustrative example:

0. UberHaus governance has set the `X` parameter as 1, i.e. 1%
1. New DAO is summoned in DAOhaus V3
2. At summoning, 100 shares are minted to members => UberHaus receives 1 loot shares
3. A new member joins, receiving 10 shares => UberHaus receives 0.1 loot shares
4. The DAO turns on loot transferability and the loot tokens end up with a market price of $10 => the value of the UberHaus treasury grows by $11

Potential Implementation

Mirroring the relative simplicity of the mechanism, this approach would also be fairly straightforward to implement:

• Add logic to the baal.mintShares and baal.mintLoot that mints an extra X% in loot to the UberHaus treasury (or vault)
• Read the value for this X parameter from the DAOhaus V3 summoning factory
• Add an “owner” role in the DAOhaus V3 summoning factory that has authority to change the X parameter, and set it to UberHaus

The most difficult aspect to figure out would be the multi-chain mechanics, though this is about to get easier with the Zodiac Nomad cross-chain module.

Implications and alignment with community objectives

In this section, I do my best to enumerate the implications of this proposal and how they align with the Objectives from the first section.

I am almost certainly missing something, and that’s what this post is for! Please respond to this thread with any missing considerations you identify.

(1) Summoning a new DAO would remain free of charge, in alignment with Objective (i).

(2) Using a DAO on DAOhaus – including making and voting proposals, managing treasury, etc – would remain free of charge, in alignment with Objective (i).

(3) All DAOs would continue to have full access to all funds in their treasury and vaults, in alignment with Objective (i).

(4) It’s worth reiterating that there is no fee, per se. Value that accrues to UberHaus and the $HAUS token is a reflection of the underlying value of the DAOs’ loot shares, not an extraction of funds from DAO treasuries.

(5) Exit value for individual members of DAOs would be discounted by slightly less than X%. Unless X were set too high by UberHaus governance, this discount would be highly unlikely to meaningfully change the game theory or behaviors relating to ragequit from, and therefore tribute into, a DAO.

(6) DAOs that turn on loot transferability would face the possibility that X% of their loot could be ragequit – e.g., if UberHaus were to sell their loot on a DEX. But this would be the exact same possibility as with the rest of their loot, which would also be fully transferable and liable to be sold at any time.

(7) Value would accrue to UberHaus and the $HAUS token in proportion to value that accrues to DAOs on DAOhaus. In other words, UberHaus and $HAUS succeed when DAOs succeed. This is a strong alignment of incentives for success – and in alignment with Objective (ii) – and creates a lot of opportunities for driving further alignment among key DAOhaus ecosystem stakeholders via strategic distribution of the $HAUS token.

(8) DAOhaus would have a direct incentive to support other projects in building on, composing with, or integrating with DAOhaus infrastructure. Since every additional DAO summoned via the DAOhaus factory – regardless of what user interface that DAO uses – adds to the total expected value of the $HAUS token, it behooves DAOhaus to make that as easy as possible and to promote a wide variety of user interfaces (the better to address the unique needs of diverse segments). This is in strong alignment with Objective (i).

In the absence of this approach, on the other hand, DAOhaus might face a perverse incentive to make it more difficult, either to drive more demand for revenue-creating custom B2B services or to “protect” its user interface “moat”.

(9) Any project that builds on or composes with DAOhaus infrastructure (as in #8) would be giving their users access to all other tools built on or integrated with DAOhaus. This taps into the power of open infrastructure and web3 composability, and also creates a flywheel that makes DAOhaus more valuable for everyone. This is in alignment with both Objectives (i) and (ii).

(10) That said, no DAO or project would be locked in to using DAOhaus. The Moloch code and DAOhaus code would remain fully open source and fork-able.

(11) This approach would drive engagement in UberHaus governance and potentially demand for the $HAUS token, since the value of the X parameter would be of great interest to all stakeholders in the DAOhaus ecosystem. In fact, it’s possible that even if X were to remain at 0, $HAUS could still grow quite valuable. This aligns with Objective (ii).

(12) This approach to value accrual is fully compatible with other such mechanisms, including (B2B) services, fee-split agreements with projects building on DAOhaus infrastructure, curation w/ the $HAUS token, and even boost- or services marketplace fees. This creates maximum flexibility for DAOhaus’ ability to fulfill Objective (ii).

Comments Requested!

