Original Document
Supporting Document #1
Supporting Document #2
**Team Members **
This project is proposed by two of the most experienced experts in the governance technology space: John Richardson and Mathew Markman.
John Richardson is dedicated to advancing participatory democracy through digital technology. He is the founder and CTO of Ethelo, which has been recognized multiple times as the world’s leading digital democracy platform. John’s career focus is systemic social impact; in 2001, he founded Pivot Legal Society, which conducts strategic litigation on behalf of marginalized communities. Under his leadership, Pivot became one of Canada’s foremost human rights organizations. John’s innovative work in collaborative decision-making has been acknowledged with an Ashoka Fellowship for Social Entrepreneurs.
Mathew Markman is CEO of Ethelo and has over five years of experience in the DAO ecosystem, leading governance design and facilitation for several influential DAOs. He co-created and directed Big Green DAO alongside Kimbal Musk, aiming to revolutionize philanthropic funding through decentralized models. Mathew also founded the Decentraland DAO Facilitation Team, developing a structured governance process for one of the largest metaverse platforms on the Ethereum blockchain. Prior to his work in web3, he served as Deputy Director of Programs and Director of Research for Proximity International, overseeing governance, security and justice projects in conflict zones such as Syria and Iraq. His academic pursuits include being a Futures Studies PhD Candidate and Lecturer at the University of Hawai’i at Manoa, focusing on decentralized and democratic futures.
Together, John and Mathew bring an unparalleled combination of practical and theoretical expertise in governance design and the application of technology to achieve effective governance outcomes. In 2022, John, Mathew and Kevin Owaki spoke together on a governance design panel at the Big Green DAO annual Summit.
Executive Summary
DAO Governance and funding mechanisms are often hindered by low participation, governance fatigue, and last-minute uninformed voting. This leads to voting power centralization, disruptive late-stage engagement, and difficulty in ensuring high-quality funding decisions.
This proposal presents **Polity’s vision for integrating a ‘Cooperative Democracy’ governance model **into Allo.Capital DAO, designed to maximize meaningful participation, prevent governance fatigue, and ensure long-term governance sustainability.
In this proposal, we aim to preemptively address two primary DAO pain points:
- Low Participation: DAO governance participation is often concentrated in a small subset of active members, while the broader community remains disengaged.
● Solution: Implement ongoing decision-making panels, pre-vote deliberation engagements, and participation incentives to encourage sustained participation across governance cycles, rather than one-time voting bursts.
- Counterproductive, Late-Stage Participation: When wider community participation does occur, members often engage only at the final voting stage, rather than in early deliberation, leading to **disruptive dissent **that derails well-developed proposals and processes.
● Solution: Front-loading engagement, requiring structured deliberation before final votes, and **incentivizing participation in early funding and proposal development phases. **
Cooperative Democracy: Governance as a Process, Not Just a Vote
**Cooperative Democracy **is an emerging governance framework developed by Polity Collective—a **cooperatively owned and operated digital democracy company **built upon the Ethelo technology. Polity’s mission is to rebuild trust in democracy, pioneering **new models of participatory self-governance **through structured deliberation, data-driven decision-making, and community management infrastructure..
Polity leverages **Ethelo’s award-winning digital democracy software **which has been used to engage **250K+ stakeholders **across **150+ cities **and 400+ organizations—including multiple DAOs and web3 protocols. Now, we seek to bring these capabilities to **Allo.Capital DAO **to ensure high-quality governance and funding outcomes.
How Cooperative Democracy Works
● **Decision-making Panels & Pre-Vote Deliberation **– Ongoing panels of community members to provide proposal development support, and structured pre-vote deliberations ensuring funding rounds & proposals are refined before formal voting occurs.
● **Participation-Weighted Influence **– Adaptive governance & funding influence (voting power), increasing for contributors who engage early in the proposal development process, participating in ongoing panels and structured deliberations.
● **Liquid Democracy with Trust-Based Delegation **– Using Gitcoin Passport & open source observer data to monitor participation and delegate governance power based on engagement history.
