DAOs, Collar, and the Future of DeFi
In the future, you’ll be me.
The more DeFi grows, the more its principles are tested. DeFi is decentralized financial services that are open, permissionless, accessible, censorship-resistant, and governed by (and for the benefit of!) its users.
Currently, in Summer 2021, these principles are being tested on all sides. U.S. regulators are moving in on the space, forcing protocols with U.S. ties to make controversial changes out of self-preservation. VCs are aggressively spinning the narrative that the direction of a protocol shouldn’t be left to a DAO and that the VC voice is more important than the collective voice. The controversial actions of the DAOs of some of the largest protocols have many concerned. Accusations of conflicts of interest among teams, investors, influencers, and others in power abound (as always).
But the tone of discussion with all of these issues circling in the background is not one of despair. DeFi community members are enthusiastically proposing and debating new solutions to these problems, solutions that they hope will direct protocols down a path where these kinds of attacks are no longer a threat to the principles of DeFi. This is the vision that most in the community share: they do not cling to outdated models that give them their power, but rather are ready to embrace ideas that bring us all closer to this shared goal — that’s what makes us different from those in traditional finance. We will soon see new DAO models emerge, new approaches to anonymity, and new paradigms for protocol launching and development. Us on the Collar team believe that great solutions are just on the horizon, and that’s why we’re fully committed to being a community-led protocol.
The Collar protocol is a financial tool that can only sustainably survive and grow if the community has full ownership over it and it takes its lead from those in the community who have the best ideas. Here are the steps the Collar team is taking to build a foundation for our protocol that ensures this happens:
- The Collar core protocol will launch this year with ownership of the protocol going to several of its trusted team members via a multi-sig, but we will transfer complete ownership of the protocol to the community and abandon using multi-sig as soon as it is feasible. The initial multi-sig period is so we can ensure the protocol is secure during its launch and also safely implement the first crucial Collar Improvement Proposals while the Collar community is small and growing. No admin keys and no multi-sigs will remain as part of the protocol passed our initial launch period.
- The structure of the Collar DAO will be decided by its community. While we may launch with an initial 1 token, 1 vote model, we will ensure procedures are in place to enable the transition of the DAO to a different model if/when the community decides a better model has emerged.
- We will work to support openness for front-ends built for the Collar smart contracts. The Collar team is international, fully anonymous, and cannot be compelled by regulators to censor the front-end for our protocol. However, we want to go a step further and not just require you to take our word for that, but instead make it a non-issue by supporting the development of front-ends to Collar that are not controlled by us. This is the only way that a protocol can truly become censorship resistant.
- We do not believe in strong-arming the community to accept proposals. Common tactics used by a team behind a protocol to ensure a proposal that THEY value passes are to: censor forums and discussion surrounding the proposal, ensure that the proposal benefits themselves disproportionately over the community via backroom dealings, and leverage their status as the controllers of the web/social media for the protocol to shape the narrative. The Collar team will always refuse to control/moderate forums and discussion regarding the direction of the protocol, will relinquish control of initiating major proposals as our members move on to other projects, and will hand over control of its web/social media presence to its community (probably by letting the existing channels, such as this Medium account, slowly die as alternatives rise…that’s why I hope that, in the future, one of you will be me).
Collar is sanctuary for your stablecoins.