Index 2.0 | Leadership, Governance and Decision Making (Pods, Nest and Index Council)

Author: @Pepperoni_Joe
Reviewers: @Afromac, @lemonadealpha, @Cavalier_Eth, @iluscavia, @anon10525910, @bradwmorris, @seb, @Thomas_Hepner, @catjam, @pujimak_in

Following the extended Leadership Forum on the 10th of November, I wanted to share the slides 81 from the session and the recording 28

If you weren’t able to attend, this is a must watch as it explores a vision for how Index Coop could be structured going forward.

Instead of converting a 40+ slide deck into a forum post, I would encourage comments and feedback here based on a review of the slides and recording.

Given the broad consensus on both the problems and solutions, we are being specific in this post to enable the community to decide on our next steps with clarity.

We’d like to acknowledge that implementing a new leadership structure within a DAO is uncomfortable.

The goal of the proposed Wise Owls and Nests is not to create a hierarchical structure. Rather, it’s to enable more autonomous and decentralized entities to flourish with support from an effective system of emergent and elected stewardship. Great leadership empowers people to do their best work and reach new heights of success - this is what the proposed structure is designed to achieve.

TLDR

• Our governance structure has failed and contributors lack clarity and empowerment to make vital decisions at Index Coop. This means crucial decisions are not being made, are being made too slowly, and/or are being made without input from the proper stakeholders.

• To address these challenges, we introduced three new concepts. At the core of these concepts is the idea of delegated decision making. Pods, Nests and Wise Owls:

• Pods are the foundation of our organization. They are winning teams that have high trust in each other and deliver results in a specific area. They are agile and responsible for the success of a specific area of focus. Pods are flexible, can span across Nest and can vary in size and structure.

• Nests are made up of a network of Pods. Nests fund and support Pods within their broad area. Each Nest has between 3 and 7 elected “Nest Coordinators” who are the most trusted and high context individuals tasked with supporting the success of the Pods within their Nest. Nest could be considered Index Coop sub-DAOs. As Nests fund Pods, new Pods can be created and receive budget via discussion with Coordinator from a relevant Nest(s).

• There is a temptation to try and be highly prescriptive around the remit and responsibilities of the Nest and Pods at this stage. Try and avoid this temptation. Support of this post is a directional commitment to establishing Nest and Pods as organizational units. The discussion on specific roles, responsibilities and structure be further solidified as we embark on launching each of the five Nest.

• Wise Owls are a cross functional group tasked with addressing our most pressing decision-making needs which currently lack a clear owner our route to resolution. We a proposing an experiment to elect a temporary Wise Owls Council, composed of ~7 individuals with a term expiring Feb 28th.

• The IIP process will continue to play an important role in our new structure as it will validate, confirm and approve Wise Owls, Nest Coordinators and Nest proposals and budgets (among other things)

Keep in mind, we are a leading DAO in the space, we are defining how to build contributor-led organizations.

Fig 1. Illustrative example of Index Coop Structure

Fig 2. Nest and Pod illustrative example

Fig 3. Possible Nest and Pod structure

The community felt:

• There is general consensus that the current decision making framework requires immediate transformation

• There is general consensus that the proposed Pod / Nest model will provide a more robust framework for funding and coordination of pods’

• There was a request to clearly define the responsibilities of the Wise Owls before the nomination process begins

• There was discussion on some different alternative election mechanisms for selecting the Wise Owls.

The discussion in this next section will be most valuable if you either attended the session or refreshed yourself on the Slides here 81. And the video recording here 28.

Responsibilities of Wise Owls

Over the last 6 months we have launched two new products with 7 million combined AUM. Currently, the biggest risk to Index Coop is not an abuse of power by our most trusted leaders - it’s not getting things done.

As our autonomy has grown, increasingly we are seeing questions, challenges or situations arise where it is unclear who should make the final decision. This has led to organizational paralysis - with contributors not feeling empowered or able to address our most important challenges.

Wise Owls address this. They are tasked with proposing solutions to big decisions at Index Coop which currently lack a clear owner. Part of the solution is to identify who/what will be responsible for making this decision going forward.

This will enable the Wise Owls to continually address key issues as they arise, and then delegate responsibility to Pods or Nest(s). This is designed to help us avoid a heavy handed approach. Decision-making will begin at the Nest and Pod level, and if it becomes clear that an issue is intractable or system-critical, the Wise Owls will be tasked with the responsibility to develop a solution. To put it another way, the Wise Owls will focus on providing a first response for decisions that lack a clear owner, or which are so complex and cross-functional in nature they cannot be resolved by any other group.

Thus, Wise Owls are the tip of the spear ensuring Index Coop can rapidly respond to new situations as they arise. This will also be empowered to be Index Coops representatives to larger external stakeholders. This will create a new balance of power where Index Coop has equal voice at the table to Set and DFP.

Given that Wise Owls will only be in position until 28th of February, some example of decisions/activity the Wise Owls will make in the near term include, but are not limited to:

• Prioritisation of positions for FT hiring
• Provided Q1 priorities to guide the creation of Nest
• Determine funding for each Nest
• Meeting bi-weekly with Set Labs
• Determining the final Compensation & Community Allocation structure proposed through IIP

We think it is important to be careful to not look to create an exhaustive list of responsibilities for the Wise Owls now. The more enumerated the list, the harder it becomes for the Wise Owls to be truly successful. Moreover, we will likely get bogged down arguing about fringe cases - when there is a clear, undebatable need for Wise Owls to immediately address some of our most important and complex decision making challenges.

Wise Owls response to decisions might look something like this:

Replacing Wise Owls

By giving the Wise Owls a clear mandate to act when decision-making on an issue exceeds the capacity of any one Pod or Nest, we can ensure the most pressing and challenging questions will be addressed head on. However, it is important the community and token holders can ensure the Wise Owls are kept accountable.

