Construct DAO as an Ecosystem

FreeBe DAO
5 min readJul 23, 2024

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Introduction

A common issue with DAO organizations is that their decentralized nature often leads to inefficiencies, unclear objectives, and unrecognized contributions from members who work diligently without seeing adequate rewards. The token issuance mechanism is essentially a Ponzi scheme and fails to ensure sustainable value generation within the DAO. This design, which allows a small portion of early DAO members to reap financial benefits, deviates from the original purpose of a DAO organization.

Therefore, we aim to design an ecosystem business model suitable for DAOs. By establishing an objective and fair value judgment system and organizational collaboration methods based on collective consensus, we seek to build a sustainable DAO ecosystem.

Definition of DAO

There is an emerging trend of creating DAOs or inventing DAO tools in the Web3 world. DAO is known as a decentralized autonomous organization, but what does it mean? Which action should DAOs take? What are the key measurements or indicators that make DAOs distinct from traditional organizations?

In this scenario, we would like to define DAO as a purpose-driven collective creation process, which is built upon explicit and tamper-proof consensus.

Definition of DAO Ecosystem

The concept of an ecosystem originates from biological and environmental sciences, intending to describe a diverse and dynamically balanced system where the constituent parts are often interdependent, share resources, and benefit mutually. In an ecosystem, various elements work in harmony, relying on each other to maintain the overall equilibrium. In this sense, a DAO inherently shares operational characteristics and developmental intentions similar to those of an ecosystem.

As an online collaborative community, a significant feature of a DAO is that its organizational assets and operational mechanisms are digitized. Therefore, when discussing the construction of a DAO ecosystem, we can simplify this concept to the creation and utilization of online data assets to achieve sustainable ecosystem value growth.

A DAO ecosystem is primarily composed of three parts: ecosystem resources, ecosystem collaboration mechanisms, and revenue models.

Ecosystem Resources

Ecosystem resources can be categorized into tangible and intangible types. Tangible ecosystem resources primarily include:

  1. Ecosystem data: such as behavioral data and data models within the ecosystem.

2. Ecosystem funds: funds in the ecosystem’s public accounts

3. Ecosystem members: individuals who contribute to the development of the ecosystem.

4. Ecosystem services: such as educational services, project incubation guidance, and shared infrastructure.

Intangible ecosystem resources primarily include:

  1. Ecosystem mechanisms
  2. Ecosystem culture

For any ecosystem’s development, the model is the starting point, resources are the conditions, but people are the most crucial element. To organize ecosystem members for effective value co-creation, we need to design a robust ecosystem collaboration mechanism.

Ecosystem Collaboration Mechanisms

The collaboration mechanisms of the organization can be divided into two parts: organizational structure design and role design.

Organizational Structure Design

Inspired by the fractal characteristics within the ecosystem, we only need to design the logical relationships between 2–3 levels of the organization to develop an infinitely fractal, thriving, complex organizational structure.

With the intention of “incubating projects,” we designed a three-tier organizational structure: “Town Hall-Project-Community.”

Root Node Organization: Town Hall

Purpose: Responsible for external communication/trade and fostering secondary node organizations internally.

Secondary Node Organization: Project

Purpose: To develop entrepreneurial projects with commercial potential based on ecosystem resources.

Tertiary Node Organization: Community

Purpose: To form a community structure around projects and become consumers of project value

Role Design

Everyone has different talents, and the value of a DAO lies in enabling people to do what they are good at and enjoy. When a new member joins, there needs to be a well-designed role mechanism to ensure that everyone is at the right place.

According to their abilities, we classify DAO ecosystem members into three types: Ecosystem Builders: Individuals with a strong sense of mission and powerful structural and construction abilities, capable of designing the foundational structure and critical operational mechanisms of the ecosystem.

Ecosystem Entrepreneurs:

Individuals with good business acumen, strong execution, and convincing influence, capable of creating business projects that bring value back to the ecosystem.

Ecosystem Co-creators:

Anyone who shares the ecological vision can join the ecosystem as a co-creator. Based on their type of contribution, co-creators can be preliminarily classified into the following categories:

  1. Ecosystem Maintainers: Organizers who can handle daily ecosystem affairs
  2. Capital Contributors: Investors who can inject funds into the ecosystem
  3. Resource Connectors: Individuals who can bring non-capital resources to theecosystem
  4. Skilled Experts: Domain experts with specialized skills
  5. Vision Supporters: Community members who understand the ecosystem’s concept and have participated in its internal affairs, even if they have not made direct contributions.

Ecosystem Revenue Model

A sustainable ecosystem must be open and capable of exchanging value with the external environment. We define a DAO ecosystem as the creation and utilization of online data assets. As a service entity, the ecosystem can offer comprehensive data resources and computational analysis services to external users. Under this model, there are four feasible revenue streams for the ecosystem:

1. Ecological franchise fees

The ecosystem can provide infrastructure services in a centralized manner and open them to external participants, helping both internal and external members reduce fixed system maintenance costs, such as server procurement and account maintenance.

2. Pay for Information

Contributors within the ecosystem will create high-quality informational data. External users who wish to access this data can purchase it. This includes but is not limited to virtual works, copyrights, rule systems, and software service licenses.

3. Pay for Service

The ecosystem can offer paid technical services to external clients, such as production, design, consulting, and more. The ecosystem can participate in profit sharing from these transactions.

4. Commercial project dividends

The ecosystem will guide and incubate entrepreneurial projects and, as an early stakeholder, participate in the future revenue sharing of these projects.

5. Business cooperation influence

Once the ecosystem has a strong user base and influence, it can achieve monetization through more commercial collaborations and advertising opportunities.

Conclusion

For any ecosystem to thrive, the model is the starting point, resources are the conditions, and people are the core. Designing a robust ecosystem organizational mechanism, inventorying and creating usable resources, helping ecosystem members grow their skills, and constructing a stable business project incubation and cash flow return mechanism are essential. This will foster a technologically innovative and economically prosperous DAO ecosystem, creating a metaverse where collective private efforts contribute to the public good.

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FreeBe DAO
FreeBe DAO

Written by FreeBe DAO

A digital collaborative utopia focused on contribution-based value distribution, empowering its members to be socially and economically safe.

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