Grant Proposal: Hats Protocol: DAO-native roles and authorities

Grant ID: 2u4pjj9

Summary:

Currently, DAOs do not have a way to explicitly delegate or revoke roles, responsibilities, and authorities in a way that aligns with the complexity of their operations. This requires alternative mechanisms which Hats Protocol offers.

Hats Protocol allows DAOs to explicitly delegate specific roles or projects, along with their associated responsibilities and authorities, to individuals or pods (or any smart contract). This is accomplished using non-transferable NFTs, or “hats”, via the ERC1155 standard. DAOs can create hats to represent specific on-chain powers as well as off-chain access rights. DAOs can then decide who “wears” each hat they create, as well as deactivate hats, revoke them from wearers, and hold wearers accountable to their commitments.

Using Hats, DAOs can more effectively organize day-to-day work and execute on important projects, all while preserving the ability to dynamically shift as things change. Power is delegated but can always be revoked, as the top of the hat tree is not an individual executive but the DAO as a collective. This allows temporary hierarchies to arise and disperse based on factors that are more relevant to achieving the objective at hand – such as context, merit, and commitment – creating a heterarchy. As a result, the organizing structure of the DAO isn’t imposed, it is co-created. Hats provides an enabling infrastructure for DAOs while embodying the values of decentralization and autonomy that are so fundamental to their existence.

By working together with token-gating platforms, Hats Protocol serves as one half of the DAO-native authority delegation ecosystem. Hats can ingest data from any on-chain or off-chain source to automatically assign and revoke hats to individuals, groups, or other contracts. Then, by plugging the token IDs of these hats into token-gating platforms, a DAO is able to easily and immediately make sure the right actors have the appropriate access and permissions all the time. In this way, Hats Protocol tokenizes authority so that DAOs can manage authority using the same decentralized governance techniques that they use to manage other resources. “Wearing” a hat is currently represented via a non-transferable ERC1155 token in your wallet, though Hats could be extended to use off-chain representations as well, including verifiable credentials.

We believe that the most useful authority delegation protocol in this space will be the one that is most interoperable with other applications and organizations, and Hats intends to be the most open and developer-friendly protocol for authority delegation available. Hats Protocol embraces modularity to make it easy for DAOs to customize and automate the logic determining when a hat is active and who wears it.

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If available, please enter a link to your project below:

Are you applying as a team or individual?:
Team

What type of grant are you pursuing?:
Project (one-off)

Please select the category your project best fits into:
Other

Please select who you think will benefit from your project?:
Other

How much funding are you looking for? (USD):
20000

Have you received funding from somewhere else?:
Yes

If yes, please describe where you’ve received funding from and how much you have, or will, receive:
We have received less than $2k from our community via Gitcoin grants, but otherwise have not received other funding. However, we are currently applying for grants from the Ethereum Foundation and MolochDAO that will enable us to engage additional contributors to develop the Protocol itself. We are also applying for a small grant from MetaCartel to support the implementation of Hats within DAOs—engaging them as Alpha testers, along with Graph Advocates DAO, to inform the design and ongoing development of the Protocol and its associated features.

What’s your vision for how your project will impact The Graph and/or web3?:
From the perspective of a DAO, DAO governance structures frequently get in the way of DAO effectiveness. The drive to distribute decision-making too often leads to a lack of clarity on individual roles and responsibilities along with an over-reliance on consensus, slowing the pace of action and limiting experimentation. Meanwhile, the drive to decentralize power too often leads to insufficient mechanisms for holding people accountable to their commitments, and, ironically, processes for authority delegation entirely depend on trust.

When DAOs do delegate authorities to make decisions and get things done, it usually either happens in very broad (and non-revocable) ways that introduce an insecure model, or by trusting only a few people to carry out the actions of the DAO without holding them explicitly accountable to the DAO as a whole. In some cases these pathways may be sufficient when DAOs are small and trust is high, but as DAOs and other forms of decentralized organizations scale and embrace pseudonymity, constrained delegation with built-in accountability mechanisms and effective authority management systems will be increasingly critical.

We anticipate three types of users of Hats Protocol:

  1. DAOs create hats in order to delegate authorities and access to multiple protocols and apps within a single system, create explicit and revocable power structures, automatically assign authorities to the winners of DAO elections, and drive role clarity within their organization.

  2. DAO members and contributors, including subDAOs, pods, and individuals, wear hats that delegate them certain authorities and responsibilities to do valuable work on behalf of their DAO.

