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May 17, 2023

Building DAOs

Amy Jung’s Vision for Open Networks and Communities

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Building DAOs: Amy Jung’s Vision for Open Networks and Communities

In this episode, we talk to Amy Jung. She was the Head of Community at MakerDAO and currently DAO Operations and Strategy Consultant at Shared Realities, where she focuses on progressive decentralization execution.

Amy tells us her experience growing and managing DAOs, principles in designing in this space, how open source principles can shape the future of design, and her advice for open network builders looking to start their own projects.

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Show notes

Timestamp

00:00 Introduction

00:56 Amy’s background

03:11 Framework for building DAOs

04:27 Why a DAO?

07:51 Progressive decentralization

11:52 Overcome challenges and grow DAO projects

13:19 Designing, creating, and managing DAOs

15:21 Importance of open source in decentralized web

18:00 Advice for your crypto project

18:41 What’s next for Amy?

resources

Links

Follow Amy on Twitter or LinkedIn

Amy’s talk on Progressive Decentralization 2.0 model

Whole Crypto Catalog: Progressive Decentralization

Offscript (for Creatives in Web3)

Show notes

Transcript

[00:00:00] Teaser: Why do people choose to decentralize?

[00:00:02] Amy: There's mainly four reasons why people decentralize in the first place. First is value at scale is a larger opportunity than a single team. A classic example. Also Wikipedia, you can see that when structure makes sense more when there's multiple people trying to create efficiency, there is actually more value than a single team doing that.

[00:00:22] Kaz: Welcome to 023 podcast, where we interviewed emerging founders in the web three ecosystems. We're a co-host. I'm Kaz. I'm Kevin.

[00:00:30] Kevin: Today we are joined by Amy Jung, former head of community at MakerDAO and DAO Operations and Strategy at Shared Realities.

[00:00:43] In today's show Amy tells us her experience growing and managing DAOs, principles and designing in this space, how open source principles can shape the future of design and her advice for open network builders, looking to start their own projects.

[00:00:56] To start. Amy begins by describing her unique career journey from designer to head of community development.

[00:01:03] Amy: I have a unique background that combines design, operations and community. And my career is definitely not straightforward. So, prior to Consensys, I am joining this space full-time. I started this organization that focused on emerging design and technology, and I was hosting a series of events on design and blockchain, and this was back in 2017, so there really weren't that many designers and there wasn't a really clear, what is design and blockchain?

[00:01:28] And, that curiosity is what led me to two things. One, I start to hack in my first my first hackathon, which is a crypto hackathon. And that was the original ETH Denver. And that energy and everyone's willingness to help was just so amazing. And that definitely caught me for sure.

[00:01:45] And then the second was that I start to look for more designers in this space. And that's actually where at that time, consensus had rapidly the most amount of designers. And that's where I met the head of design Sarah Mills, who ended up speaking at my event. And that's how I got, you know, lured into joining Consensys as a design operations lead, which was really cool cause I think even in the design world, design operations was a new thing.

[00:02:11] Then going into Maker was that actually a designer from Consensus recommended me to another project that was happening in the community development team at Maker DAO and.

[00:02:22] What's interesting there is that I actually started as a contributor on a grant. Let's see what this is about. And that's where I met Rich Brown, who was the head of the department there. And I start to do more and like program managers, we were launching a lot of programs and when he decided to leave, I took over that head of community development role there.

[00:02:42] There is where I actually focused on this two intersecting moments, which was the growth of the DAO and at the same time, the disillusion of the, the foundation, the Maker Foundation, because it had already after five years, completed its mission to bootstrap the community.

[00:02:59] Being able to work on both the early development of a DAO as well as support the end of an organization in its progressive decentralization.

[00:03:08] Kevin: Next up Amy, will talk about a framework for building DAOs as an alternative organization model in her book called moving from close organizations to open networks.

[00:03:18] Amy: Essentially after I left Maker, I wanted to take what I've known. I was reflecting a lot on the experience itself, but I wanted to share that and scale that. So I ended up working on a practical framework that people can use to better wrap their head around what progressive decentralization looks like in their organization.

[00:03:35] Obviously we have progressive decentralization from Jesse Walden's, original essay, but this was a practical, okay, I had this experience, this is what it looked like, and when I started to write that framework, I also at the same time was consulting with various orgs on their path to decentralization.

