Governance Roadmap | Q1 2022

The Ren ecosystem is currently made up of the Ren community, the Ren Core team that develops RenVM, the Ren Labs organization that is exploring development of applications on top of RenVM, our ecosystem partners and applications, and of course RenVM itself, that is made up of the Greycore and the Darknodes.

As we continue making progress in RenVM development, getting closer to the Mainnet Zero and subsequently the Mainnet One stage (RenVM Mainnet Release Plan. An overview of the path to Mainnet | by Loong | Ren Project | Medium), we are also getting closer to the point where having an organized DAO governing and managing the core parts of the Ren ecosystem is crucial for continued growth and success.

Currently, the Ren community is in a pre-DAO state, where it has a functional governance process where community members can discuss and propose, and vote on new proposals (Ren Governance Process), but it doesn’t have full control to for instance manage the Greycore members yet. What the community in the current Mainnet SubZero stage has, is control over setting the RenVM fees, as well as the ability to develop the governance process itself. Additionally, the power to whitelist H2H assets is now also part of community governance (Token listing proposals - Ren Forum).

As we move forward to the next stages, core activities like managing the Greycore and protocol updates (soft and hard forks) will need to be coordinated through governance, between the Ren community, Ren Core, and our ecosystem partners. These are very important activities from a security standpoint, that require proper structures and processes in place to check, verify and generally make sure any updates or upgrades are managed as safely as possible to not introduce exploits or bugs unintentionally. All while also being true to decentralization. Coordinating RenVM changes is more similar to Bitcoin or Ethereum upgrade forks than for instance a smart-contract update for a DeFi application that can be managed through an on-chain vote.

This comes with an expectation that the community can govern those features in an organized, fair, and safe way. While protocol changes will need to be carefully coordinated with Ren Core as well as any other technical contributor, it is crucial for proper decentralization that the DAO itself is independent and capable on executing these tasks.

A DAO also promises more things than just governing protocol level changes. A DAO can have the power to directly lead the growth of the ecosystem in the way the members of that DAO wishes, and have the resources and organization to make it so.

This suggests that the time to bootstrap a DAO is now.

Bootstrapping the Ren DAO

The most important thing needed to bootstrap a DAO is a treasury able to sustain a DAO. The launch of the Community Ecosystem Fund (RIP-000-005: Launch a Community Ecosystem Fund - #44) was the first step to make this possible. The CEF as structured now allows us to organize Community Funding Rounds similar to Gitcoin rounds, where proposals can be submitted and Darknode operators get to vote on the proposals they want to back, and where the results dictate how much and where capital is deployed from the CEF.

The CEF is likely not the most appropriate vehicle to bootstrap a DAO though. Instead, a proper DAO treasury would be a more flexible structure, where the community can organize and deploy capital much faster and towards things needed to maintain and grow the DAO, not just used for investing in the Ren ecosystem on a quarterly schedule.

Most importantly for bootstrapping a DAO, is a treasury that the community can utilize to incentivize the buildup of the DAO itself. Money is the most powerful tool for coordination.

Below is a suggested list of actions to bootstrap the Ren DAO:

  1. Establish a DAO treasury
    a. Develop the ability to withdraw from CEF [technical part done by Ren Core and currently in review]
    b. Build governance procedures to manage treasury [treasury working group in development]
    c. Deploy initial treasury growth strategies [in development]
  2. Launch the first Community Funding Round to test and legitimize the CEF and its structure
  3. Form working groups with specific mandates
    • Treasury [in progress]
    • Business
    • Marketing
    • Governance
    • Community
    • Protocol

There are likely many other activities that can be done to help bootstrap the DAO, and it is encouraged to bring those forth for discussion. The list is only a possible starting point.

Final notes

The Ren Core team is fully committed to developing RenVM. Further, with the launch of the Ren Labs organization, additional development teams are and will be set up to build out interesting applications on top of RenVM, with the first application being Catalog.

It’s important to note that Ren Core will always have a focus on core protocol, which is its strength. Governance, community, and marketing, are some of the areas where a Ren DAO would thrive.

Finally, the Ren Labs organization will always provide full support to the community and the future DAO. At the same time it is expected of the future Ren DAO that it takes responsibility and agency over the roles needed to manage and grow a decentralized protocol and its ecosystem. Close coordination and cooperation is what will ensure the continued success of the Ren ecosystem.

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The current CEF balance is 6 BTC, does the team think this is enough to bootstrap a well-organized DAO? Any well-run organization needs leadership and dedicated members that are properly incentivized to keep groups on task and drive progress. Many of the other DAOs competing in the blockchain landscape have tens of millions if not hundreds of millions, this leaves us at a severe disadvantage.

I feel like an additional framework/structure is needed for each of these working groups. For example in the business category:

How much authority does the DAO have to negotiate on behalf of RENVM? For example, if the DAO wanted to secure low-cost cloud service fees for all DN operators? How would a contract like this be signed when there isn’t an entity to contract with.

If the goal of the business working group is to create opportunities for DN operators and the RenVM ecosystem this could require the ability to incentivize developers to build more products and secure major protocol business using RenVM, these types of arrangements require capital, legal guidance, and a clear objective to guide the direction of the operation, based on a clear understanding of the development capabilities of the team and what promises and timelines can be honored. How can this DAO align with the team so that a successful structure is in place?

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The kind of business operations DAOs primarily will engage in is negotiating deals with other DAOs, such as liquidity management, incentives, integrations, mergers and acquisitions etc.

We can only speculate how DAOs in general will look like in the future when it comes to having legal entities that can interact with the real world, so concerning ourselves about that now won’t get us far. It would very likely not be possible to negotiate with cloud service providers at this point in time because there is no precedent for it.

Regarding the business working group’s authority, it would have the authority the DAO has given it, which is up to the DAO. This is all within the limits of the DAO’s power it has itself of course. The DAO we are talking about now will govern RenVM, but it could potentially expand to more things in the future as well (but to be clear, the DAO has no authority over Ren Labs).

There is of course already full alignment between Ren Labs and the Ren community given the shared interest in RenVM. As the DAO matures, we can expect more advanced kinds of relationships take place between the DAO and Ren Labs that for instance set more formal expectations and responsibilities in the way the development of the ecosystem continues.

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