HAUS Party LIVE! Notes: 6/24/2021

--- ###### tags: `Haus Party Live` --- # HAUS Party LIVE! Notes: 6/24/2021 ## Notes From the [Livestream](https://www.twitch.tv/videos/1066258582) [YouTube Link](https://www.youtube.com/watch?v=ByHbP0N31cY) **Topics** `Tokens are incredibly powerful incentive mechanisms, and power corrupts. We'll jazz and jam on why tokens are so powerful, how things can go awry, and what can be done about it. This conversation is based on the "Goodhart's Forest" series by Spencer - google it, it's awesome.` - Goodhart's Law and Goodhart's Forest - How can DAOs work around Goodhart's Law? **Hosts & Guests** - Felipe Duarte, dekanbro, vengist - Spencer Graham ## [[1:40]](https://youtu.be/ByHbP0N31cY?t=100) Updates (DAOhaus Universe) - Uber Haus moving forward! - Product side: Moving toward the *Boost Marketplace* and create a destination platform for DAOs to excel and find new things to do to plug into their DAOs - Key piece of the DAOhaus vision for awhile — lots of infrastructure in place, refining UX, and bringing things together - Keep this on your radar, coming soon! - [[3:30]](https://youtu.be/ByHbP0N31cY?t=210) DAOhaus Discord Reboot aiming for launch next Weds. 6/30 - Focus on bringing wider community into the core groups - Creating an on road from the "edges into the core" and new Discord plays a role in this - Gamification, tips, good first issues on all of the tracks - Map of ecosystem of DAOs ranging in focus and purpose from signal DAOs to LP DAOs - [Collab.Land](http://collab.Land) tipping in the DAOhaus Discord! - First xDAI test — Layer 2 solution using state channels → gasless tipping - Can tip on a whim for insightful comments and contributions! - Being able to work on things that we are truly passionate about — "Sinking forks into this spiritual meat." ## [[10:15]](https://youtu.be/ByHbP0N31cY?t=615) Goodhart's Law & Goodhart's Forest 🌱 Our journey starts in a garden... - Collaboration coming out of serendipity that's been fostered in the community - **What is Goodhart's Law?** - Idea if you set a metric, KPI, or quantifiable target/goal as a thing to achieve, it can stop being a good measure of the thing you originally wanted to do - Reason is that the measurement becomes 1 dimensional after this, and humans are multi-dimensional - Hard to encapsulate the broad set of goals that any group of humans have into a single KPI or measure - Trying to jam all of an organization's incentives into one measure can result in bad gaming scenarios and other negative outcomes - Spencer started seeing some of these risks in the token and DAO space - Tokens are powerful: Tokens are a KPI with an incentive built in - Token price may be the KPI, but the KPI may also be mapped to something directly/indirectly to an objective - Incentive to improve on the KPI is built into the KPI itself which is an incredibly powerful construction - Need to be careful about misalignment between what the token is measuring/connected to and what the protocol/DAO goal is — misalignment introduces lots of risk - **Who is Goodhart?** - Economist Charles Goodhart put name on the phenomenon - [[14:33]](https://youtu.be/ByHbP0N31cY?t=873) **What is Goodhart's Forest?** - Mashing together of *Goodhart's Law* + tokens on a blockchain - What happens in a permissionless environment? - Three Big Dangers: - 1) Misalignment, discrepancy of what token represents and what DAO/protocol wants to do (*Goodhart's Law* at its purest) - 2) Even if token price is 100% aligned with objectives of what token represents, this becomes difficult to assess success based on token price given volatility and noise in crypto market - Becomes hard to use token price as way to keep people aligned in short-term - 3) Especially the case in an adversarial, permissionless environment like Ethereum where whales, other projects, and other "mempool shananigans" can get in the way of using token to measure success of protocol (especially when anyone can buy the token and do things — adversarial & permissionless) - Anyone can buy up token and do things with it — starting to see Governance protocols do things with this - *Conviction Voting* helps address this - Timelock Delays on implementation of code changes as determined by governance - More centralization of actual decision execution (Snapshot voting + Multisig pattern) but this leads to risks of centralization and other questions - What are some other drawbacks of this pattern? - Can't have all of signers together! Plane going down... Core team can't travel together - Tradeoff between having some protection of things going wild with the token, and other risks related to centralization such as collusion rug pulls, plane going down, requirement to trust people involved, etc. - Is there a way to mitigate these risks/dangers without centralization? - [[19:56]](https://youtu.be/ByHbP0N31cY?t=1196) Spectrum of DAOs and decision making about allocating resources: - On one end of the spectrum: extreme **protocol** that is heavily mechanistic - *Coordination is emergent property* of private local incentives people facing within created mechanism (Quadratic Funding is an example of this) - Contribute funds to a thing and Quadratic Funding algorithm figures out funding without anyone needing to talk to each other - Can forego serendipity that can come from social coordination and direct collaboration - On other end of the spectrum: working together and communicating - Messier, but can get **beautiful serendipitous things** coming out of this (Moloch DAO epitome of this) - People can coordinate, play around, talk, and iterate on what they come up with - Snapshot + Multisig can forego a lot of this serendipity that comes out of social coordination and working together - Starting a community WITH a token vs. starting one WITHOUT a token ### [[22:31]](https://youtu.be/ByHbP0N31cY?t=1351) Starting and Maintaining Communities - "Benevolent Dictator" of projects - When projects need someone to be acting as the leader, need to have a core team (if the DAO is too slow moving at first) - Multisig works but can become difficult to distinguish between capital contributions of core team — there is no Rage Quit or parametric shares - 1 vote per signer so its difficult for someone to contribute 10x more than someone else and have equal voting rights - Moloch DAOs promote a feeling of safety — can leave at any time you feel is needed - Creates a safer space for interaction within the DAO - Basic level of financial security and safety promotes different types of interaction within the DAO and is an underrated element - Someone has to have the initiative to start things up but power needs to be distributed "quickly and often" to be safe for the community - Adding new signers to multisig "raises coordination cost of iterating on power and community" - Can get locked into the multisig and could result in Benevolent Dictator still being in that role for a longer duration - Aim to have *more* Benevolent Dictators as soon as possible - [[28:47]](https://youtu.be/ByHbP0N31cY?t=1727) *Iterative alignment* - What is the catalyst for the behavior? - Where does the driver of the behavior come from? - There are situations where groups converge without Benevolent Dictator and are collectively legitimized - "If you want to go fast, go alone. If you want to go far, go together." ### 🍃Building Safe Gardens - [[31:00]](https://youtu.be/ByHbP0N31cY?t=1860) Seeing a gradient and range... - **One extreme is Tyranny of Structurelessness** **— no formal power structure that can be challenged - **Other extreme is the Goodhart's Law** where we're driven by numbers and KPIs and therefore stop acting as humans and begin gaming - **Within this range we have navigable communities** that aren't a clique of elite people coordinating — "Deserts of personal gain optimizing agents" - [Safe Gardens in Goodhart's Forest - Part 2](https://daohaus.substack.com/p/safe-gardens-in-goodharts-forest) starts at this point — how to build a safe garden? - If scared of the forest, build yourself a garden - Moloch DAO! - Put up walls and a gate — sounds extreme and counterintuitive to inclusive community culture that we want to create → - Some amount of permissioning is important to "not let sharks into the aquarium" - [[33:56]](https://youtu.be/ByHbP0N31cY?t=2036) **Even if you think you're creating something without a membrane, there is a membrane** - They are invisible, but they exist - They are inherently invisible for people who set up the system - Even if you didn't intend to put up a wall/gate, you still put one up - Strive to become aware and need to understand the passcode and share it with folks - More about *what walls and gates* are best for the community and making them happen and these can be put in place instead of invisible walls and gates - Less about putting up walls and a gate and more about deciding what walls and gate you want, and what's best for the community - Allowing people to build trust and work together - Trustless immutable ledger helps, but we're still people and want to build trust ### [[36:18]](https://youtu.be/ByHbP0N31cY?t=2178) **The Narrative Catalyst of the Group** - 1) Membrane - 2) Price of crossing the membrane - 3) Catalyst - Manifesto, idea, something - Could be a particular persona that upholds and personifies this idea - If they fail to uphold the idea, they may be kicked - How do we build a social system that has enough aggregation power to survive waves of sheer economic incentives that can be manipulated by larger market cap organizations? - Navigating the *internal greed* that we're all susceptible to as humans - Enemy may also be within: What are the avenues available to recover from conflict events that could be large? - What are the *healing components* when conflicts arise (especially if it's a large conflict)? ### [[38:43]](https://youtu.be/ByHbP0N31cY?t=2323) **Community Mitosis** - Iteration goes both ways — needing