[00:03:53] So it really helped me embrace this new role as this practitioner researcher where I apply the research that I do in real time with the orgs and that helps validate some of these ideas. And I started to even do some add-on work because I didn't want the bias of maker experience to take over.

[00:04:10] And that's when it was so clear that there were certain patterns emerging and that really had me this pool to write this book, which captures the emergence of DAOs as an alternative organizational model for coordinating and building on decentralized technology.

[00:04:25] Kevin: On the subject of DAOs as a different organization model, Amy tells us what a DAO means to her and why a DAO as opposed to a traditional entity.

[00:04:34] Amy: I think that technical definition is pretty straightforward. Decentralized, autonomous organization, but then everyone's like, what does that actually mean? I like to take the view of DAOs through an organizational design lens, and that's just my own perspective.

[00:04:47] Essentially, people are trying to build this decentralized technology and in order to collaborate and do that in a way people have been experimenting, well, what if we build this and coordinate in a different way that isn't just a single entity?

[00:05:00] You start to develop these characteristics about startup and I think DAOs are gonna have essentially the same. Concept where it's like I'm building a DAO. And it doesn't mean that, you building a SaaS product is very different from building a consumer focused or even enterprise.

[00:05:15] They all differ in how you build something. But the idea of this is the characteristics. Those remain the same in this overarching way. And I like to think about DAOs in that same model. So also in this book that I'm writing I think about these characteristics and just try to see and pattern match.

[00:05:32] I put them in what I call open networks, which are both open source and internet native, which means there is. A lot of transparent information. And there's peer-to-peer checks and balances, and then this open sharing, which allows for a natural multiplier of scale. And why, okay, so these characteristics, why would you do that?

[00:05:53] I noticed that there's mainly four reasons why people decentralize in the first place, and that's because first is value at scale is a larger opportunity than a single team, which is this multi-player creation that we hear. And that's an a classic example. Examples. Also Wikipedia, you can see that emergent structure of.

[00:06:12] When strategies in DeFi make sense more when there's multiple people trying to create efficiency, there is actually more value than a single entity or single team doing that. The second one is what I call sharing ownership with people who value the platform. And this is more focused on distributed ownership through with multi-party owners.

[00:06:34] And this, we also saw in this. Original takeover of Twitter many, many years ago when Twitter was doing what was not having any revenue and they want to sell the company to privatize it. And there was a bunch of people who were, hey, we as the users want to buy this as a cooperative collective.

[00:06:50] And Nathan Schneider, who also does a lot of work in crypto, was also part of that initiative. And that is a great example where we do see the characteristic of sharing the ownership in actually a meaningful way. Instead of just an entity holding all its power. And then I think the two that are last two that.

[00:07:10] Or softer reasons is there's a fear of losing market share. So after Uniswap and Sushi, that incident blur and OpenSea, you know, a lot of teams just do it as a offensive or defensive mechanism, which is also quite interesting. I don't know what that means, but that's also why teens might decentralize.

[00:07:30] And then, the last one's probably the clearest, which is regulatory compliance. So a lot of teams trying to eliminate information symmetry and reduce the efforts of founding teams of just the founding teams. So those are the main characteristics of why see people decentralized.

[00:07:45] But doesn't mean that that's the only reasons. It's just what I see so far.

[00:07:50] Kevin: Regarding the topic of progressive decentralization, Amy provides a few examples of what this concept looks like when applied to DAOs

[00:07:58] Amy: Often I just ask using this framework that is actually based on working in public, which is a book by Nadia. It's a summary of open source actually in itself. And it has this quadrant and in the, they , it breaks down from federations to toys.

[00:08:15] And stadiums. And then last, I'm missing the last bit, but essentially a toy is something that has, is a very specific niche that people wanna play with. A lot of hackathon projects, for example, are there. And then when you have a federation, you can imagine when there's a high volume of users and a high volume of contributors.

[00:08:32] So there, the ratio is quite high. And then the stadium is when there's a very small group of contributors that are creating it for this wide range of users. So a federation example is Ethereum at large. Tons of people are building on Ethereum at a higher level. Wikipedia could be a Federation, for example.

[00:08:50] When we look at a stadium, it could be something that is a client team. So the client's team are they're, it's a small, probably a small team that are funded by grants or just limited funding. And then they have this wide range.

