January 27, 2022

Critical Conversations and Compensation in DAOs

June 27, 2022
Critical Conversations and Compensation in DAOs
This podcast was published on
On the Other Side
and recorded by
Chase Chapman
.

Podcast

Transcript

Chase Chapman  
Welcome to on the other side, where we talk crypto culture and society, and how crypto might shape society and change how real humans live their actual lives. Every week we have on cool people from the crypto world to talk about what they're building and what the implications of that might be for real human beings. Before we hop into the show, I want to give a quick thank you to the first sponsor of on the other side rabbit hole, rabbit holes allowing users to earn crypto while they explore the weird world of web three, guiding new users down the crypto rabbit hole in a curated way to make sure that people coming into the space are not only using positive some protocols, but are also starting to build their on chain resume as they do it. So the longer term vision for rabbit hole is building essentially the open credentialing system for web three. To build that credentialing system. It's important that they're decentralized. And so the Pathfinder program is paving the way for decentralizing rabbit hole, and creating an open system built by the community not by a single team. If you're interested in learning more about rabbit hole, check out rabbit hole at rabbit hole.gg. You can also check them out on Twitter rabbit hole underscore GG. And if you're interested in learning more about the Pathfinder program, which is the first step to the rabbit hole DAOs. You can check it out at rabbit hole.gg/pathfinder. Alright, let's hop into the show. Before we continue with our regularly scheduled programming, I want to give two quick updates on housekeeping items. The first is last week I released an episode about claiming pole apps for being a supporter of the gitcoin grant for this podcast. And for being a listener. Supporters of the gitcoin grant are able to claim Power Apps, no problem, listeners will not be able to and this is my fault for not testing the listener power apps before I released the podcast. So I'm sorry if you were frustrated. Or if you spent time trying to figure out why yours wasn't working. I should have tested it before I released the episode. But I just assumed that it was working, which turns out to have been wrong, because poll app has changed their distribution abilities to avoid scammers claiming all the poll apps. So it's really hard to tell if you're actually a listener to the podcast, or if you just want to claim the poll app and farmed some sort of airdropped or something. So I need to come up with a little bit of a smarter system for people who want to perhaps I don't know what that will be at maybe I'll do a funky little quiz or something. It won't be a challenging quiz. If you've listened to any episode of the podcast, you should be able to pass it but I'm not entirely sure yet. So I will keep you all updated on that. I want to make sure that I respect anonymity while also avoiding Sybil attacks. So we're gonna figure that out. But I'm not exactly certain what that look like. Yeah, I'll keep everyone updated. The second quick housekeeping item is, this episode is with Zach from coordinate, who is awesome, I realized we didn't really give a overview of what coordinate is on the show for anyone who's not familiar coordinate is a system that allows contributors particularly in DAOs, to allocate to each other. So you have a circle that's defined by members of the Dow, every member of the circle is given 100 points, they're called give points. And you can allocate to anyone in your circle, and usually there for a certain period of time, which is called an epoch, let's say it's a month. And so I'm given 100 Give and I can allocate that across other collaborators in my circle. So if I have Zack and another person in my circle, I can give 70 of my give to Zack, if I think he did a really great job and B 30 to the other person, you cannot give give to yourself. And also, these give tokens are used to allocate actual governance tokens or compensation in some way. So if Zack gets 70 of my give tokens, he's probably going to get that proportional amount in tokens. It changes based on the Dow. But that's the gist of it. So just want to make sure that we're all starting on the same page here. And yeah, enough of that. I hope you enjoy the show. I am here with Zach from coordinate. Zach, thank you so much for coming on the show. It's awesome to be here. Chase.

Zach  
Thanks.

Unknown Speaker  
I am so excited to chat about a million different things. Before we dive into that. Do you want to give a little bit of background on you and how you fell down the crypto rabbit hole?

Zach  
Yeah, so I had a career basically focused on business and sustainability working with corporations to make them greener in all sorts of ways. And one of the things I noticed is how important collaboration is and how bad at it people are. I felt like I was working with these sharp executive teams from global corporations. They were so smart and committed and yet the more of them that got involved in a decision, the worse It got. And so I started studying about collaboration and how leadership works in a networked way. And that led to co founding converge, which was a consultancy, focused focused on creating impact networks for social environmental impact. So getting lots of people together towards some common goal that can't accomplish alone and discovering DAOs was really just the next step in that journey of like, oh, wow, here's the infrastructure, we need to really scale network leadership and impact. So I started doing some work with Yearn and really just got obsessed with 1000. Web three, and the promise of it.