  3. Web3 apps and DAO tooling platforms integrate with Hats Protocol to enable new capabilities, including:
    a) Web3 apps, including smart contracts and web apps, integrate with Hats to give DAOs revocable access controls for their own features,
    b) Token-gating platforms integrate with Hats to give DAOs revocable access controls to many other apps,
    c) Sense-making tools integrate with Hats to visualize the current work structure of a DAO, including both ongoing roles and one-off projects, and help people identify which hats do not yet have wearers and that they could be eligible for, based on certain conditions (such as specific tokens, badges, or verifiable credentials the individual has in their wallet),
    d) Aggregators and analytics tools provide data to Hats for modular automations to determine whether someone is eligible for a given hat and/or fulfilling the associated responsibilities of a hat, and help DAOs manage explicit structures for authority delegation.

Specifically regarding the Graph AdvocatesDAO, we propose engaging with Graph AdvocatesDAO as an Alpha tester for Hats to help inform the design and ongoing development of the Protocol and its associated features. We believe Hats Protocol can support Graph AdvocatesDAO to significantly increase the clarity and effectiveness with which people join and leave committees and teams, are authorized to vote on specific proposals or gain associated permissions, and be delegated specific roles and be held accountable to the commitments associated with that role. Hats Protocol will help the Graph AdvocatesDAO to be more effective and less prone to capture, and Graph AdvocatesDAO can help Hats Protocol develop in a way that is most useful for its current and future operators and contributors.

Additionally, with respect to The Graph, we are working on creating a front end that is going to leverage subgraphs, and we anticipate bringing large numbers of Hats users into contact with The Graph over the long-term. In the process we hope to develop a strong relationship between Hats Protocol and The Graph.

What can you share about any past work that is relevant to this grant?:
As active participants in this space for multiple years, we have viscerally felt the issues that Hats addresses. Hats Protocol is born of our own challenges in the DAOs and decentralized organizations and networks we’ve participated in, and the people we stand shoulder to shoulder with. Our team members have led a number of initiatives and projects that have informed this understanding:

Raid Guild availability and commitments mechanism: a decentralized approach to holding talent accountable within a service DAO by requiring staking from contributors if they want to take on work – nintynick & Spencer. RIP: Raid Commitment Staking and Bonus Rewards · Issue #75 · raid-guild/RIPs · GitHub

Raid Guild Auction Queue: a market-based approach to new client on-boarding within a service DAO, allowing prospective clients to bid tokens to be next up for an initial consultation – Spencer. GitHub - slgraham/guild-auction-queue: A queue ordered by token bidding, designed for Raid Guild consultations

Smart Invoice: a web3-native payments tool that combines payments escrow, milestone payments, and dispute resolution to solve the “invoice dilemma” and minimize trust requirements between clients and service providers – Spencer. https://smartinvoice.xyz/. Introducing Smart Invoice. A new way to get paid for services… | by Spencer Graham | Raid Guild | Medium

Decentralization Health Index: a way of quantifying decentralization across political, economic, and computational factors, adapted from Ketsal – nintynick. Decentralization Health Index - Google Tabellen

DAO Contributor as a Service: a research presentation on the intersection of AI and DAOs, and how automation will emerge from DAOs in a way that is aligned with DAO stakeholders and enables exponentially increased efficiency – nintynick. DAO Contributor as a Service v1 — by nintynick - Google Präsentationen

Anticapture: a framework for modeling capture-resistant governance from first principles, leading to a formal definition of a DAO – Spencer. Anticapture — spengrah

DAOhaus contributor compensation program: a flexible, DAO-native approach to compensation used by the DAOhaus core contributors since November, 2021. See also this op-ed in The Defiant describing the approach – Spencer. Discussion: Contributor Compensation Revamp Proposal - Warcamp (DAOhaus Core Contributors) - DAOhaus. A Big Test for DAOs: Honing New Compensation and Contribution Practices - The Defiant

Impact Networks: Book on the network approach to human coordination, based on a decade of research and experience, published by Berrett-Koehler Publishers, October 2021 — authored by David Ehrlichman. https://www.amazon.com/Impact-Networks-Connection-Collaboration-Catalyze/dp/1523091681

groundw3rk: A network of DAO operators to improve coordination and accelerate learning across the DAO ecosystem — catalyzed by David with Spencer and nintynick as core contributors. Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.

EvenGov: a services DAO that supports progressive decentralization of web3 projects by mapping governance and incrementally delegating authorities to the project’s community — founded by nintynick with David as contributor. http://evengov.com/

DAO Camp: A four-day gathering of DAO leaders from around the world — organized by David in collaboration with Cabin and groundw3rk. DAO Camp: The DAO coming of age moment

Can you share any information about current/past web3 experience?:
Hats Protocol is currently led by Spencer Graham, nintynick, and David Ehrlichman.