This concept is not yet ready for official proposal. This post is a request for comment, aiming to gauge sentiment on the idea and serve as a venue for feedback and discussion.

Please leave your feedback!

Here are a few prompts to get you started:

• Do you agree with the DAOhaus ecosystem objectives outlined in the first section?
• Do you understand the mechanism as outlined? Does anything need to be clarified?
• Do you disagree with any of the outlined implications?
• Are there any additional considerations, implications, or risks that should be considered?
• What’s your favorite ingredient to put in a burrito?

[a_sos]

I want to start by saying that I both (a) really like this idea, and (b) am happy that this proposal and discussion are taking place. I think finding a way for DAOhaus to drive $HAUS token value and even charge for the services is a huge net positive. In many cases, charging for a service forces users to become more active with the service.

I’m going to try to both support and challenge as much as I can about this proposal to make sure it’s a full discussion.

@spencer

B) The X parameter would be initially set to zero, with DAOhaus governance (i.e., UberHaus) having the authority to adjust it over time

This to me is the strongest point and key to the entire proposal. What’s being introduced here is a self governing mechanism for self funding. The HAUS token holders (in theory the users) now get to determine the amount that they’re paying for the platform they’re using.

In theory this also does create a scenario that the holders continuously vote for the fee to be 0%. But the counter would be that this would worsen DAOhaus services until UberHAUS voted to turn them back on.

Is there a general consensus on what the fee should start at?

[quote=“spencer, post:1, topic:11129”]
D) But if/when a DAO turns on transferability for loot, those loot tokens would be controllable by UberHaus
[/quote].
What happens when DAOhaus now controls these tokens? Will DAOHaus sell them or hold them?

• In either scenario, I’d propose this means someone on DAOhaus needs to act as a CFO/goblin (is that what we called it in RG) and do treasury management. Do we want to be holding the bag? When DAOHaus needs funds, which tokens are decided to be sold first?

@spencer

(9) Any project that builds on or composes with DAOhaus infrastructure (as in #8) would be giving their users access to all other tools built on or integrated with DAOhaus. This taps into the power of open infrastructure and web3 composability, and also creates a flywheel that makes DAOhaus more valuable for everyone. This is in alignment with both Objectives (i) and (ii).

While I agree, I don’t see how this pertains to this proposal.

[spencer]

@a_sos

What happens when DAOhaus now controls these tokens? Will DAOHaus sell them or hold them?

• In either scenario, I’d propose this means someone on DAOhaus needs to act as a CFO/goblin (is that what we called it in RG) and do treasury management. Do we want to be holding the bag? When DAOHaus needs funds, which tokens are decided to be sold first?

iirc the Raid Guild treasury role is a dwarf

But yes, this is a good question, one that I have not attempted to address in the current concept. I suppose you could say that the current concept is focused on how value enters the UberHaus treasury, and leaves the question of what UberHaus does with that value to a separate discussion/proposal.

But it probably makes sense to include that discussion alongside this one. I would love to see some ideas from the community here

[cupojoseth]

I think this is a great proposal, so glad to see it written out, and as an Uberhaus delegate I would vote for this.

I really like alignment in every direction: daohaus needs to be funded to keep providing an awesome platform. the DAOs that make up the platform currently have no way to do that without just buying HAUS. Now the DAOs can just focus on building and growing, while everyone can win together.

The next concern becomes, will daohaus be incentivized to just dump on everyone as it gets tokens? I dont think so. the individuals who make up the uberhaus… WE ARE THE DAOS, we’re not going to dump on ourselves. Much more likely to me, is if any particular moloch v3 dao takes off to a point where it would be worth it to consider selling loot tokens to fund continued daohaus development, instead we could just create a pool for them in agave or other lending places like the new Porter Finance, or be an AMM LP and collect yields. owning that loot doesnt mean we have to sell to benefit from it.

[0x7136fbddd4dffa2369]

Generally supportive of this proposal. Have one question and then a couple thoughts.

Question: Are we only minting shares to UberHaus when a DAO votes to set transferability to true? Otherwise, UberHaus could always ragequit loot to access a portion of the DAO’s treasury.