to scale up AND down iteratively based on where the values in the community are at a particular space and time - **Community Mitosis** — if things change, people should be able to leave and communities should be able to kick members - Doesn't always have to be conflict, could be more directions and people can naturally fork - Paths should be available to all - "Love letter to Moloch DAOs" - Rage Quit and Guild Kick are powerful concept - DAO is responsible and accountable to YOU (can leave via Rage Quit if DAO breaches your trust) - YOU are accountable to DAO (DAO can Guild Kick if you no longer align with values) — but you still get your assets upon kick - "Rage Quit is the community prenup" - Every membership comes with a built-in prenup - Make Rage Quit even more explicit in our DAOs and not hide it - "Community health and DAO health requires people making explicit decisions about whether to stay or go." - Deciding to stay furthers commitment and alignment to dAO - Leaving makes the community more aligned by having folks who are misaligned leave - Many people don't like Rage Quit being part of the core treasury - Moloch DAOs are great at supplying structure where everything happens at a social layer - Unopinionated protocol — humans involved create structures that are important - Social layer is big and rich around infrastructure - Community can align iteratively over time and can make changes around self-governance, but *changing underlying infrastructure not possible* - Need to fork and create a new DAO ## [[43:16]](https://youtu.be/ByHbP0N31cY?t=2596) Moloch v3 - Being worked on right now! → [Moloch v3 Gitcoin Grant](https://gitcoin.co/grants/2918/molochv3-codename-baal) - Moloch DAOs are great at supplying minimal infrastructure where things are then happening at the social layer on top. - Unopinionated protocol — humans involved can create structures that are important (social layer very rich with Moloch infrastructure underneath) - Moloch v3 allows for DAOs to change the underlying infrastructure *without needing to fork* - Starting to allow the DAO to upgrade and evolve itself and change skeleton over time - Changing voting periods, changing new logic to how shares are created and burned - Exciting aspect of v3 that fits with spirit of Moloch - Mash up of a COMP token and a Moloch DAO — very flexible - [[47:24]](https://youtu.be/ByHbP0N31cY?t=2844) Won't be something where everyone needs to migrate to — if v3 works in the way it's being designed, it is the answer to question of **"I'm a Moloch DAO, and I'm maturing over time. Now I want to grow. I want to leave my garden. What do I do next?"** - v3 allows for this to happen within the same DAO — can change parameters and turn on additional functionality to **"send vines into the forest"** - Built on a robust structure and culture that's been evolving and maturing over time — tokens less likely to fall victim to Goodhart - Is there a storyteller in the Moloch Mystics group? - Some of the ingredients are starting to come together! - *Minion*: Bespoke little guy doing bidding of DAO after successful proposal - [[49:36]](https://youtu.be/ByHbP0N31cY?t=2976) *Shaman*: Integrated into the DAO, very powerful, can do powerful things through proposal (rework shares, burn shares, etc.) - Element of the contract - If a DAO has whitelisted the Shaman, the Shaman can be used to do powerful things based on predefined logic - Minting shares based on [Sourcecred](https://sourcecred.io/) or [Coordinape](https://coordinape.com/) in an on-chain fashion - Opens up a huge design space that is larger than current Moloch v2 design space - **Moloch v3 can be exactly what v2 is but also way more** - Looking forward to a world where theres lots of Coordinaping and then we can see the story - [[55:24]](https://youtu.be/ByHbP0N31cY?t=3324) Imperfect, but functional distributor — imperfect is good because less susceptible to a single optimal Goodhart strategy, but helps with visualizing the structure of the group after (especially if repeated often enough) - Can address Tyranny of Structurelessness - Aligned with spirit of Moloch — provides minimal infrastructure on top of which humans can aggregate information and creativity together and the result is more than what we started with (emergence) ## Resources - [Wikipedia: Goodhart's Law](https://en.wikipedia.org/wiki/Goodhart%27s_law) - [Spencer Graham's writing on *Goodhart's Forest*:](https://daohaus.substack.com/people/363495-spencer-graham) - [Tokens and Goodhart's Forest - Part 1](https://www.notion.so/Haus-Party-Notes-6-24-083c15ad00f649cea449c5077f29cc48) - [Safe Gardens in Goodhart's Forest - Part 2](https://daohaus.substack.com/p/safe-gardens-in-goodharts-forest) - [Growing out of the Garden - Part 3](https://daohaus.substack.com/p/growing-out-of-the-garden) - [Moloch v3 Gitcoin Grant](https://gitcoin.co/grants/2918/molochv3-codename-baal) - [Sourcecred](https://sourcecred.io/) - [Coordinape](https://coordinape.com/)