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RareDAO is bringing its organizational graph onchain, including its Foundation, Council, Ops Team & Grants Committee, to increase the security of its multisigs and streamline council transitions
RareDAO, the governing body of Rare Protocol and SuperRare.com (one of the earliest and most reputable NFT marketplaces), is seeking to increase operational efficiency while keeping the DAO’s governance system legible and resilient to capture. To help execute on this vision, RareDAO turned to Hats Protocol to bring its roles onchain, giving the DAO the ability to delegate powers to individuals and committees in a revocable way.
Of particular note, RareDAO is powering its Grants Committee with Hats to streamline the process of granting and transferring multisig signing authority from one set of committee members to another with each election, saving time and increasing organizational transparency as a result.
“Implementing Hats creates functional, not just implied, relationships between each of the groups within the foundation… this means that we can more easily create agreement between the legalware (how something works on paper), the socialware (how it works as a social / political reality), and the trustware (how it works at a smart contract level)” - Brennan Mulligan, DAO Program Manager at SuperRare
Progressive decentralization is at the core of the RareDAO vision. Collectively governed by $RARE token holders, the DAO is in charge of allocating funds from the community treasury and effectuating proposals passed through the community governance, as well as overseeing key platform parameters.
The DAO is governed by an elected council, currently a 4-of-7 multisig wallet, which controls the community treasury, upgrade authority on Rare Protocol’s smart contracts, and is responsible for manifesting the DAO’s decisions. To serve the needs of the DAO, the Council has delegated some of its powers to a handful of roles, divided into three main sub-groups: DAO Ops, Foundation Roles and a Grants Committee.
RareDAO is bringing its organizational graph onchain to create committees with accountability and increase the efficiency of council transitions. See their Hats tree here
Delegating power to specific individuals and committees is a critical step towards realizing the DAO’s goals and continuing its process of decentralization. However, it has also introduced complex challenges related to oversight and accountability as, at the time, “the council wielded no actual power over the grants committee, DAO Ops Stewards, or operating expense multisig at a smart contract level other than the ability to deny top ups, even though it is supposed to have full power to modify rosters,” said Brennan Mulligan, DAO Program Manager at SuperRare.
The DAO Council needed a way to be able to delegate specific powers, including multisig signing authority, to individuals and groups, while retaining the ultimate authority to hold contributors accountable and revoke or transfer those powers in the future.
By bringing its roles onchain with Hats, RareDAO provides contributors with the context and powers needed to make decisions and take actions, while keeping them accountable to the DAO as a whole.
One specific example is the Grants Committee, responsible for administering the DAO’s grants program. Its operations include allocating funds approved by community proposals, as well as periodically making proposals for the community.
Using Hats, RareDAO is able to grant individuals with signing authority on the Committee's Safe multisig, providing Committee members with the permissions and authorities needed to fulfill their role. Grants Committee Members are transparently accounted for onchain as the wearers of the Grants Committee Member hats.
RareDAO keeps Grants Committee members accountable by maintaining the ultimate authority to revoke their hats, and correspondingly their multisig signing authority, if ever needed. When it comes time to transition committee members, RareDAO can now simply transfer the Grants Committee Member hats from one set of addresses to another, rather than executing a complex and time-consuming series of multisig transactions, which has been a source of frustration in the past.
“Power is now associated with a role, not a specific address or individual. This derisks the system as a whole by allowing us to hotswap people in and out of roles without changing the underlying power structures.” - Brennan Mulligan, DAO Program Manager at SuperRare
As RareDAO embarks on the path of progressive decentralization, Hats will empower the DAO by giving it the means to delegate power to members and hold them accountable, all without compromising efficiency or regulatory compliance. And better yet, this power structure is not set in stone. New roles can be created, others can be deactivated, and more nuanced functionality can be added as the organization matures, with all of these changes being controllable by the DAO itself.
As a next step, RareDAO may seek to use Hats to help manage its council elections using the Hats Election Eligibility Module, thereby removing the need for a trusted intermediary to grant and transfer Council Member hats, and the permissions they come with, to the right address. With a Hats Election Eligibility Module, only the winners of the election would be eligible to wear the Council Member hats and claim signing authority on the appropriate multisigs. Those hats would then be automatically deactivated at the end of the election term, immediately disabling multisig signing authority with it and ensuring that there is no lame-duck period for multisig signers.