Thoughts:

• I think we should set an initial fee other than 0. I think something like 0.5% or 1% would be appropriate and is expected in the DeFi world. My worry with starting at 0% is that inertia will keep it at 0%.
• I think we should consider creating a path for these new DAOs to easily join UberHaus. The risk here is that UberHaus is just the MolochV2 DAOs that are exempt from the fee, which creates the potential for misaligned incentives. Of course, there’s always the incentive not to set the fee so high it becomes more appealing just to fork DAOhaus, but I think easy participation from the new DAOs subject to this fee is going to be essential for proper calibration around the fee and an honest ongoing assessment of its impacts.
• Final half-baked thought – this might be too complicated to implement, but should we consider more of a swap where we UberHaus gets loot and the DAO gets some amount of HAUS (ideally equivalent to the value of the loot shares).

-Bill

[spencer]

@0x7136fbddd4dffa2369

Question: Are we only minting shares to UberHaus when a DAO votes to set transferability to true? Otherwise, UberHaus could always ragequit loot to access a portion of the DAO’s treasury.

Technically, loot is minted to UberHaus any time a DAO creates new shares or loot. The concept that the value of that loot wouldn’t accrue to UberHaus until made transferable is based on an assumption that the coordination cost for UberHaus to vote to ragequit loot from a particular DAO is so high as to effectively prevent it from happening.

That assumption, however, can and should be considered carefully. I welcome challenges to it!

@0x7136fbddd4dffa2369

• I think we should consider creating a path for these new DAOs to easily join UberHaus. The risk here is that UberHaus is just the MolochV2 DAOs that are exempt from the fee, which creates the potential for misaligned incentives. Of course, there’s always the incentive not to set the fee so high it becomes more appealing just to fork DAOhaus, but I think easy participation from the new DAOs subject to this fee is going to be essential for proper calibration around the fee and an honest ongoing assessment of its impacts.
• Final half-baked thought – this might be too complicated to implement, but should we consider more of a swap where we UberHaus gets loot and the DAO gets some amount of HAUS (ideally equivalent to the value of the loot shares).

These might actually be the same thing. Sending some HAUS to DAOs that turn on loot transferability would have some nice effects:

• those DAOs would then have the ability to join UberHaus and participate in governance over their own and other loot tokens
• it would create an additional incentive to turn on transferability

@0x7136fbddd4dffa2369

I think we should set an initial fee other than 0. I think something like 0.5% or 1% would be appropriate and is expected in the DeFi world. My worry with starting at 0% is that inertia will keep it at 0%.

Interesting!

To me, the benefit of starting the number – its not really a fee – at 0% is that it puts the decision entirely into the hands of the community, via UberHaus governance. Importantly, deferring the decision till later gives more DAOs and community members – especially the ones who don’t yet exist – the opportunity to participate in the decision.

Additionally, it may be the case that HAUS can be valuable even if the fee remains at 0, a la the hyperstructure theory.

[nintynick.eth]

Overall, I love DAOhaus - the product and the team. I’m an active user and HAUS holder, so I’m excited to see ways of accomplishing Objective (ii).

@spencer

(6) DAOs that turn on loot transferability would face the possibility that X% of their loot could be ragequit – e.g., if UberHaus were to sell their loot on a DEX. But this would be the exact same possibility as with the rest of their loot, which would also be fully transferable and liable to be sold at any time.

I have a concern about low liquidity tokens. If a low liquidity token was sold, this could nuke the price of the DAO token. Imagine UberHaus sold 1% or 5% of all outstanding RAID token, for example. Perhaps the introduction of a minimum treasury value or minimum number of loot holders (or some other measure of size and decentralization) could help with this.

This is also a really bad signal for the the DAO that UberHaus is selling the token of. Under what circumstances can you imagine this happening?

I like that this aligns incentives between UberHaus / DAOhaus and the DAOs in the ecosystem, but perhaps the DAOs would prefer to reduce sell-pressure on their loot tokens. Same problem that every DAO has with paying their contributors in native tokens vs. ETH or DAI.

@cupojoseth

Much more likely to me, is if any particular moloch v3 dao takes off to a point where it would be worth it to consider selling loot tokens to fund continued daohaus development, instead we could just create a pool for them in agave or other lending places like the new Porter Finance, or be an AMM LP and collect yields. owning that loot doesnt mean we have to sell to benefit from it.

Big +1 to @cupojoseth here, seems like a great middle ground that handles some of my objections above.

@0x7136fbddd4dffa2369

Final half-baked thought – this might be too complicated to implement, but should we consider more of a swap where we UberHaus gets loot and the DAO gets some amount of HAUS (ideally equivalent to the value of the loot shares).