Spencer Graham has been a full time DAO contributor and leader since 2020. As a core contributor to DAOhaus, he helps with product development, internal operations, governance mechanisms, communications, and tokenomics. He is also a member of Raid Guild and groundw3rk, where he brings his deep experience in DAOs to bear on horizontal DAO ecosystem initiatives. Before focusing full time on DAOs, Spencer previously contributed to clr.fund. https://twitter.com/spengrah

nintynick is a mechanism designer and full-time DAO contributor for the past 1.5 years. After studying computer science to make video games, he went on to build AI startups focused on using natural language processing for commercializing new inventions, and a neurosymbolic AI that managed shared knowledge graphs. In DAOs, he has contributed to EvenGov as a governance facilitator, Raid Guild as a mechanism designer, groundw3rk as a volunteer facilitator, and the DIA as a summoner. https://twitter.com/nintynick_

David Ehrlichman has been a leader in the fields of impact networks and decentralized organizing since 2013. He is cofounder of Converge and author of Impact Networks. With deep experience in facilitating multi stakeholder collaboration, he has helped form dozens of impact networks around the world and has been a founding coordinator for impact networks addressing issues as diverse as environmental stewardship, economic mobility, access to science, and civic revitalization. Over the past year he has been a core contributor to numerous efforts to strengthen the DAO ecosystem, including as lead organizer for DAO Camp, founding steward of groundw3rk, contributor to EvenGov, and lead facilitator for DAOstar One’s monthly roundtable. https://www.linkedin.com/in/davidehrlichman/

Why are you interested in contributing to The Graph and/or web3?:
Our drive to build Hats Protocol comes from the pain points we are actively experiencing in the DAOs we’re participating in. A significant part of our motivation for working on Hats is advancing the DAO and Web3 movement overall. We believe that more effective coordination at scale is our only recourse for the overwhelming complexity of the issues we face, and we aspire to help humanity transition to the post-scarcity economy, leveraging decentralized governance to support a safe, fair, and healthy world for all. From our perspective, DAOs are the most capture-resistant form of governance ever devised, and we are motivated to build new tools and mechanisms to bring that to fruition.

Using subgraphs in the Hats Protocol design makes The Graph an integral part of the value Hats Protocol aims to deliver in the broader DAO ecosystem. We have also observed the progression that Graph AdvocatesDAO has made over the past 6 months, from the beginning days of the DAO design and its summoning in DAOHaus. The decentralized organizational structure of Graph AdvocatesDAO would seem to make it a well suited candidate as an Alpha tester, which would make Graph AdvocatesDAO an early beneficiary of the benefits Hats Protocol provides.




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3 Likes

This proposal is incredibly intriguing and definitely from a positive light. There are many structural challenges when it comes to DAOs, especially with regards to governance and these same challenges may seem quite minute in centralized organizations. What is being built here with the innovative idea of Hat wearers (via NFTs) being delegated/revoked through DAO consensus is a real progressive step in attacking the hierarchy dilemma that decentralized organizations inevitably face.

DAOhaus is such an effective tool and is being used by Graph AdvocatesDAO to execute all on-chain proposals. Seeing that Spencer, a core contributor to DAOhaus, is also helping to lead Hats Protocol, I am excited to test out this innovative tool of Hats Protocol with Graph AdvocatesDAO as an Alpha tester if this proposal is green-lighted. I am in full support of this grant proposal!

5 Likes

I love this! I have seen situations where a DAO becomes centralized amongst a number of individuals. Something like this would keep us all honest and decentralized!

  1. Can you please provide a breakdown of how the money would be spent?
  2. There are many other project owners within the Graph Advocates and Graph Advocates DAO. Would extending the Alpha testing to them also be something that could be done or beneficial?
4 Likes

There are several elements included in this proposal that make me really excited. First, I feel this a great overall scope for a meaningful and realistic progression for DAO tooling in the web3 space. It addresses a real issue that we have also seen emerging at the Graph AdvocatesDAO. Who is part of which team and what exactly are their responsibilities, etc? Important questions that will only keep growing as we grow the DAO.

At the Graph AdvocatesDAO, we are addressing these questions via GOCs which provide details over important processes, structures and workflows. What’s still missing is a clear ownership process of how to assign/delegate responsibilities to those GOCs. That’s the problem space I can see Hats Protocol solving for nicely. We have a DAO>Committee>Team construct in place where Hats can help us build appropriate tree structures with agreed upon governance processes.

Lastly, I also want to highlight the team’s reputation strength in the web3 ecosystem, all of whom are established contributors having shipped meaningful decentralized products. Spencer in particular is already well known to the Graph AdvocatesDAO, as he was a close and highly valuable partner in establishing the DAO’s on-chain parameters and helping us guide through the summoning process in DAOHaus. I overall highly support this proposal.

As @Twenx has noted, I would agree that it would be beneficial to get a cost breakdown of the proposal. It might also help to clearly highlight what exactly is envisioned to be in scope. Creating such a protocol clearly requires more than the funding that is asked for, so I would like to better understand the success criteria and possible timeline for that.