[00:09:03] And often in this chart, I ask a team, where do you think you are? And then where do you wanna be? And if there are a lot of teams wanting in that stadium stage where they're, we want to actually give more ownership and actually get more contributors and they wanna move into the federation.

[00:09:20] I think that's a great starting point for actually that progressive decentralization. When they're just a team that is a toy and , we haven't really found product market fit, and, and they're exploring. I think it becomes really hard to do progressive decentralization at that stage because so much changes progressive decentralization is a process which I also outlined in my book as this matrix, right?

[00:09:42] So as you're progressing over time, There's different areas of the organization, the people, your stakeholders change. When you have token holders, it completely changes the dynamics of your, of how you think about stakeholders versus like engineering. If you run a project that's closed and then you wanna open, you wanna run it an open source project, that's also a lot of change that moves through it.

[00:10:04] And so first step is, where are you and is this a good time for you to have that progressive decentralization and what does that timeline look like? And then we start to work on various stakeholders and outlining the stakeholders. Who are the people in your organization and outside your organization?

[00:10:20] Who are your partners, your VCs? How do they all interact? And that's where there's a lot of stakeholder interviews just to see. And uncover what rules are there, what relationships are there, what's the expectations, what are the challenges? Where do you not align on things? And that moment uncovers a lot of then the how you wanna progressive decentralize.

[00:10:39] And that progressive decentralization part is more about the team, initial team thinks about how they want their ownership and responsibilities to be distributed. This is often where there's, The biggest disconnect with the community and the founding team because just cause you launch and here's all these tokens that are governance doesn't mean people know how to hold those responsibilities that the initial team has been working through for years.

[00:11:02] And then the last piece is more I try to co-create whenever possible. And so working with teams to design the structure that includes checks and balances for powder power and accountability is really big. So this comes out in how you build your governance infrastructure as well as, what are these strategies for allowing stakeholders to self-organize that could be something super small as in, let's start a grants program that is really small to, let's launch a governance framework, right?

[00:11:28] There's such a big scale. You start doing these in pieces. I outlined some of these in granular details in my book, so hopefully it'll be really useful for people to see what's coming up a little bit more.

[00:11:41] Kevin: When it comes to overcoming challenges and growing DAO projects, Amy outlines her three primary principles.

[00:11:49] Amy: The first one is just generally the paradigm shift. A lot of people come from traditional web two or, you know, are used to a lot of different things and getting people into the mindset of these characteristics of DAOs, letting go of control, you know.

[00:12:01] It's a different way to work and that's just like the first step. And that takes a lot of time and trust to get people to experiment a little bit. The second is that DAOs are actually each DAO was quite unique, so the needs and the stacks is always really different. So I can work with teams where they need more support on operations and some of them need more.

[00:12:22] Support on governance design, and so each team is, each DAOs super unique. So it's always constant change. It's not like you can apply the same framework. And this is why the framework that I even talk about is not, here is one to 3, 4, 5, 6, 7 steps. It's like a mix and match. Utilize these different strategies that different DAOs of use to think about how you wanna craft it based on your needs as an organization.

[00:12:46] Lastly, getting a doubt from zero to MVP to like final means. There's a lot of org structure and cultural change. Being able to keep people informed while not overloading them with constant new change and information is probably the biggest challenge. I don't, I don't think anyone has really solved that.

[00:13:04] We just do our best to be concise. Inform people, be patient and ensure that there's engagement throughout the process.

[00:13:13] Kevin: Let's revisit Amy's design experience. She discusses the importance of design and the creation and management of DAOs and how it might affect the user experience, adoption and participation in the community.

[00:13:26] Amy: I focus on org design, so I can break down the process there. It goes back to that original, the question previously where I was talking about the defining various stakeholders. So doing a lot of stakeholder interviews I think a lot of user research teams need at that stage to better understand what is it that these different Groups of people need and what they expect, what communications, where is there a disconnect?

[00:13:51] Use a lot of that user research, validation, user experience part in that first initial step. Then the second part is really about, when I was talking about clarifying the ownership and responsibilities, it's really, I would say so key to ensure that there's. That alignment in an understanding on both sides of communication.

[00:14:12] When you're trying to design systems where you have shared ownership or you're giving ownership, co-creation is still the best me methodology of inviting the people who are gonna take that ownership into the process. And this is where I think community development is really about, we try to create grants or programs that allow, even contributing to documentation.