As we discussed, also really like Bill’s idea for a token swap. Token swaps are still nascent, but I think they’re one of the best horizontal coordination mechanisms that have emerged in the ecosystem so far.

@spencer

(8) DAOhaus would have a direct incentive to support other projects in building on, composing with, or integrating with DAOhaus infrastructure. Since every additional DAO summoned via the DAOhaus factory – regardless of what user interface that DAO uses – adds to the total expected value of the $HAUS token, it behooves DAOhaus to make that as easy as possible and to promote a wide variety of user interfaces (the better to address the unique needs of diverse segments). This is in strong alignment with Objective (i).

Other than long-term sustainability for DAOhaus, this is the most important part of the whole idea to me. DAO people are basically incentive engineers - the biggest problem to overcome is making sure the game theory pushes us to collaborate over compete. I think this is a step in the right direction.

[cupojoseth]

@nintynick.eth

I have a concern about low liquidity tokens. If a low liquidity token was sold, this could nuke the price of the DAO token. Imagine UberHaus sold 1% or 5% of all outstanding RAID token, for example. Perhaps the introduction of a minimum treasury value or minimum number of loot holders (or some other measure of size and decentralization) could help with this.

Valid concerns, but daohaus will never nuke raid guild (or any user of the platform) for a few bucks because, long term, we want more people to join the guild, more loot shares to be minted, and the users of daohaus to be successful long term. Selling only makes sense if there is deep liquidity + doing so is not an attack.

There are dozens of sustainable yield strategies for those valuable loot shares that dont involve dumping. I wrote one such here: Uber Haus Index revenue proposal
If fear of getting dumped on / hurting the DAOs from selling is any reason to be hesitant about the original proposal, please consider this.

To defend again even the possibility of nuking it also creates an incentive for Raid Guild (or anyone) to buy some HAUS tokens, hold in their treasury, and participate more in governance. → More positive reinforcement loops

The tokenomics and incentives here are strong in my opinion.

[burleebau]

This is an excellent proposal and I am by and large in support of having every new DAO summoned using the Moloch v3 contracts transfer Loot to be controlled and managed by UberHaus.

Establishing a Reserve

The proposed mechanism not only sets out a clear path to drive value to HAUS through Loot transferability, but also indirectly begins to generate a reserve for the backing of HAUS tokens through the UberHaus treasury, where value accrues to the DAOs holding Shares or Loot within UberHaus.

The value being generated to this Reserve would only be realizable once Loot transferability was turned on, but conversely, UberHaus would not need to ragequit in order to have value accrue to the HAUS tokens, UberHaus would simply have an option to execute ragequitting the loot at their own fruition.

The mutually positive reinforcing incentive mechanism may be explored further, but in my view the mechanic looks like a great first step at capturing the underlying value being generated within the DAOhaus economy and ecosystem.

I am also all +1’s on @cupojoseth comments for creating avenues for D2D supported liquidity, where instead of UberHaus selling Loot on the open market it could support liquidity on different chains & exchanges. I think this could have many net-positive benefits:

1. Reducing market dumping
2. Supporting liquidity for DAO tokens
3. Putting capital to work & earn interest for protocol sustainability
4. Creating price stability for DAO tokens through supporting treasury diversification

And the list goes on…

I would also like to say I think Token Swaps or accepting other DAO tokens with a rule sheet of pre-conditions into the UberHaus treasury might be a good way to promote treasury diversification and create stability within the UberHaus treasury.

The idea of UberHaus giving HAUS to every DAO that is created using the Moloch v3 contracts and receiving Loot, on the surface, seems highly risky, as there is always the possibility that the DAO UberHaus grants HAUS to goes ahead and sells it on the open-market, or even worse the DAO that turned on Loot transferability mints a gazillion more Loot shares that dilutes the value of Loot and value of HAUS that UberHaus has staked for Loot. There might be some considerations that I am missing here, but overall it does not seem like a good idea for UberHaus to be distributing HAUS to DAOs that turn on Loot transferability.

Both objectives (i) & (ii) will be achieved by supporting this proposal, and in line with (#8) we will see communities created on DAOhaus reap the benefits of a rising tide that lifts all DAOs in the DAOhaus ecosystem.

Let’s push to collaborate > compete @nintynick.eth

[spencer]

There are a couple outstanding questions from this approach:

1. How will UberHaus manage the transferable loot shares in the treasury? Will it have to sell them to realize their value? What kind of governance overhead will these activities incur?
2. How can we ensure that UberHaus does not ragequit the loot shares in its treasury that are not transferable?