Thank you for this proposal, looking forward to the discussions!

2 Likes

The proposal is very interesting and can help the DAO in a concrete way. My only concern is whether it applies to this community grant. I think it should be handled as a tool or development grant.

2 Likes

Hi all, thanks for considering this proposal and for your comments so far. In response to two questions raised so far, I want to share a bit more about the cost breakdown of the proposal, and our thoughts on keeping Alpha testing small at this time.

First, relative to costs, below is a roadmap and cost-breakdown for Hats Protocol development generally. The resources from Graph AdvocatesDAO grant will be especially important for Milestone 2, as it will be supportive of our time to work with Graph AdvocatesDAO and implement Hats Protocol to address your issues, as well as development time to ensure it meets Graph AdvocatesDAO’s needs. If this goes well, we anticipate applying for a larger grant from the Graph Foundation to help fund subsequent milestones.

Specific to the question about expanding Alpha testing to both Graph Advocates and Graph AdvocatesDAO, as an open-source protocol, anyone can test and use Hats. If there are specific people to have conversations with who may be interested in implementing Hats, we’re very happy to do that. Right now we have bandwidth for white-glove implementation with only a small number of DAOs, but our intention is to expand to more users as Hats matures. Even within the Graph ecosystem, we recommend constraining the scope of this for now, but we would be very excited to help expand if this Alpha test is successful.

Hopefully this additional info addresses your questions, but please let us know if not. We’re happy to elaborate!


Hats Protocol Roadmap

Milestone 1 - Alpha on testnet [completed]

  • Milestone Goal: Validate technical viability and strategy
  • Projected completion date: completed 7/15
  • Estimated FTE: Done (approx two months of 2 FTE)
  • Anticipated budget: n/a
  • Main objectives:
    • Hats Protocol: Hats.sol Alpha shipped

Milestone 2 - DAO pilots with Alpha on mainnet(s)

  • Milestone Goal: Validate value prop by testing in real DAOs
  • Time duration: One month
  • Estimated FTE: One month of 4 FTE (3 core team members plus 1 FTE-month of contributor bounties)
  • Anticipated budget: $5k per DAO to compensate time associated with white-glove implementation of Hats Protocol, plus $15k to be used as bounties for non-core contributors to help further develop the tool and ensure the tool works in the way that addresses core needs of the DAO Alpha testers
  • Main objectives with associated tasks and deliverables:
    • Hats Protocol core contract: Update and launch Hats.sol Alpha on L2 mainnets based on initial 3-5 DAO users’ requirements
    • Automated granting and revoking of Hats: Develop specific Oracle, Conditions, and Admin contracts for initial 3-5 DAO users’ requirements

Milestone 3 - Front-end App Alpha and Subgraph Alpha

  • Milestone Goal: Improve usability (interface) and utility (partnerships) and scale usage
  • Time duration: Two months
  • Estimated FTE: Two months of 4 FTE (3 core team members plus 2 FTE-months of contributor bounties)
  • Anticipated budget: $30k net cost (will be used as bounties for non-core contributors)
  • Main objectives with associated tasks and deliverables:
    • Automated granting and revoking of Hats: Continue developing specific Oracle, Conditions, and Admin contracts to add utility for specific DAO use cases
    • DAO admin & contributor user experience:
      • Front-end app: Launch front-end app Alpha to test full self-service implementation so users can create / mint / revoke / transfer / deactivate Hats without interacting with contracts directly
      • Subgraph: Create subgraph needed to support front-end app Alpha
      • Documentation: Add documentation for front-end app
    • Integration developer experience:
      • ERC-1155 standard: [already implemented]
      • Subgraph: Complete integration partner-focused subgraph requirements
      • Integration documentation: Complete initial documentation for integration partners

Milestone 4 - Protocol v1 on mainnet(s) + Front-end App Beta

  • Milestone Goal: Front-end App Beta launch that supports full self-service implementation (0% manual implementation)
  • Time duration: Two months
  • Estimated FTE: Two months of 5 FTE (3 core team members plus 4 FTE-months of contributor bounties)
  • Anticipated budget: $60k net cost (will be used as bounties for non-core contributors)
  • Main objectives with associated tasks and deliverables:
    • Hats Protocol: Launch Hats.sol v1— stable contract state that we feel will not be updated for the foreseeable future
    • Automated granting and revoking of Hats: Third party Oracle, Conditions, and Admin contracts are capable of being developed and deployed without the support of Hats core team
    • DAO admin & contributor user experience
      • Front-end app: Front-end App Beta launch that supports full self-service implementation (0% manual implementation). Create / mint / revoke / transfer / deactivate Hats without interacting with contracts directly
      • Subgraph: Subgraph Beta
4 Likes