KIP-19: Internal Governance Model

Summary:

Formalize the roles, responsibilities and delegated decision authorities of DAO contributors to improve our ability to execute on KlimaDAO’s product and platform strategy, with appropriate transparency and accountability mechanisms.

Establish a working group to research and develop a decentralization roadmap for the DAO.

Motivation:

The broader organization of individuals involved in contributing to KlimaDAO’s development (the “DAO”) started on October 13, 2021. At this time, community members looking to get involved were invited to join the Contributor Discord server and to find ways of adding value. This self-guided approach led to a large number of contributors joining the DAO in a very short timeframe, and eventually, a functionally-oriented structure organically emerged with individuals assuming different roles and responsibilities across the DAO.

In the months that followed, the DAO began experiencing growing pains as a result of its informal ways of working, particularly in regards to how work gets done, and how decisions get made within the context of a fully-remote and distributed team. These issues were primarily driven by the difficulty in coordinating a large number of contributors without the processes and systems in place to support them, and the lack of an internally agreed upon framework for how the DAO should make decisions and act to balance the competing needs of quality, transparency, risk, decentralization and speed.

Over the same time-period, however, the market opportunity and strategic goals for KlimaDAO have become increasingly clear. The goal for KlimaDAO is to create an asset-based reserve currency to accelerate the growth of ReFi and to provide transparent and frictionless access to the carbon market; the goal of the Klima Infinity Product is to improve accessibility and create value for various ecosystem participants through SaaS-style distribution and world-class product experiences that drive funding to climate action.

Like any early-stage venture, the ability for KlimaDAO to move fast and execute with a high-degree of excellence is paramount. However, there is often a tradeoff between making a decision quickly versus making a decision that the majority of people agree to. As an early stage Web3 venture, KlimaDAO needs to balance this tradeoff as it finds its way to product-market fit.

NOTE: a description of our Product and Platform strategy can be found here: https://docs.google.com/document/d/1HQZJPfi2g7xaHqiLolHOXqVtLDzwMobWHyzZRH6H0bg/edit?usp=sharing

Roles, Responsibilities and Delegated Decision Authorities:

The roles outlined below clarify and formalize the existing practices within the DAO that have been in place since launch.

Core Team:

• Responsible for executing on KlimaDAO’s strategic vision, and interfacing with external participants (e.g. governments, standards bodies, etc.) to develop and expand the ReFi ecosystem, enabling KlimaDAO’s long-term success.
• Delegated decision authority includes recruitment and removal of contributors and functional stewards, approving operational budgets, approving operating model changes, approving compensation structures, and setting legal strategy.

NOTE: at the time of writing, some Core members also happen to be Functional Stewards. For a detailed breakdown of Core Team roles and responsibilities, process for onboarding and relieving members of the Core Team, and a description of how they are remunerated, please see this document: https://docs.google.com/document/d/1LKF65VATQROjradXlnUTwcID8ZOhRo-Qwte73NB6Nq0/edit

Functional Stewards:

• Responsible for interfacing with the Core Team to translate strategic vision into actionable projects and work streams; and working with internal and external contributors to execute projects and work streams against proposed budgets, timelines and quality expectations.
• Delegated decision authority includes defining roles and responsibilities of contributors within their functional team, proposing new internal and external contributors (i.e. recruitment), and proposing operational budgets for their team, as well as cross-functional projects they own.

Policy Team:

• Responsible for economic modeling and formulating monetary policy for the KlimaDAO Platform.
• Delegated decision authority includes putting forward KIPs related to treasury monetary policy (e.g. enabling bonds for new assets, allocating treasury funds, adjusting policy parameters such as reward rate), determining minor reward rate adjustments if realized rewards vary significantly from KIP-specified targets, vetting new carbon assets for inclusion in the retirement aggregator, and adjusting bond capacities.

NOTE: some of these powers have been formally delegated to the Policy team in previous KIPs.

Transparency & Accountability:

In delegating decision rights to members of the DAO, we recognize the importance of transparency in maintaining trust. As such, DAO contributors will continue to provide regular updates and progress reports via office hours and Discord; where appropriate, quantitative indicators for performance will be made available to drive accountability and continuous improvement of the DAO (such as the weekly treasury performance updates we publish in the #metrics Discord channel).

Beyond that, there are a number of “quick win” opportunities we will implement in the near term to increase transparency and accountability for contributors at all levels:

• Create a mechanism for contributors to share feedback about other contributors
• Institute a process for the community to suggest the removal of a Core Team member or Functional Steward in the extreme event that they are not performing their duties or are abusing their power
• Provide a quarterly community update to share information on core workstreams and in-flight projects across the DAO
• Document how Contributors are compensated and publish monthly departmental budgets and contribution sheets (without exposing anyone to risk of personal identification)
• Create a formal process for anyone to provide feedback or suggest changes or improvements to the KlimaDAO protocol or product
• Publish a DAO wallet runway analysis

Decentralization Roadmap:

While this proposal optimizes the DAO for our short-medium term needs, we also propose that an internal working group be established, tasked with developing a recommended decentralization strategy and roadmap over the medium and long-term. The deliverable of this working group will be a report and set of recommendations, but subsequent KIPs will still be required to implement any proposed changes as and when required.

This working group will be composed of Core Team members, Functional Stewards, Policy Team, Contributors, as well as select community members with demonstrated expertise in decentralized governance. The working group participants and objectives will be established in Q2 2022 within the DAO Contributor Server.

Proposal:

• Formalize the roles, responsibilities and delegated decision authorities of DAO contributors to improve our ability to execute on KlimaDAO’s product and platform strategy.
• Implement appropriate accountability and transparency mechanisms.
• Create a working group to research and develop a decentralization strategy appropriate for KlimaDAO.

Scope:

Powers not explicitly delegated (for example: adding new bonds) remain subject to a KIP vote.

The full forum post with community discussion can be found via the "Discussion" link below.