The Nouns Trust

The Nouns Trust

The Problem

One of the most difficult things for any trustless protocol, ironically, is how to build trust amongst the users of the protocol. Many times voters are put in a situation where they are relying on a couple of pages of information to trust someone they have never met with several hundred thousand dollars. This takes an incredible amount of trust, especially when most voters have invested tens or hundreds of thousands, and in some cases millions, of dollars into the protocol.

The Proposed Solution

Every 3 months, the DAO would elect 5 trustees through a Prop House round. When builders make proposals, they would be encouraged to include multiple transactions when feasible that would include upfront payments for startup costs and the remainder that would go into the Trust’s 3/5 multisig.

As the builders moved through their project, they would submit requests for payment to the Trust who would verify the work completed and release the funds accordingly. If there were disputes between builders and the Trust, both parties would submit their arguments into a proposal to get a final decision from the entire DAO.

Using the Trust would not be mandatory for any proposal, but over time, I hope it would be seen as a boost for any proposal since it would offer maximum transparency and reduce risk to the DAO in the building process.

Use Cases

There are probably many use cases for this type of system, but here are a few to get your wheels turning.

Scenario 1: A builder would like to build a Nouns branded consumer goods product for 100 ETH. The builder is newer to the community, so they propose to receive the ETH in 3 transactions.

  • 60 ETH for the cost of design, raw materials, and manufacturing costs up front.
  • 40 ETH to the Trust multisig with a proposal for two transactions to be approved later.
    • 30 ETH upon delivery of the final products.
    • 10 ETH as a builder reward for selling out, proving the demand for the goods and value to the brand.

Scenario 2: A builder proposes working on building a Nouns protocol for the next 6 months. They would like 120 ETH total. They propose two transactions.

  • 20 ETH for the first month of work
  • 100 ETH to the Trust account which will release 20 ETH per month upon review of the work progress and completion.

Scenario 3: A content creation and marketing agency proposes to make a series of videos to promote Nouns. They propose a payment schedule and a bonus based on measurables.

  • 70 ETH up front.
    • 60 ETH to fund the initial costs for the videos.
    • 10 ETH for marketing costs.
  • 80 ETH to the Trust multisig.
    • 30 ETH upon completion of the video series and the marketing launch.
    • 50 ETH to be paid after 90 days based on the numbers of views achieved across all platforms. Payments will calculated with a floor of 500,000 views and max out at 1 million views. For example, if 700,000 views are achieved after 90 days, then a bonus of 20 ETH would be delivered by the Trust, and 30 ETH would be returned to the treasury.

Costs

Each trustee would be elected to a 3 month term and be paid 0.5 ETH per month for their time in service. Judges should not be elected to more than 4 consecutive terms. This should be treated a public service to the community, like a voluntary jury duty.

Total yearly cost to the DAO: 30 ETH

Benefits

Increased opportunities to build trust for builders and less up front risk for the DAO.

  • We have seen from Maty that simply tracking proposals and asking for updates has led to 46 ETH returned to the DAO. I believe that even more value will be returned to the DAO over time through a system like what we’re proposing.

Increased accountability for builders and the DAO

Increased alignment of incentives for payments based on work completed rather than proposals passed.

Increased opportunities for the community at large to participate in governance and oversight.

Conclusion

I’m sure there are other options for how to achieve this in a more trustless and automated way, but I believe that as a DAO we would benefit from more person to person interactions rather than less. This is a fairly simple governance addition that I believe would provide a lot of value to Nouns as the community continues to grow in size and complexity.

Let me know your thoughts!

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So this is instead of naming trusted oversight people per proposal, right?

There’s benefit to choosing per proposal, eg subject expertise.

Maybe we can focus on getting clearer on what we expect such that we’re more comfortable with whomever is chosen per proposal?

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I think this is a good idea so long as the people in it are 100% independent from any proposals they are overseeing.

It at least gives a plausible mechanism for proposals to set objective milestones tied to results and for the dao to enforce them.

It is simple and effective. There also might need to be an Eth cap before spinning up another one in case too much control came under this group. (But that is a problem for a later date)

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Yeah I agree it would be better for there to be subject matter experts per proposal but this is better than what we currently do and what we aim for is what you are saying.

This group can also pull on people in the dao for questions until then.

I’m not thinking this will be a ‘Here’s how we think you’re doing and here’s what you can do better’ type of accountability relationship. It’s more of ‘Did you do what you said you would in the proposal?’. I don’t think it would be good governance to take power for funding decisions out of the hands of Nouners. The Trust would just act as a simple accountability layer to prevent the most egregious offenses and prevent full rugs on funded proposals.

Some of that would require subject matter experts, but I think the Trustees could call on those people if needed. Like ‘Is this actual code that works that they submitted, or did they just copy paste something off github?’ type of stuff.

The Trust could also make the reports they receive public somehow, which would help both the builders (if they were submitting thorough reports) and Nouners. When it would come time for someone to re-up a contract or expand an idea or project, they would have most of the second prop written and the DAO would already have a historical record of exactly what that builder had done along the way.

I’m still thinking it through obviously, but it was far enough along to put it in the wild. :slight_smile:

In your scenario, how would trusted oversight be selected? By the proposer? If so, it would still feel like there was no outside accountability. People making accusations would say things like “That’s a thief who hired another thief to make sure he didn’t steal”.

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An ETH cap for how much could be in a Trust multisig? That would be interesting too. It’s possible that they would be managing hundreds of ETH at a time. Maybe even 1000’s.

The 51% attack on this wallet would become a very real concern. Probably a much higher possibility than through the main DAO, although the trustees would be selected by Nouners, so I guess they would have responsibility for such a situation. Maybe the number of trustees grows with the size of the Trust?

5 trustees minimum with 2 added at each 500 ETH interval or something.

You’re right to point out the group can call on experts for inputs. I wonder how much work this generalist oversight is, vs how much work expert oversight will be.

Perhaps a good way to think through this is by taking a chunk of past proposals of all kinds, and in hindsight think how oversight could have worked?

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