[00:14:33] You are now owning the content and understanding the processes the same time. And so how do we create more moments like this where there's interaction and sharing knowledge? Just because your initial team doesn't mean you know everything. How do you create more experiences where you allow the sharing and transferring and knowledge and of these processes?

[00:14:52] I usually dip into traditional design thinking and design processes to actually get the activities where I can pull that and utilize that, especially in really various groups of people. That's why also it's really cool, but everyone uses Figma, at some point in DAOs. I think that's really exciting.

[00:15:11] No one used to do that in traditional organization.

[00:15:13] Kevin: In her talk "evolving design in web three through open source principles". Amy discussed the importance of open source in the development of the decentralized web. She goes into detail on how open source ideas might influence the future of design and the crypto industry.

[00:15:28] Amy: Then I was really focused on sort of UX and product design from that angle. And today it's more about systems design. So when I talk about co-creation, I think that when, when I think about open source, the idea of literally open information and opening up the process.

[00:15:46] That's where I get this co-creation principle. And where I've seen DAOs, what they do is actually, they're, people are more collaborative in creating a processes for co-creating mission statements principles. So it's not necessarily a product necessarily. We haven't seen a lot of examples where , more open processes for product development exists, but there is a lot around really fundamental foundation constitution, principles, values, really core things that co-creation together, which I see often, which is they do a really big survey, they invite all the down members in and then they start to craft.

[00:16:17] The second one I think about is I mentioned cross collaboration I think in the talk, and I really believe in collaboration over competition. And what's really cool is that specifically in open source in general, designers who work in various organizations come together.

[00:16:32] For different reasons to learn from each other. And so that's also something we have at Defcon UX Audits, which I help put in every year. And that's where any designer in the space can sign up to perform an audit, a UX audit for teams. And the teams themselves you know, get an hour of free time with the designer.

[00:16:50] And it's really cool on both sides because they learn from each other and designers are not used to working outside of the context of what they're working on. We have off script, which was this web3 designers its own thing, but. I also love that anytime we can emerge and coordinate around design patterns or we can have off the record discussions or focused conferences where they share lessons.

[00:17:12] That's been really helpful in the design of rules. Boundaries, memberships, governance. I think structurally that's when the cross collaboration stuff can work really well together because you, these systems take a long time to see the effects of, you wanna ask around for best practices and see what worked and what did it.

[00:17:31] That collaboration has really worked really well. I think there's really interesting discussion around IP and creative use for things NFTs that there's some discussion on really. Board apes was the first to really harness this to grow the community.

[00:17:44] I think we see Shibuya and different. On the creative side, how IP is developed and shared. I would keep watching that space to get a sense of open source and web and design process colliding.

[00:17:57] Kevin: In the next part, Amy offers the following advice to aspiring open network builders who are looking to start their own projects or organizations in the crypto space.

[00:18:06] Amy: I think a lot of teams has helped me, they've told me when they're starting their own doubt or they're, you know, trying to think about what that is.

[00:18:13] This is what the framework is for so that they can just start to see ahead or see best practices in different Use cases. So in the book it utilizes different stories from different teams, maker, how did Maker do it, how did optimism do it? And it really comes from what has been developed.

[00:18:31] I'm hoping to finish the book by the end of this year. It's been on and off for two years just cuz I was thinking about it and then writing it, but it's almost there.

[00:18:41] Kevin: To wrap up. I asked Amy, where did she go from here with her new DAO projects.

[00:18:47] Amy: I'm working on this resource that I think accompanies the book really well. So that's, it's an open source DAO Collective catalog is what we're calling it. And it is more of a web interface where you can search different DAO events and it builds on Justine from Optimism's work that was a bunch of forum posts of all these DAOs and events, when there was them publishing a funding guide for example, or, and you'll be able to search, what are all the funding guides of.

[00:19:12] All the DAOs that have published it. And so this is why we call it a catalog of DAO events. So that people can actually just get more practical and see examples so that we're hoping to launch. We have just made a little team probably and the end of May or so, so that will be the open source project version of it, and then the book.

[00:19:31] We'll give more specific stories that outline it. And then, yeah, I'm continuing to consult with DAOs and progressive decentralization capacities.

[00:19:38] Kevin: If you like this zero to three episode, please leave us a review. We're just starting out, so every review really helps follow us on Twitter at zypsycom if you don't wanna miss an episode. That way you'll be able to see every time a new show goes live. Thank you for listening to this episode of zero to three.