Unknown Speaker  
And so where in that journey did coordinate start to emerge

Zach  
coordinate came from our work in Yearn. So the, the way that coordinate started was at Yearn, they had just like many DAOs have contributors that were showing up and doing all sorts of helpful stuff, translating docs, and moderating discord, all the things that people do for DAOs. And their system was to give grants to folks, but some people deserve grants that didn't apply for them. There was always a question of like, how much was something worth? And there was this grants committee that was constantly doing these apples and oranges comparisons? And also, they were like, how did we end up being the grants committee? You know, it just sort of was a role they fell into? And so really decided to turn it back to the community and say, why don't we let the community decide what's valuable, and decentralize the whole process, make these subjective decisions on behalf of the group instead of this small committee doing it. And so coordinate really started in direct response to an issue that Yearn was having and then over time, other DAOs, it turns out, we're also dealing with all sorts of different versions of the same problem of how to have more decentralized compensation. And so it started just picking up steam from there. And eventually, we decided to spin it out and make it some project.

Unknown Speaker  
I love DAO tools that come out of DAOs. Because they always feel like they solve a problem that if you're just like guessing what DAOs need is much harder to get at. But I think comp is one of those things. That's a really big question mark, for a lot of DAOs. Of course, there's a lot to figure out. But comp is one of those things that you can't just let slide because people need to get paid and pay their rent and all that kind of stuff. I know you've done a lot of like thinking on how DAO comp could be structured, how DAOs are doing comp today? I'm curious what you've found, like what types of comp exist? And what are those structures look like? Specifically within DAOs. Tactically,

Zach  
the easy answer is there's different comp for every DAO. Everyone has their own take on it, it seems, but essentially, you have core contributors, you have people who are essentially employees of the DAO, they're working full time. And they need some sort of reliable, committed salary. And obviously, there's many different ways to do that. There's other folks who are regular contributors, but are likely regular contributors who aren't being supported full time by their work at the DAO. And then there's outer ring of contributors who are showing up and doing very specific things, one off things helping out when and where they can. And so finding ways to to compensate all of those different groups. So far, I don't think there's one tool that that does it all really well, there's different needs for each of those groups. And then you have questions about how are we paying in native tokens versus stable coin versus whatever else? How are we load balancing for people's different needs, whether you're living in Manhattan or someplace that has a much lower cost of living? And so right now, it seems like there's a lot more questions and experiments that than there are definitive answers about, here's the best practices around competence in DAOs.

Unknown Speaker  
Yeah, I think that's definitely what I've seen at least, which is that everyone has a different perspective. There's definitely a lot in terms of how you define the quality of work. And who defines that, which I feel like coordinate. And the system that coordinate uses has really interesting approach to because you're having a community, or at least a group of people define what the value of each other's work is, which I think feels like it works really well in smaller groups. But it does feel like there's this power dynamic that is behind comp, which is part of why I think it's such an uncomfortable conversation, because part of the discussion is who is deciding how much my work is worth, which I feel like starts to get at some of the different power dynamics and power structures within DAOs more broadly.

Zach  
Yeah, absolutely. And it also cuts right to the heart because we talked about compensation. It can feel like a very removed mathematical thing. But for a lot of people, your compensation is really the system telling you like how valuable you are. And what everybody wants most is to be recognized and appreciated for their gifts and to recognize and appreciate others. But building systems that do that better, I think is more our focus than trying to find systems that do that perfectly, because we know that some centralized system of samura analysts to position and you're in this salary band does not satisfy people. But so at the other hand, it doesn't feel good to say, Oh, I'm just relying on this group of student on the Miss people to determine my salary every month. And so what we're trying to do at coordinate and lots of other tools are exploring this, too, is how can we continually get a better system of compensation that meets the needs of of all these different groups, can a system, pay people effectively a salary, and then also pay bonuses and native tokens, for example, or the way we do it internally at coordinate is that everyone on the team gets the same, we call it our own kind of internal UBI. But everybody gets the same allocation and USDC. And then we use coordinate on top of that, for recognition and bonuses for the awesome work that people do, you know, over and above and beyond, I think, stereotypically or cliche like, we're still early, I think we're just figuring out some of the optimal ways to mix and match and remix, compensation and how to reward people for the value that they bring.

Unknown Speaker  
I feel like a lot of the current discussion in web three over the past year or so has been very focused on this question of missionaries versus mercenaries, which I kind of have problems with. But what comp brings up that's interesting is like, people's go to work because they want often to just make a living. And there's nothing wrong with that, I don't think. But I'm curious to hear your take on comp in the context of this whole, like, missionary versus mercenary conversation and what role that plays in DAOs.

