We’re heads down right now, preparing for our second print issue of Des Femmes Magazine
and the 2022 mentorship program
. In the meantime, we wanted to offer some updates to answer recent requests about our DAO transition “experiment,” including challenges and efficiency tradeoffs. So here it goes!
We approached our first DAO “experiment” with both excitement and naïveté. With regards to the makeup of the 3-of-5 bitcoin multisig wallet, four of the keyholders paid $1,000 each to cover the costs of a Casa membership
, while a fifth keyholder earned a “scholarship” spot (covered by Des Femmes LLC) by contributing time spent on documentation via Notion. We thought this would give keyholders
some “skin in the game,” and they informally agreed to spend at least one hour a month throughout 2022 to allocate funds deposited into that wallet. The agreed upon purpose of the funds
was the following:
“Des Femmes keyholders can spend community funds on anything they all agree to, whether that’s on custom illustrations or art for the next print magazine or a VR art exhibit or an IRL event in Miami during the Bitcoin 2022 conference or swag for the community. There’s no limit to the possibilities!”
However, soon after the live wallet
received funds in January 2022, we quickly realized the challenges at hand. Several keyholders felt more overwhelmed at work than they had expected to be. Two of the keyholders subsequently suffered health emergencies within the first half of the year, making it nearly impossible for them to uphold their original keyholder commitments. When keyholders had to choose which personal commitments to sacrifice, roughly $2,000 worth of dormant bitcoin couldn’t compete with more urgent responsibilities. It took several months to get a few keyholders on the same call, much less in agreement about how the funds should be allocated to benefit the community.
There was at least one community contributor who asked, early on in January, why all Des Femmes LLC funds weren’t automatically converted into bitcoin for the multisig wallet. The answer is that keyholders didn’t want that kind of pressure and commitment. It wouldn’t have been possible to file tax paperwork and pay freelancers, activities which often required more than 20 hours a month of operational labor, with the keyholders’ available bandwidth. The transition from crowdfunding project
to DAO “experiment” meant first defining a common goal. That democratic process is still ongoing, more than 7 months later.
Even including the ETH keyholders that formed a secondary wallet in February 2022
, eventually garnering five ETH multisig keyholders
to make a total of 10 keyholders managing funds deposited by Des Femmes LLC, there wasn’t consensus that the DAO should continue focusing on a print magazine. Some members did want to focus on the magazine, while others wanted to use the funds for NFT programs
, charity donations, or paying themselves for time spent on the “experiment.”
To date, the community funds have been used for a public bounty program that collected grant opportunities
for which community members can apply, and to facilitate the purchase of two NFTs
. DAO-ish transactions to donate to charity and fund an educational BTCPay server guide are underway but as we’ve learned, it takes months from the time a transaction starts to the time it is finalized.
Many keyholders were offered Des Femmes LLC co-ownership in Q1 2022, yet declined at that time because they didn’t want any more responsibility, regardless of money. Self-managing, even when provided with funds and resources, is hard! In the meantime, one of the ETH keyholders has been tasked with setting up BTCPay Server to accept bitcoin on behalf of the community. Des Femmes LLC will pay that keyholder for her time only if she accomplishes it and documents the setup before September. Then, going forward, the BTCPay Server operator would keep 20% of the bitcoin earnings made through that payment processor, as a management fee. Even with this dollar compensation, it’s still an experiment to see if community fund management works for an early stage project *without* offering speculative investments.
Our lesson from all this is that, going forward, it’s important for fund managers to clarify a specific purpose before joining a keyholders cohort. Getting other keyholders excited about a transaction to the point that it becomes a priority, even though it probably won’t go into their own pockets, is the challenge. We are all busy. We all have more lucrative ways to spend our time. Suffice it to say, it was very beneficial to have a centralized LLC responsible for prioritizing deadlines, like tax paperwork and legal documents that enabled the keyholders’ experiments, plus (LLC-executed) bitcoin payments to women freelancers involved with producing events, products, and services
Many of the external DAO operators we’ve talked to noted that it took many years, and/or millions of dollars, before community leaders felt a sense of responsibility to the DAO. Can grants, scholarships, and career opportunities among less wealthy individuals (without millions of dollars to risk) inspire productivity if participants have complete freedom? Only time will tell.
If you’d like to share your own insights and resources related to DAOs, we would love to hear from you! Reach out by emailing us at firstname.lastname@example.org