This post presents a solution to both questions.

HAUS-exitable loot shares vault

The answer to the two questions above is to take UberHaus out of the equation altogether. Rather than loot tokens being minted to the UberHaus treasury, they are instead minted to a vault.

The only way to get loot tokens out of this vault is by redeeming (burning) HAUS tokens in return for a proportional amount of the loot. Any loot tokens that are not transferable are of course by definition ineligible for such a redemption.

Implications

• The loot tokens are no longer subject to UberHaus governance
• Which means they cannot be ragequit prior to being made transferable by their respective DAOs (solves question #1)
• And UberHaus incurs no coordination overhead to manage them (solves question #2)
• Instead, the decision to ragequit transferable loot tokens is left to individual HAUS-holders, ie (since HAUS is trade-able on DEXs) the market
• HAUS token value is therefore underpinned by the loot tokens, since they are directly redeemable
  • note that this doesn’t change anything else about HAUS utility – eg for protocol governance, curation, etc. “All” it does is create a floor for the economic value of HAUS, which powers up all other potential use cases for HAUS.

Potential implementation

We can use our favorite modular DAO toolkit, Zodiac.

• The vault is a Zodiac Avatar, eg a Gnosis Safe
• It has a customized Exit Module, with the following properties
  • burns redeemed HAUS
  • skips redemption for loot tokens that are not transferable (can read from baal.lootPaused)
  • has multi-tx redemption to support the case where there are more redeemable loot tokens than can fit within the gas limit

Outstanding question

• How do we make this work across multiple chains?

[jrm.eth]

Very exciting to see this proposal come to life. I’m new here, so if any of my verbiage is incorrect (DAO Haus vs DAOHaus vs DAOhaus; UberHaus vs DAOHaus… that whole chestnut…)

In the future, you can imagine that there will be dozens of dApps where end users can spawn new Moloch DAOs. In this world it will be crucial to also create a reward structure for these dApps to:

1. Economically benefit from the value they are creating for the broader ecosystem
2. Participate in protocol governance to help ensure long-term alignment

For these reasons, I feel the V1 implementation of this protocol fee should definitely address point 12 here:

@spencer

(12) This approach to value accrual is fully compatible with other such mechanisms, including (B2B) services, fee-split agreements with projects building on DAO Haus infrastructure, curation w/ the $HAUS token, and even boost- or services marketplace fees. This creates maximum flexibility for DAO Haus’ ability to fulfill Objective (ii).

Two DAOs that do this well today:

• Zora’s finder’s fee reward: If the protocol takes a 2% fee, the matchmaker of buyer and seller can get a percentage of this total fee. In the DAO Haus case, it’s important for this fee to be able to be set at a dApp level since the size and scope of various dApps will vary greatly as the protocol becomes more well adopted. Further individual dApps would view this matchmaking fee as a “deal point” that they would hope to be able to customize/negotiate based on other contributions they plan to make to the ecosystem.
• Unlock Protocol’s governance airdrops: Every time someone deploys an Unlock Protocol Lock, the deployer gets some unit of $UDT to help participate in future governance. When Unlock launched their token they carved out a fixed size reserve pool to distribute for this purpose to help incentivize early contributors to the platform and help create a bidirectional value alignment between parties.

DAO Haus’ model could borrow directly from these two examples to create a relatively intuitive value alignment between Moloch DAOs and the Protocol:

1. DAO Haus sets an X% protocol fee, with X originally set to 1% (for the sake of argument). X can be changed by proposal from the DAO.
2. DAO Haus sets a Y% finders fee, with Y originally being set to 50% (for the sake of argument). Y is the default global value, but it can also be customized on a case-by-case basis. Ideally this could be done at the discretion of some internal Business Development function within DAO Haus, but in lieu of that could also be done by a DAO proposal.
3. DAO Haus creates a new token pool (ie, 200K tokens) that is held in its treasury and reserved for distribution to future DAO creators.
4. When a new DAO is created, $HAUS is airdropped to the wallet where the smart contract is deployed. Optionally, the DAO deployer can set a redirect address that’s separate from the place the smart contract is deployed. This would be especially useful in the case where there are new dApps for DAO creation.

Look forward to hearing y’alls thoughts, and humbled to be a part of such a smart and thoughtful community!