Zach  
I mean, anytime I hear verses, I usually hear trying to create a dichotomy or a binary, where actually, there's a much broader paradox involved. And so to say, like, you're either a mercenary or missionary, all of us are both. And it really depends on a whole number of factors of where I'm going to apply mercenary things I just want to get paid for, where I'm a missionary, that's so fervent that I would do it for free, if I have the privilege to do that. And then most of us spend time somewhere in the middle of that spectrum. There's things that we really believe in and want to work on. And we all have bills to pay. I think, just broadly, I think, in the DAO space, being able to hold tension between paradoxes and really live in this space of multiple truths is important and not try to fall on one side of the other of saying, there's DAO tools that are great bounty systems that are more on a mercenary end where it's, we need this test done. And this is how much we're paying for it. And those are really useful and helpful and valid, and so are things on the other end, the missionary, which is we're all trying to do this thing. And we're a new DAO forming, and there's no token, and we have no idea how we're going to go forward. But we all really believe in this central purpose. And we're gonna go for it. And of course, like all the different cases in between. And so I think one of the most important things we can do in the DAO space is practice this muscle of embracing paradox and living in two truths that appear to be antagonistic but are actually just different perspectives.

Unknown Speaker  
I love that take because I feel like sometimes Twitter makes us much more binary than we need to be and much less nuanced. Like myself, we're also knows catch myself saying something that's like, I don't fully believe that I'm this far on a scale of one to 10 in this direction, but I am acting like it because that is the approach that does well and seems to be very prevalent on Twitter. And so that's what I consume. And sometimes it's what I say. And so this idea of actually balancing and being okay with two truths that seem completely mutually exclusive on Twitter feels very important. Like I feel like sometimes we just get away from that. Which reminds me of we were talking before we started recording and we were talking about humans collaborating like my brain immediately goes to Okay, Twitter is a mess because people have these like binaries about a bunch of different things or unwilling to have paradoxes that are both true on different sides. And we were talking about collaboration more broadly. And I feel like social media has just made it challenging for people to collaborate. Of course, there are tools like Slack, like there are lots of tools that have made that easier. But you made this really interesting point about DAO tooling actually potentially becoming this new type of tooling that like really facilitates maybe not new type of tooling. But tooling that facilitates a lot of collaboration between people, which I think is really interesting. And this idea that we don't really have HR right now, which feels like a big problem in town. I'm curious how you think DAOs sort of fit into this entire mold of how humans collaborate online? I know, that's like a massive question. But I am curious to hear how you think about that.

Zach  
My hope for DAOs is that they become not only like a mode of collaboration, but a mode of personal development of collective development, and ultimately, of how do we create a different culture than the one we want to see, ideally, being a part of a DAO would also help expand the way for example, I think about paradox, or what's true and what's not, when I think about organizations that have HR, the sort of super oversimplified take is that the reason we have HR is because there's some conversations that are just too uncomfortable to have. And so we've outsourced them to, to HR, and a lot of it is around like comp and money, and how do we decide what's valuable? And we let HR do that, or a conflict resolution, I have this conflict with somebody. And so HR takes it and deals with it. And I think if we really are if we're all going to make it and create these new systems that we see the promise of but we're still just now exploring, like, how are we going to actualize them? I think DAOs will facilitate those kinds of conversations much more directly between people, just like we're saying, web three is much more decentralized and peer to peer. How can we make critical conversations more decentralized and peer to peer? How can we make compensation more centralized and peer to peer? How can we create real authentic trust amongst all these DAO contributors such that we don't need arbiters to figure out these really hard questions, we can do it amongst ourselves.

Unknown Speaker  
I love that because it hints that what I feel like is very much a cultural shift in the way that we engage with people that we're working with. Really, probably in terms of honesty, which we talked a little bit about before we started recording also, and almost like radical candor or vulnerability with each other, which I think is super interesting. Can you share a little bit about what you were talking with me earlier about in terms of like honesty among people that you collaborate with?