● **Community Pulse & Conviction Voting **– A quarterly process that dynamically tracks evolving strategic priorities using Ethelo’s structured engagement tool, used to align governance proposals and funding decisions to community members and other stakeholder interests.
● **AI-Assisted Governance Coordination **– Use of AI tools to summarize proposals, community sentiment, comments and discussions, enabling community members to more effectively and efficiently join ongoing deliberations and make informed governance contributions.
All of these strategies are supported by the Ethelo group decision technology, which is optimized for complex financial and strategic decision making and has been used by hundreds of organizations to grant and budget more than $10B.
Why This Model is Ideal for Allo.Capital DAO
Allo.Capital DAO seeks a **funding and governance mechanism **that directs resources **to the best builders **while increasing protocol adoption. Our approach ensures:
● **Sustained community engagement **through providing pathways and incentives for ongoing community participation in the decision-making process, before formal voting occurs. ● **Efficient, structured deliberation **that enables people to participate in structured small group conversations aimed at vetting ideas, double-checking assumptions and building relationships and consensus.
Governance deliberation typically occurs across various forums, making it difficult to reach consensus and create actionable insights. By utilizing Ethelo’s engagement platform or API, structured discussions are streamlined into a single interface that captures both qualitative and quantitative data, and uses complex scenario- and multi-criteria decision analysis to depict consensus solutions. These solutions are not always those with the strongest support, but rather, those that the most amount of people can agree with and accept.
● **Data-driven reputation models **that garner data from Gitcoin Passport & open source observation of on-chain metrics. The combination of participation incentives and reputation models creates a dynamic voting influence system that measures a stakeholder’s specific contribution to the Allo ecosystem, and broader position within the blockchain community.
● **A culture of participation **that prioritizes impactful, timely engagement in the decision-making process, over ratification-centric governance. Using Ethelo’s structured engagement tools, presenting collected data in a transparent and informative way and designing an incentive and reward system that encourages engagement in these decision-making processes, transforms the experience of governance, increasing the significance and meaning of being a DAO contributor.
This model **builds on Ethelo’s 12 year experience **working with local municipalities and federal agencies in Canada, and has been successfully adapted for Web3 governance, with deployments in:
● **Big Green DAO: **Quadratic-informed funding mechanism utilized by over 100 Food Justice and Security non-profit organizations.
● Decentraland DAO: Quarterly Community Pulse engagements for continuous governance monitoring and sentiment analysis.
● Arbitrum DAO: Structured deliberation to determine strategic priorities and develop an aligned grantmaking framework.
● Future DAO: **Development of a secure API enabling direct integration of Ethelo’s engine and decision-making capabilities into blockchain native apps and protocols.
Recently, Polity Co-Op has taken on responsibility for continuing Ethelo’s mission, and bringing this technology to scale. By integrating these proven governance solutions into Allo.Capital DAO, we seek to support the evolution of a transparent, inclusive, and adaptive governance system that grows alongside the network’s ecosystem.
**Governance Model: Structured Participation **
Effective governance is not just about voting but about structured participation, deliberation, and reputation-based influence. Traditional DAO governance models suffer from:
Core Governance Methods
- Decision-making Panels & Pre-Vote Deliberation
Rather than waiting for the final vote to engage stakeholders, this model incentivizes deliberation and structured input before proposals and funding rounds reach the decision stage. This is implemented through:
● Decision-making Panels: Domain-specific groups that provide structured input into funding and governance proposals before they are finalized, leveraging Ethelo’s existing deliberation tools and Polity’s in-development group coordination framework.
● Pre-Vote Deliberation: Open engagement periods where members can refine proposals, raise objections, and ensure alignment with the DAO’s strategic vision, facilitated by Ethelo’s structured engagement platform or integrated API.
- Participation-Weighted Voting Power
Instead of governance being purely token-based, voting influence is partially weighted based on meaningful participation throughout each process and cumulatively over time:
● Reputation-Weighted Governance: Contributions to discussions, proposal development, and standing panels enhance voting power.
