A Distributed Autonomous Organization, or DAO, is a smart contract which allows different parties to vote on decisions with token holdings. This promises a fast, transparent, yet verified process for collective decision making.
As the third component of our Operating System for Climate Action, a climate DAO could have a variety of uses, including:
- A group of consumers form to purchase climate friendly products together. They use a DAO to vote on which products meet their climate criteria. The DAO could be used to vote on specific products or the methodology for validating the products.
- A group of offsets buyers vote on the validity of proposed carbon offset projects, such as forestry or renewable energy. The DAO could be used to validate the projects while they are awaiting formal certification by a standards-driven body such as the Gold Standard or VCS.
We have customized the Compound DeFI network's DAO to work with the Emissions Tokens Network as an example of the second use case. Here is a video demo:
And here is a technical tutorial of customizing the Compound DAO.
The DAO we have works uses the Compound DAO's technical framework, but the rules have been changed significantly to simulate a real world scenario where the tokens represent votes, and the votes are made finite so that voters take them seriously:
- The contract owner gives voting tokens, "dCLM8", to members of the network.
- There is no limit to the potential supply of voting tokens.
- The voting tokens cannot be transferred between voters, though voters can still delegate their votes to another party (for now.)
- Voting tokens expire automatically if you do not use them.
- When you vote your tokens, they are "burned" and cannot be used again.
- Voting is quadratic, so the number of votes cast is the square root of the number of tokens you cast. Quadratic voting has been proposed as a way to better balance the views of many voters with few tokens and a few who hold many tokens.
- Proposals can be broken up into attributes, so you can either vote on the proposal as a whole, which is the same as splitting your vote equally on all its attributes, or cast all your votes on one attribute of it.