Zach  
Yeah, I was sharing some of the experiences that we had at converge at converge the way we paid each other is, essentially, if you're like an analog coordinate version, we would invoice the client and put the money in the middle of the table, and then have conversations about how much do I think I should get? How much do I think you should get? And and in doing those, as we built, more and more trust, the allocation became way less important than the conversation we were having. That's when I would get really critical feedback from folks. You know, I would say, Well, I, I did all this stuff. And I'm like, Yeah, but that was a waste of time. Actually, that wasn't that valuable. And we told you that but you were insistent that this was going to be great. And it wasn't, I would learn to take that feedback and be like, You're You're right. And so what we ultimately found, and lots of people have discussed and written about this, is that trust is like the most efficient system that you can have in an organization, trust and self awareness will take you 99% of the way of having a high performing human system, as opposed to creating all sorts of tools and structures and rules, which many times just become workarounds to having really hard conversations about performance or about self awareness. And one of the things I'm excited to see, hopefully, developing DAOs is when we talk about doubt, tooling, it's not just tools that help us allocate resources, or make decisions and vote on things or keep track of who's doing what, but how can we create DAO tools that are really facilitating these hard conversations about what is valuable? What does competence look like in a role? If someone puts their hand up and has a lot of enthusiasm? To do something does that mean they're the best person to do it? We're really going to need to embrace paradox and a lot of these questions on DAOs of when we're doing things that are leader full and, and permissionless, but also needing to have really critical conversations with each other to move things forward. There's going to be a generation of doubt tools at home that really facilitates personal growth and critical conversations amongst team members.

Unknown Speaker  
I love the idea that you mentioned also before we started recording such a good conversation. We should record about it, but I love the idea that You mentioned around personal growth and work, whether it be like DAO type work, or I guess DAOs could manifest as a different type of function that doesn't feel like work. But in any case, work as this vehicle for personal growth, because you have the ability to trust and be vulnerable with the people that you're working with. I think that's so powerful, and something that we don't think about a lot in DAOs, because we think so much about mechanism design instead of this human design. And I think sometimes that hurts us a little bit. When you think about trust and building that space. What made that possible, because I think that's what's missing for a lot of people. Building DAOs is like, theoretically, yes, I would love to be able to talk about these things. But actually building that trust feels harder.

Zach  
Building trust, of course, like is hard. And there's been so much great stuff written about what is trust and how to build it. One frame that we use that converge, and that we also use it coordinate is instead of thinking about building trust, and trust is a noun, really think about trust is a verb. And I forget who the quote is. But somebody said that, the only way to know if you can trust someone is to trust them. And so a lot of times we have this mental model of, I start out, I don't know you, I have no reason to trust you. And over time we build trust, you show me that I can trust you, I'm vulnerable, and I don't get hurt. And so then I can trust you more, you say you're going to do something, and then you do it. So I trust you more. But another frame is to think about trust is a verb, and to just say, I'm going to trust you until I have some reason to do otherwise. So instead of building it, you give someone your trust. And then you can always take it away as events warrant. But thinking about trust a lot more of kind of going all in or as much as you can from the beginning, instead of taking this sort of wait and see and build approach. Another thing that that I think we're already seeing, and we'll continue to see, and I think, you know, in a few years, it'll be very common practice for DAOs. To have in real life get togethers and retreats a couple times a year as a holdout. And then lots more subbed out retreats. But there's nothing that replaces that IRL feeling. And we know that from conferences, and I've been working with a few dials that got together in person. And it totally transforms those online conversations and connections. You know, if I'm only interacting with someone on Discord, I've never heard the tone of their voice. I've never really seen their eyes when they're talking. And once I have, I'm going to take every one of their discord messages a little bit differently. And so to really keep that coherence and do the deeper work of trust, I think that IRL DAO events and retreats are going to be a permanent feature of what we're building.

Unknown Speaker  
Yeah, I totally agree. And what's interesting is you and I met for the first time at EmCon, which was a really curated event. And because it was curated, it was much easier for me to trust the people that I was around. And to me trust at a conference is actually a lot more of trusting that we have the same or similar context when it comes to approaching conversations about DAOs or web three, you know, I don't really think a lot of people going to EmCon we're like Bitcoin maxis. So it's not really necessarily even about, hey, I know that Zacks not gonna like show me or something. It's much more of I know that we have shared context. And what I'm getting at that, I think is an interesting question. And DAOs is, it feels like curation and knowing that someone who's in a DAO with you has sort of gone through a little bit of a filter helps interesting people more quickly. I'm curious coming from your background and what you've seen in DAOs. And the fact that coordinate does circles, which is people who have already worked with each other, how do you think about what makes someone a member or a contributor to a DAO versus like in the community? I guess? I'm curious how you think about that.

