The Next Stage of DAO Verticals

Since August there have been a number of changes and a number of great evolving conversations around community governance and community accountability.

With the impending Guilds Grant Program announcement and changes to the Community payout process, it’s time to re-examine the role and purpose of DAO Verticals.

Throughout November & December, the Community Team and NEAR Foundation on the whole have been considering how to protect our community members and how to not leave our payout processes open to vulnerabilities from a liability and legality perspective. Globally, cryptocurrency is an emerging topic of conversation for regulators* and we want to be sure to inform and empower our community members to the best of our ability on how we can all be proactively considering the effects regulation could have on our systems and processes.

As such, stay tuned for an upcoming post that will go into more detail on this new payout process that will be effective starting in January/February (TBC) for all Guilds, community projects, etc in the Community and has been designed to be proactive in the face of impending regulation.

This has prompted us to ask: how would the DAO verticals fit in this emerging revised structure?

When a fully community-run DAO entity is made entirely responsible for voting on and distributing funds throughout the community, such as the @creativesdao-council, they are fully liable for who those funds are sent to and ultimately whether or not that is done so legally. This is a huge amount of responsibility for these community leaders, and they should be protected accordingly.

Therefore, we are proposing the following:

  • In order to limit the liability for DAO vertical council members so they are not responsible for all of the funding of all of the Guilds and DAOs in their respective vertical, funding will be distributed to the individual Guilds and DAOs via the NEAR Foundation and the new payout process that will require verification from the individual recipients. The NEAR Community and FLO Teams will take on the responsibility and administration for the verification on the DAO vertical councils’ behalf.

  • This does not mean that the authority of the DAO verticals is being curtailed - these councils will still be approving funding proposals on the Forum, and voting on their Astro DAOs as to what/who qualifies for funding and how much is appropriate to be allocated to the group in question as outlined in their respective funding guides.

  • The new Guilds Grant Program will then serve as a framework to further support what the DAO verticals have already been working toward in terms of funding qualifications. We look forward to the DAO vertical councils’ feedback on this program announcement next week, along with the rest of the Community.

But, you may ask, if you’re centralizing who is distributing funding back to NEAR Foundation, how is that furthering NF’s ultimate goal to decentralize?

For those who have been in the NEAR Ecosystem for awhile, you know that the DAO Verticals currently receive their funding from the Community Squad DAO (on SputnikDAO v1) previously, now the Ecosystem Development DAO (on Astro DAO) which has been operating as an arm of the Community Fund. By moving to a system where this middle layer is removed and Community leaders are receiving funding directly from the Community Fund, as much as this seems like a step backwards, it’s actually a step forward as the funding allocation is decided by community representatives (on the DAO Vertical council) and the community is then receiving the funds directly from ‘the source.’ This makes funding decision-making and access more direct to the community than ever before. We recognize it’s not perfect but given the current liability and legal constraints we believe it’s a strong solution on the ever-winding path to decentralization!

We continue to hope to move toward systems where the community has more direct, actionable say on how funding is spent in the Community, which is why we are also proposing a new structure for the DAO Verticals that includes expanding the number of council positions, shortening the duration of these positions, and consistently rewarding these positions.

In summary:

DAO Verticals would still vote on how funds will be allocated, but will not be disseminating funds themselves in order to limit the liability for council members for how all Guilds and DAOs in their vertical are being funded.

Comments, questions, concerns? Sound them off below and we’ll work to address them as a Community!

*Citation: Cryptocurrency Regulations Around the World


While I’m not legal person, I do understand why the DAO verticals funding mechanism is being changed back to the NEAR Foundation (thanks for the explicit explanation, @mecsbecs).

I do have a few concerns which I would highlight below:

What verification would be required to be completed by individual recipients? KYC? and will this verification be extended to Guilds and DAOs that submit payout requests too?

  1. When crypto regulations becomes clearer, does the NF still plan to move funding back to DAO verticals?

Well, there’s not much to say here. It’s a good thing that DAOs will soon be run exclusively by the community: Community-driven DAOs: Proposed Structure for Community Fund DAOs as of Jan 2022


Hi @simeon4real - thank you for your concerns!

The new payout process, which will include identity verification, will be posted soon, so as mentioned, stay tuned for those details. Individuals and representatives of Guilds and DAOs will be required to follow this process if they are looking to receive payouts.

DAOs were always meant to be run exclusively by the community - we’re still on our way to full-scale decentralization! The DAO Vertical model continues to be one I think has been effective and can continue to be as it evolves. We just need to modify the approach a bit to ensure everyone is protected from liability that comes with funding.

With more regulatory clarity - or alternative solutions where the DAO Verticals become association entities in Switzerland, for example - it is an option for them to become funding vehicles once more. We’ll have to see going into the new year what creative options we can come up with that offer legal protection, community empowerment, and compliance for all based on everyone’s respective jurisdiction. It will definitely be an evolving conversation.


And, as promised, the new payout process has been delivered:

Thank you in advance for your help in getting this out to all of our Guild leaders @simeon4real along with the rest of the Guild Ops Team!