DAO Constitution and Governance Agenda

Abstract
Research on blockchain technology have been increasing in recent times thus new innovations are being produced in the market and it’s an opportunity for better way to utilise the resources in a manner which everyone can take part in the decision making process based on consensus-based, distributed autonomy. The governance peculiarities of DAOs is fairly unexplored, and this is where this research commences. In an exploratory multiple case study consisting of three popular DAOs Aragon, Tezos, and DFINITY, their governance peculiarities are worked out by analyzing grey literature to understand stakeholder interests, incentivization, control, and coordination mechanisms, technical considerations, and external influences from off-chain entities. In the context of an on-and-off-chain continuum, it appears that DAOs provide mechanisms that might enable autonomous decision-making but, at the same time, find themselves strongly influenced by the interests of various stakeholders. So a formal constitution is needed in-order to set some guideline to resolve possible conflicts of interests.

Introduction
Blockchains like Bitcoin and Ethereum have shown their capacity to scale globally while retaining their capacity of avoiding double-spending. However, the maintenance of uniqueness of a finite number of tokens at a global scale comes at high costs. While those costs are often identified with the environmental impact of hashing, a more subtle issue is worth attention: the immutability of the ledger created fractures within the communities underpinning each blockchain. To understand reasons and modes of those fractures, this study digs into the technicalities and governance problems that a new wave of blockchains aims at tackling.

Blockchain projects in their early days, relied on informal ways of governance resembling features of the free and open source software (FOSS). Blockchain governance, despite insiders’ common beliefs, is not exhaustively defined by FOSS because of its peculiar reliance on the mutual dependence of several parties including system developers, system maintainers, and users. This mismatch between belief and practice did not go unnoticed: Bitcoin and Ethereum went through and survived several troubling forks, spin-offs of independent and incompatible ledgers. In practice, each time a problem about a blockchain arose, never-ending conflicts unfolded without the possibility of a formal authority. Thus, the lack of formalised rules for conflict resolution is substituted informally by charismatic leaders and heated debates.

Aragon and Tezos are examples of a new wave of blockchain projects, which develop decentrally-governed infrastructures to execute decentralised applications (dapps). Their governance thereby builds on principles of so-called decentralised autonomous organisations (DAOs). They try to leave the risk of ‘civil-wars’ behind by formalising the rules to change the rules when need arises. In short, if the first generation of blockchains formalised consensus maintenance among unknown parties, this second generation aims at formalising the rules according by which consensus rules can be changed.
Therefore a DAO constitution is needed which will contain passages that define how powers are divided, and how regulations are agreed upon before being enforced.

DAO Governance Options:

**#Governance of Blockchain: ( Focus: Blockchain system ) **
#On Chain Governance: ( Blockchain-inherent )
Blockchain-inherent components that facilitate the governance of the blockchain system. Examples: transaction validation system, built-in incentive schemes.

**#Governance of Blockchain: ( Focus: Blockchain system ) **
#Off Chain Governance: ( Blockchain-agnostic )
Blockchain-agnostic components that facilitate governance of the blockchain system. Examples: system-centric decision-making in online communities or legal bodies.

# Governance through blockchain ( Focus: Use-Case )
#On Chain Governance: ( Blockchain-inherent )
Blockchain-inherent components that facilitate governance of the blockchain use-case. Examples: governing a monetary system through a blockchain system.

# Governance through blockchain ( Focus: Use-Case )
#Off Chain Governance: ( Blockchain-agnostic )
Blockchain-agnostic components that facilitate governance of the blockchain use-case. Examples: use-case-centric decision-making in online communities or legal bodies.

I can write in details on Governance system. These are just the overview. Thanks all.