Zach  
I think about it in concentric circles, it's really obvious when you look at who's showing up who's shipping work, who's involved in the conversations, who's got lots of context, those are people that are closer to the center, and it's fine. If you're more on the outside as a contributor, and you're just showing up and making some memes and you're really into the project. That's a totally valid way to I think the big question is, what is the path for people from the outside toward the center? And I think again, a lot of people have written a lot of great stuff about this about the importance of purpose and principles. I'm in Dallas and say, This is what we're about. And this is how we do things around here in the absence of here's a specific task that you can do to get involved. At coordinate, we have been really excited by the community because we've fostered this culture of anyone can do anything come do and contribute. And then you're rewarded for it, as opposed to, here's what we need done, come and tick off these things. Because it really finds those people who are excited about the project and the places that could go maybe that we haven't even thought of, and really opens up space for people to start contributing in all sorts of different ways. And then when it's valuable, they get that signal in the form of a coordinate circle. This was valuable. And so once someone has added a bunch of value over several epochs, it's pretty clear like, Wow, I wonder how we can get them more involved? How can we bring them closer to the center, and ideally, coordinate circles serve as a hiring funnel for DAOs. Because there's permissionless way for people to come in and start adding value rather than posting a job and having people come interview for it. It's really more like a mutual tryout on both sides.

Unknown Speaker  
You're bringing up something that's interesting, because I think that this definitely works well. Like I've used coordinate, I really like coordinate. One of the interesting mechanisms that I've seen that I would love to hear your take on, because I'm sure you thought a lot about this is because you're getting paid from other people. And this does not just apply to coordinate, like to me, in DAOs that have, for example, working group leads allocating comp monthly, this problem still emerges, I think it's a problem that emerges in most comp structures, and DAOs, which is that sometimes the people who are the loudest are the ones who get paid the most. I suppose this even happens in traditional orgs, where I know there's a study on how people who show face to their boss more have a higher chance of being promoted. And I think that ultimately all boils down to the same problem, which is that having a presence and basically showmanship or at least consistently showing up and being loud about the fact that you're there sometimes is actually reflected in calm and promotions and things like that. I'm curious how you think about that? And if there are ways to mitigate some of those challenges.

Zach  
Yeah, that's a common question about coordinating is how do you keep it from turning into a popularity contest? And one of the things we're really exploring right now is how do we have the conversations, you know, like I was saying, before it converged, we said the conversation was more important than the allocation. And so when you're done with a coordinate circle, you have this map, and you can see what the community is saying is valuable, who's valuable because of the work that they did. And we're exploring a lot like how can we start to facilitate more these reflective conversations? Because really, the value in a coordinate allocation is the conversations that it can spark around what's valuable. Oh, I noticed this person gave to give to everybody in their circle, is that because they really think they're valuable? Or they're trying to gain the system and make everyone feel indebted to them? To give them give? Or is it because they don't know the value that everyone gave, and they want to just reward everybody equally, being able to have those conversations as a DAO is really critical. And so one of the things we're exploring are, what are the different ways where the different tools that we can build or collaborate with for people to have those kinds of conversations. And going back to what we were talking about before the capacity to have a critical conversation really results in, in me being able to go to a person and say, I think you're getting overpaid, just because you're nonstop posting in the discord? Can we have that conversation as a community? What is valuable? What do we want to be rewarding? So I think that if people just shrug and take it as, as a given that this is just the way human systems work, it can be detrimental, you know, and counterproductive. But if people take these results of the circle as a way to really engage in the principles of the Dow and the purpose of the Dow and and having these conversations about what is valuable trying to move things forward, what do we want to reward? What biases are at play and how rewards are getting put out those kinds of conversations, if you're able to have them are going to make for a much more robust and high performing system over time.

Unknown Speaker  
I love that. And I also have this question that's emerging in my mind, which is when you talk about doing this type of thing at converge, where you're having open and honest conversation and allocating a given invoice based on that. Do people agree or consent to those distributions before it's done? Like is there a way to sort of raise concerns and who actually pushes it forward because it does feel like there's still a little bit of power dynamic at play, especially when we start to think about actual discussions around these things where part of it is, yeah, Zack, you think you did a certain amount of work? I don't think you did that much work. Maybe I'm missing something like what at what was the space for discussion and back and forth there versus just open and honest feedback that was taken to be true.