If you are worried about instilling a group which has dictoriarial power, it is important to make it clear Wise Owls can have specific responsibilities removed, or be disbanded entirely, if:

• A community poll calling for this action get +55% support, quorum 25 votes, poll open to Trust Level 1 OR
• An IIP calling for this action gets over +55% support, quorum 7.5% of circulating supply

This challenge can be called by ANY community member. Thus, Wise Owls will always be held to account.

Election mechanism

The election mechanism for Wise Owls prompted some discussion. At this point, it is important to flag that no voting mechanism is perfect, that there will likely be dissatisfied people whichever system we choose. Thus, we must be able to disagree and commit.

We proposed a similar framework for the nomination and election of Wise Owls to one we have had success with in the past (Funding Council adding 1 new member 2, Formation of the Autonomy Kick Off Group 2)

Term length

• Wise Owls will be formally in place until the 28th Feb
• After this point, the community can decide what should happen next (i.e. continue, refresh, disband). The assumption is Wise Owl will not continue to operate unless there is a clear desire for them to do so expressed by the community.

How many positions?

• 5 “General” Wise Owls from across People Nest, Finance Nest, Growth Nest and Governance Nest
• 2 “Product” Wise Owls from T.Nest
• This guarantees that we have the essential technical representation within the Wise Owls
• A logical question given this approach may be “if Technical Nest has two guaranteed spots, why not also provide a fixed number of spots to representatives from other Nests?”
• We feel the success of the Wise Owls is best ensured if the group is composed of the most trusted and respected members of our community. This is best ensured by having a large number of positions open to a broader range of contributors. It also reduces the instances of Wise Owls being “shoehorned in” simply by virtue of them being from a smaller Nest (i.e. Governance vs Growth).

What voting system will we use?

• We will use ranking order voting via choicevote 18.
• Bronze, Silver and Gold Owls are all eligible to participate. Silver Owls will get 2x vote weighting and Gold Owls will get a 4x vote weighting

This provides the following relative vote by voting group:

Alternative systems

It is important to remember there is no perfect election system. As such, we are keen to not get too bogged in an endless debate on the specifics of our nomination and election process. We believe the approach proposed above provides a simple method for standing up a fair, representative Wise Owls group which has broad community support.

During the call, some other alternative election mechanisms were proposed. To fairly assess them individually, more specific details would need to be provided. Some initial feedback on each has been provided below:

• Social token / NFT based voting
  • This idea offers some really intriguing opportunities, and I would definitely support further research into it. However, setting up robust NFT based voting framework is a 6 month+ project - and there is a need for the Wise Owls now
• Voting weights based on total contribution
  • The thinking behind this is interesting, as it looks to allocate more votes to highest context contributors as judged by historic reward
  • Using the data we have collected as part of the Comp work, we can see this has many practical issues. For example, Lemonade and myself would have comparable total votes to…
  • Cav (Product WGL), Pujimak (APAC WGL), Mel (Governance Ops WGL), Praifi (F.Nest contributor), Allan (FLI) and Ed (Engineering WGL) combined.

Electing Wise Owls in the way proposed does not mean alternative systems should not be explored and used. One of our “Decision Making Truth” is “we iterate, we experiment, we improve”. We fully expect the method of nomination for Wise Owls and Nest to evolve over time. There remit itself will also evolve, as Wise Owls will progressively work through challenging decisions that arise and propose a clear decision-maker going forward.

To support this evolution we propose the formation of a “Elections and Governance Pod” which will sit within the Governance Nest. This group will work to further research alternative election and nomination processes so future nomination processes for the Wise Owls and Nest Coordinators can be conducted in the best way possible. @mel.eth , @Lavi , @sixtykeys @LemonadeAlpha , @Abel, @MrMadila it would be AWESOME to have your thinking to drive this conversation forward.

Timeline

If this proposal receives support, we look to ideally progress Wise Owls and Nest against the following timeline.

Wise Owls timeline

These timelines are aggressive, and can be delayed if further community discussion on a topic is needed. For example, if the community would prefer to explore other election mechanisms in more depth, this would significantly push back the timeline outlined here.

• Commitment to Wise Owls confirmed and Wise Owls nomination process opens - 22nd Nov
• Wise Owls elections - 24th Nov to 29th Nov
• Wise Owls confirmed - 30th Nov
• Prioritized list of roles for FT hiring shared with the community - 3rd Dec

Nests / Pods

When looking to implement the Nest and Pods we will (as ever) be flexible and iterative.

Nest will likely move at different paces as contributors in the area come together with the Change team to figure out what the Pod and Nest structure looks like.

• Community to commit to Nest / Pod confirmed - 22nd Nov
• Ongoing support and guidance provided to WGs to prepare them to transition to the Nest model - Now to Dec 20th
• Mechanism for electing Nest Coordinators confirmed - 6th Dec
• Nest Coordinators nominated and confirmed - Dec 13th to Dec 20th
• Nest Proposal shared with F.Nest - 7th Jan
• Nest proposal shared with Community - 14th Jan
• Nest proposal confirmed via IIP -26th Jan

Temperature Check

Noting a “Yes” indicates a directional commitment to the proposals outlined here.

Since sharing this proposal for internal review, there has been much discussion on further expanding the hard power of Wise Owls. If you have a strong opinion on the further powers the Wise Owls should have, please provide details and a rationale in the comments below, alongside a poll to gauge community sentiment on the topic. These can then be included in this proposal.

Index Coop is considered the gold standard for DAOs. If we can succeed here, we will lay the blueprint for what an internet organization can be. Our community is ready for change, and if we can embrace it with both hands, we will guarantee Index Coop’s success in the years to come.