Given the growing popularity of decentralized autonomous organizations (DAOs), there have been some debates over the effectiveness of certain reward structures and governance models. While some believe that incentivizing governance activities is a positive approach, there are others who think the practice is corrupt.
Irrespective of the side you pick, the bottom line is that rewards and financial compensation are such a big deal within DAO circles. Currently, a member of a group needs to put forward a proposal to request funding, which is then subjected to a voting and approval process. Although effective, this structure requires a lot of management and is difficult to scale. It also makes it harder to keep track of individual contributions within the DAO.
Coordinape, a DAO-tooling infrastructure, is pioneering a new alternative for an efficient reward distribution system. In particular, each member of the DAO has the freedom to decide whose contributions should be rewarded.
The tool works by allocating a fixed amount of GIVE tokens to each member of the DAO at the beginning of a funding circle, aka Epoch. Members provide a description of what they have been working on during the current circle and it is up to each individual to decide who will receive their GIVE tokens. At the end of the Epoch, the GIVE tokens are converted to GET tokens, redeemable for USDC, while unallocated tokens are burnt.
Commenting on its decision to take GIVE on-chain and how the move benefits users, Coordinape said:
GIVE is one of the best reputation indicators in Web3, because it represents peer to peer recognition for valued effort […] 8000+ wallets have collected GIVE in the 18 months since we went out of beta, and we are psyched to let them finally use their GIVE for more than just the compensation that came with it.
Meanwhile, Coordinape has rolled out a number of updates in recent times, including a new UX, automated circle access, and one-click epoch timing.
Speaking of updates, the company has also launched a new way for DAOs to manage circle membership using on-chain primitives like NFTs and tokens. Following a partnership with Guild.xyz, “Gift Circles can use Guild to create the parameters of membership, such as holding the DAO’s tokens or NFTs.”
The new feature of programmable membership is still in its MVP state. However, the company believes that it will be “useful for identifying aligned members for Gift Circles, and can also leverage many reputation and credentialing primitives being built in Web3, to bring in a wider range of use.”