Zach  
Yeah, it's in some ways, it's difficult to compare because we were a group of colleagues who are working really closely together in real life. A lot of times when we did, we affectionately called Thunderdome, even though it was always like more of a love fest than the Thunderdome. But we were actually sitting around a table together. And we had built a tremendous amount of trust. So it was easy to have these conversations and are not easy. Sometimes they were really hard conversations, but we were we had the capabilities and capacities to have them. And being in real life obviously, is a huge bonus and advantage and doing that. And the other thing is we were able because we had enough trust and enough self awareness in the system, we didn't need to have a whole bunch of rules or protocols and how we did it, we basically said the conversation lasts until everybody says, Okay, I understand. This makes sense to me, I feel good about this. And sometimes that was really easy and fast. And sometimes it took a lot of processing. But you know, it creates a really good cycle of we call the team hygiene, because all sorts of little petty resentments and things that kind of build up just from being with people can get worked out in these conversations. One of the things I think about a lot, maybe too much all the time, is how can we create those same sorts of systems and structures in this pseudo anonymous asynchronous text based world of DAOs? What are the ways that we can have these really critical conversations that help people develop as people? What are ways we can do them skillfully, you know, so that people aren't barging into really hard conversations that they're not prepared for? I think that's something we think about a lot from a design perspective at coordinate, as we think about the ways that our products can and should grow. And, you know, it's something I think all DAOs are trying to figure out and think about, which is how do you have these critical conversations? And how do you process the results of compensation in a way to where everyone says, like, yeah, I feel good about this, while also balancing out that and what you don't want is everyone's part time job to be now the compensation manager. And we have a bunch of meetings and forums and feedback about this process. One of the things that people really like about coordinate is, it trades off some nuance for ease of use and speed. Instead of trying to introduce too many objective metrics, we really leaned into the subjective side, again, thinking that this is at least a better approach than then having a few people making these same subjective, subjective decisions about about value.

Unknown Speaker  
It's interesting, because it does feel like it's very much subjective value assessment, but distributed such that it's fair, which does feel like an important trade off that a lot of DAOs are making. I think for smaller groups doing comp that makes sense. For other types of decisions that are no

Zach  
small but important distinction is fairer, whether there's ever a really fair payment brings in so many different factors, what's really reciprocal, what really adds value, sometimes I think it's a helpful metaphor to think about just the next time you're in a conversation with a group of friends think about at the end, if you were going to try to assign value during this conversation. And if there might be one person that just wouldn't shut up and was blathering on, but kept the conversation going. You know, there's one other person who's very quiet, but when they speak up, they say something that that totally changes the tone or the perspective of things and what's valuable, also changes all the time. So I think what we're always trying to pursue is something that's slightly more fair, or hopefully a lot more fair. But really something that's also flexible to take into account more and more different kinds of contexts that people are operating in and find lots of different ways to reward people. There's many kinds of compensation. And one of the things we're thinking about a lot right now we have people allocate give to each other in one circle, but there's a lot of different things that we can do a different kinds of give that might be allocated, or different types of circles that are nested in each other according to different achievements or NF T's that you hold. There's a lot of room for iterating. And there's many forms of currency and there's many forms of reciprocity and many forms of acknowledging people's contribution. And that's something we're really keen to explore.

Unknown Speaker  
Yeah, and the other thing that's interesting about some of the way that you frame a lot of this is this idea that because coordinate is subject in a lot of ways, you're not formalizing comp systems too much, which I feel like has always been a benefit for any time that I've used coordinate. What's been nice about it, and we were talking a little bit about this earlier, but in a different context, you have this emergence of value allocation among people, rather than forcing certain structures on people, which feels like we sometimes do in DAOs. We're like, Okay, we're gonna do this governance system. And it's like, you should probably figure out what works by experimenting, and then just formalized whatever structure actually works. And it feels in a lot of ways, like, that's what comp should be doing more broadly, we're just not really great at figuring that out. Because people also need to, like rely on an income that they know is coming in. So it's an interesting trade off, it feels like between those two things.

Zach  
Yeah. And ultimately, our hope. And what we're seeing is DAOs are experimenting with different ways to iterate and hybridize emergence isn't just things happen, right? Emergence is, as you try stuff, the right solution, the right structure will start to emerge. And you follow that and codify it, what's working? So our hope is that as people use coordinate, it's flexible enough to where you can start to see oh, here's what's working well about this, certainly, here's the patterns, we're starting to see. How can we start to codify some of these things, if consistently, the same, people are always receiving the bulk of the rewards, maybe we need to put them, you know, on a more permanent salary, and make more space for bonuses and things for other parts of the community. So our hope is that coordinate has a flexible enough tool to where it becomes really an iterative approach to understanding how people can contribute value and get rewarded and incentivized for it.

Unknown Speaker  
Yeah, I feel like sometimes in web three, we build these systems that are very much meant for machines, but also almost punish people when they don't do what's expected. And I think there's something really powerful to instead of saying, here's the expectation, if you don't meet it, we're going to punish you, which is how some systems feel versus saying, here's the expectation, let's make that really clear. And then we're going to distribute value based on what you do. And I do think that there's something really powerful to that, as opposed to having this like, carrot and stick approach, which feels much less good as a human.

