The first year of building DAOs: successes and mistakes
Fingerprints completed its first anniversary this week! Yay!
There's a lot to celebrate, but I actually wanted to discuss something uncomfortable.
And there are A LOT of mistakes
Fingerprints was relatively early on the DAO hype and was able to fulfill its two initial missions without major mistakes:
Mission 1: to build a collection of Autoglyphs. We assembled a collection of 26 glyphs, or 5% of the whole supply
Mission 2: to build a collection of blockchain art — art that uses blockchain as a medium
But sometime around August our acquisitions slowed down. Not a lot of interesting blockchain art was being produced and the DAO was on the lookout for a new mission to really engage the community.
We hit our first wall: vision.
Besides collecting, what else should Fingerprints do?
Should we expand our collection into new verticals? Should we just accept that the DAO would not grow as much as before?
Two experiments happened on potential new areas for growth: DAO Incubations and Art Projects.
Today I'll talk about our mistakes and learnings in incubations. Tomorrow, on art projects
Our first incubation was Emergence DAO, a small experiment on building another DAO that ended up being joined by Flamingo DAO, Squiggle DAO and other fans of generative artist Arihz.
Emergence had a straightforward objective: assemble a collection and curate it using the burn mechanism of the Framergence collection. The financial and time commitment was relatively small, suitable to an experiment.
After that initial experiment we initiate a long discussion on a bigger incubation: RAW DAO, a DAO focused in one of the emerging markets in NFTs, photography.
To build RAW, we had a lot of discussion with the main photographers in the space and included 17 of them as founding members.
The launch was really successful. RAW raised 850 ETH with the sale of one artwork and almost 500 members participated in the DAO formation.
That’s when the problems started.
The list of mistakes in this incubation is long, but I can discuss a few:
The incubation proved to be much more demanding than anticipated and that harmed Fingerprints:
Fingerprints, still in its infancy and lacking proper strategy and organization, started to lose momentum because key people were focused elsewhere. I am to blame, because I was the one pushing us to incubate RAW.
Not having a clear idea for how we would organize to collect in this new market:
We used the same idea of a Curation Committee that we have in Fingerprints. However, photography is very different. The supply is massive. Photographers who were involved in the DAO sometimes pushed for their work or their friends’ work to be collected. Lots of conflicts of interest, lack of focus on collecting the best work.
Providing liquidity too early, and at an inflated price:
The $RAW token popped after launch on OTC, and we decided to use this price as a guide for where to place our liquidity provision. Big mistake, especially so early in its development. As the initial hype of launch died down, some people left the DAO and sold the tokens, making the price crash and morale to deteriorate.
No compensation for working members from day one: after a couple months, the activity in the DAO and community engagement were at all time lows.
While painful, we learned a lot from these mistakes. The turnaround started with a set of proposals by DAO member Lucas: the RAW Reform Act, comprised of:
an Strategic Plan to align on the DAO's objectives to
an updated Organizational Design
a Compensation Model that rewards work in a decentralized way, with some guardrails to prevent unfairness and bad actors to collude
Community Curation: making collecting transparent and participative, so all DAO members have a voice, not only a small committee
The numbers are clear when we see the effects of these reforms. Engagement in Discord grew 23x from February to April. Despite being still below ATH, token price almost doubled in the same period.
Qualitative indicators are also looking much better. Members started self organizing to produce a podcast and a new website. The collection is growing with more coherence and meaningful input from the community.
The experience we acquired at RAW now can also be used in Fingerprints. There are valuable lessons in decentralized contribution, community engagement, setting up a strategy and designing an organization that can be applied.
Learning from mistakes
Mistakes are a painful way to learn. You hit a wall, you reflect, you design a solution and see if it works. Usually, the solution requires iteration, and what gives you hope is that every iteration is a little better than the previous one.
It's much easier to learn from mistakes of other people. So if you're building a DAO, collect both your mistakes and those from others like you would collect rare NFTs. Make sure to keep them in a safe wallet and visit your gallery of mistakes often.
See you tomorrow!