Accountability

💡 How do we hold all users accountable?

Defining Accountability

Running in parallel with participation, the DAO needs to manage the contributions of its members and promote accountability among participants. Accountability starts with clearly defined guidance and standards around what is expected and then upheld by enforcing those standards.

The typical form of accountability comes through hierarchy. A boss makes sure employees are working or fires them. Parents and teachers make sure school work is done or punish them. Governments make sure taxes are paid or they arrest you. Most accountability is built upon coercion but a DAO has limited ability to coerce. This is feature, not a bug. But it means that we need to think carefully about how we assure that the DAO is not getting ripped off by those who would exploit this lack of coercive power.

YAM holders have one main tool to enforce accountability and that is control over the treasury and ability to withhold payment if promises are not kept. This is a powerful tool, but it is only effective if it can be used credibly and transparently. This is where clear standards and expectations are important. Vague promises are easy to wriggle out of, poorly defined specifications lead to incorrect expectation and subpar products. In order to enforce accountability, all parties must be aligned around what is being paid for and what they are getting.

Accountability through Contracts

The most straight forward mechanism to assure accountability is a contract. A contract is an agreement between 2 or more parties. In most cases, contracts are typically enforced by a legal system, but some are based on reputation or other, more informal means. Smart Contracts are a contract where the contents of the contract (the code) is run and enforced by the entity on which it is run (i.e. Ethereum). Smart contracts are constrained by the fact that they must run code and require specific inputs to determine whether an agreement is met. They work very well for deterministic agreements, but not for more fluid subjective ones.

Most contracts have an element of subjectivity to them that may require interpretation to determine whether the contract was carried out acceptably. Smart contracts cannot provide this kind of interpretation. And because a DAO does not fall under any legal jurisdiction, and the contributors may come from disparate parts of the world and jurisdictions, there is no default framework for who would adjudicate disputes.

This increases the trust requirements required by both parties when setting up new contracts, but designed correctly, these contracts can still guarantee accountability to the DAO. The key to this working is via short term agreements with limited scope and deliverables that can be renewed upon completion of prior milestones. Contributors become directly accountable to token holders. Both the DAO and the contributor hold limited risk as the contract is for a short duration and failure to honor the contract only impacts that duration.

Honoring these contracts, or having good reason for why they were broken, will be of utmost importance to the DAO as it relies on its reputation to pay in order to attract contributors to work on projects. This adds significant responsibility to the DAO token holders and adds a tangible use case for the token. DAO token holders are held accountable by each other, and ultimately by the market. If token holders fail to act responsibly, either by failing to vet bad proposals or by failing to pay contributors after agreeing to do so, they put the treasury at risk and will have a hard time attracting both new contributors and new investors.

Building a framework for accountability

The Yam Re-Org’s main goal is to design and implement a system that the DAO can leverage to create and manage contracts for accountability. This will encompass the processes to apply for funding and create a contract, the responsibility of token holders to vet the contracts, the responsibilities of contributors to document their work and create adequate documentation, as well as other parts of the system needed to operate effectively.