Zach  
Yeah, and I think there's certainly like we talked about, there's a lot of trade offs in the subjective approach. But one of the strengths of it is that people can contribute things. There's a lot more room for experimentation and innovation, for people just to try stuff. And it makes more room for both individuals, and then hopefully, the collective intelligence to go with its gut. So you know, how do we create systems where intuition and gut feel play a more important role, where we've overcorrected? Obviously, in sort of default world to meticulous KPIs, and OKRs. And what gets measured gets managed, right? Anything that you can't measure is irrelevant. What's funny is the other half of that that Deming quote that obviously, always gets left off is he said, what gets measured gets managed, but the most important things are the hardest to measure. I think our challenge with so much in the DAO space is how do we evolve and create these new systems without throwing out what was good and useful with the systems that we're replacing? And that's always going to be our challenge. If you say like, oh, KPIs are useless, we just need to be totally emergent. It's like, well, obviously not KPIs can be an incredibly effective tool in the right context. But how do we blend that with subjectivity and emergence as well, going back to this point about paradox? I think one of the biggest challenges and opportunities in DAOs is how can we make systems that are a lot better at embracing all of the different paradoxes? How do we get ones that are really smart? And really heartful? How do we get to organizations that are very high competence and focused on excellence and also inclusive all the different ways of knowing and different kinds of skill sets that that people bring, and not just the ones that are standardly accepted, being able to bridge all these paradoxes is, to me like the biggest opportunity in Dallas, because it's sort of allow us to, to create this world that's a lot more resilient and frankly, pleasurable to live in.

Unknown Speaker  
Yeah, a lot of it reminds me of in a weird way, I got an Oculus, which for anyone who doesn't know is like a VR headset. And as I was watching my dad, play around with it, he had something on his finger in the VR world, and he was blowing on it in the real world because he forgot that he was in VR for a minute. And so it was funny because I watched him do this thing. And I was like, Holy shit, something like blowing on your finger unless we build systems for it is dark going to get inherited into like the metaverse or, you know, whatever. And I feel like in DAOs, there's something very similar, which is that if we don't think about systems to bring a lot of those things in, we accidentally create organizations that are missing them. And there are all sorts of reasons that those things exist in the first place. But also, like, organizations that are less rich and don't have these opportunities for things that maybe are not easy to measure, are not organizations that I think people want to live in. And so it's a really interesting balance between trying to really intentionally do these things, while also meeting like, yeah, business requirements. And I love the idea of being able to take systems that maybe don't have to protocolized and codify everything, because instead, we're going to take humans and allow them to create space for it. And I feel like maybe not every tool can do this. But I think that if we can get more tools that do some of that, we'll be in a much better position in DAOs. More broadly.

Zach  
Oh, no, no question. I think the whole premise of your podcast is, is how can we make all of these things more human? How can we account for the fact that we are these emotional, irrational creatures who up until just a few 10s of 1000s of years ago lived in very small bands, where body language was the primary mode of communication? I think it's easy for us to forget that what we're trying to do is an insanely high degree of difficulty, we're swimming upstream against millions of years of evolution in trying to communicate without eye contact. And without gestures, part of what we need to do is think about how do we incorporate more of those. And I think the other thing we need to do is have a lot of compassion for ourselves and be grateful that we've even gotten this far. And what we're trying to do with DAO is to create ways for people all over the world to collaborate and do things asynchronously anonymously, like this is a wild degree of difficulty, and really audacious what we're trying to pull off, we should take time to really acknowledge and celebrate, that we've even gotten this

Unknown Speaker  
far. are tribes of humans, the first true coordinate circles

Zach  
are sure I can get done with that. I

Unknown Speaker  
feel like they kind of are like you've food that's distributed to those who created value. It's not give tokens. It's close.

Zach  
I feel like there's a whole rabbit hole we could go down where you know, in, in some tribal societies for sure. It was very clear if you were contributing value or not. Because if you weren't, you were out, it was a lot more high stakes. If you're contributing or not to a tribe than to a DAO, I feel like,

Unknown Speaker  
Yeah, it's interesting, because if we relied solely on capitalistic systems, and exclusively, that I'm afraid we might end up in that world, though, there's a lot of different nuances to dive into. And that statement that make that right, more or less accurate, I will say, which is always the case. Yeah, that's super, super interesting. And I think all of the thoughts on comp are, are really interesting in the context of people trying to figure these things out. And I love your notion of hybrid models where ideally, you have combinations, because I also know that there's a lot of concern about having people who are doing work and then not being guaranteed certain comp is also a challenge. And so your point on hybrid solutions feels like a really good way to approach that. So that people are getting paid for work that they do, but also getting compensated if they are excelling in that work.

Zach  
And I think there's a whole world to explore it the different ways that you get compensated as well. There's reputational compensation, there's compensation of access. There's a lot of people that are so excited about web three and DAOs. And they're just interested that it's worth it to them to work for free, quote, unquote, it's a lot better than paying to go to university, for example, to come and get actual experience and working in this thing that they think is where the future is heading. At the same time, if we really want to get the adoption that's required, we are going to need to make sure that people have ways to be rewarded and actually make a living and right now that's still really small. I'm really encouraged by all the experiments that are going on and figuring out how can we compensate people in in creative and sustainable ways?

Unknown Speaker  
Yeah, and I think the single thing we've learned is that you don't have a whole community vote on your compensation, people that you work with Sure, bonuses share actual compensation, no,

Zach  
which is wild, because that's how many corporations do it it's like some central body that's far away from the work actually happening and That was one of the impulses of coordinates. It's like how can we move the decision making closest to where the work is actually happening, because presumably, that's where the richest highest information about value added lives.

Unknown Speaker  
And when you do that, you also give people a lot more power, it feels much better to know that I have an actual say, and how values distributed. And I'm very close to the people who have a say in that versus feeling like I'm being told how much I'm getting paid.

Zach  
Exactly. We found in our limited burgeoning user research that even if people got slightly less than they were anticipating they were more satisfied, because they had a say, and they understood the process of how it was allocated, as opposed to just like, oh, you get a grant. Now, for this much, it's much less of a black box.

Unknown Speaker  
Oh, yeah, it just feels much better. Because you can also acknowledge how different people value your work. Like, I think it does make a huge difference. And to me, that's one of the most exciting things about web three to also see just like, alright, this person doesn't value my work, but they values x work. Cool. I know what they valued now. And that's actually incredibly useful.

Zach  
Yeah. And now we can talk about it. And we have, and we have some basis for the conversation about why and should you're in what can I do better? Or what are you misunderstanding and your allocation? Those are really the conversations that I think will, if DAOs get really good at them, that's what's going to help DAOs out compete from other kinds of structures.

Unknown Speaker  
Yeah, collective intelligence is not amplified, and everyone's just lying to each other. Or not being honest, that's just not gonna work.

Zach  
Yeah, if we're gonna make it, it's because we all co create that system together. I like that someone said, we're all going to make it, we're not going to make it meaning like, we're all going to be in some Promised Land and be rich together. Like we're all gonna make it, it being this new system. And that has to be all co created together. And we're all exploring these ways to more effectively capture collective intelligence.

Unknown Speaker  
Damn, that's a beautiful way to close out. Before we do though, I have a segment at the end of the show, which is what is your favorite thing? In your wallet? It could be an ERC 20 and NFT. Anything, but what is your favorite thing in your wallet?

Zach  
My favorite thing in my wallet has got to be the Tarot deck that one of my co founders at coordinate and a contributor Yearn. Zahm created this amazing Dejan tarot deck and you can click through it and draw people should just go check it out. It's really an amazing thing that he made and it's the first NFT I ever bought also, so it's it's sentimental for a number of reasons. That's my favorite thing.

Unknown Speaker  
Oh, I'll have to link it and try it out. Is it like gonna tell me what's in my Dejan future?

Zach  
Exactly, exactly. It's up for you. Of course, it's terrible. It's up to all sorts of interpretation. But it's both beautiful and, and creative and also hilarious to have this whole tarot deck based on a lot of the means and bizarre words that we all use when talking about this space.

Unknown Speaker  
I love that. Well, I'll have to link that in the show. Notes. Zack, where can people find you?

Zach  
You can find me for sure in the coordinate discord. I'm on Twitter at fifth world, Zack. And yeah, you can reach out anytime. We are always excited to find people who are keen to collaborate on building this whole new system that we're calling web three.

Unknown Speaker  
You're going to build it, which we love. We're we're all going to build it. We're all going to build it. Well. Zach, thank you so much for coming on the show. It was so fun to chat.

Zach  
Awesome. Thanks again. Jason. Appreciate it.

Unknown Speaker  
If you liked what you heard, please make sure to rate and subscribe to the podcast. I always forget to do this for podcasting like but it's actually super useful. Also, if anything resonated with you, or if you want to continue the conversation, hit me up on Twitter. I'm at chaser Chapman. I absolutely love talking about these things. Thanks again for listening