● Quadratic Influence Adjustments: To ensure fair and representative governance, different models of quadratic voting may be applied, balancing token holdings and reputation models with participation-based weighting. These models mitigate plutocracy by amplifying the impact of smaller stakeholders while ensuring engaged contributors have meaningful influence.
● Early Engagement Bonus: Users who participate in on-going panels and pre-vote deliberation receive increased influence when proposals reach final voting.
- Liquid Democracy & Trust-Based Delegation
To reduce governance fatigue while ensuring merit-driven decision-making, liquid democracy mechanisms allow stakeholders to delegate governance power based on trust and expertise:
● Gitcoin Passport & Open Source Observer Data Integration: Trust scores developed from analysis of on-chain data will be used to inform governance delegation, ensuring Sybil-resistant decision-making.
● Dynamic Delegation Models: Reputation and engagement history determine who can receive delegated votes.
● Reputation Decay & Renewal: Non-participation over time leads to reduced influence, encouraging ongoing engagement.
- Community Pulse & Conviction Voting
To ensure that governance decisions remain aligned with community sentiment, this model incorporates:
● Quarterly Community Pulse Engagements**: Using Ethelo’s structured engagement tools, members can reassess funding priorities and adjust DAO objectives dynamically. ● Conviction Voting Mechanisms: Instead of one-time decisions, funding priorities are continuously reassessed based on evolving sentiment and engagement between quarterly assessments.
● Real-Time Feedback Loops**: Advanced and AI-assisted governance dashboards provide continuous updates on decision impacts and sentiment shifts. This mechanism of data visualization contributes to transformation of the governance experience, creating the feeling of community member inclusion and representation in decision-making.
Applying this governance framework to Allo.Capital DAO will ensure that Allo’s funding and decision-making mechanisms remain:
● Transparent*– Decisions are backed by structured deliberation and reputation-weighted influence.
● Inclusive – Participation incentives ensure diverse engagement beyond token holders.
● Adaptive – Community Pulse and Conviction Voting ensure governance aligns with evolving priorities.
● Iterative – Creating a culture of participation drives engagement across the Allo ecosystem, leveraging governance as a mechanism to onboard users and increase use of Allo network tooling.
Technical Feasibility
Because many of the open-source tools utilized in this framework have already been developed, initial implementation can be achieved with relatively low friction. This section outlines how existing tools, such as Ethelo’s structured decision-making platform and API, Polity’s governance infrastructure, and Gitcoin’s identity verification systems, will be leveraged to ensure seamless implementation.
1. Ethelo Governance API & Structured Decision-Making Tools
Ethelo’s participatory decision-making platform has been successfully deployed across municipal and Web3 governance environments, ensuring structured deliberation, networked decision-making, and pre-vote engagement. Out of the box solutions are available for (but not limited to):
● Strategic Priority Assessment
● Grantmaking and Grant Evaluation
● Community Pulse and Sentiment Monitoring
● Proposal Development and Refinement
Additional engagement types can be easily templated and designed into reproducible decision-making wizards. Utilizing Ethelo’s API we can create real-time data dashboards, ensuring transparency, and creating a sense of meaningful participation amongst community members. This enables us to build an iterative process that begins with implementation of existing tools, increasingly integrating processes into a cohesive technology stack.
- Polity Panel Creation
Polity’s growing technology stack is being designed to transform one-off community engagements typically run through Ethelo, into ongoing discussions structured into persistent panels. This system is designed to run through Polity’s native app, or can be integrated into external platforms through an API mechanism.
- Gitcoin Passport & Open Source Observer Data
To prevent Sybil attacks and ensure reputation-based governance, Gitcoin Passport and open source observer data provide on-chain identity verification and historical contribution tracking.
- AI Integration
There are a plethora of integrable AI tools that can be used to provide governance assistance. Over the long term, more complex integrations focused on blockchain-native AI solutions can be explored, for example, integrating autonomous AI agents, such as those of the BitGPT Network, which we maintain an ongoing relationship with.
Evaluation Metrics & Conclusion
Measuring Success
To ensure the governance framework operates effectively, the following key metrics can be tracked: **1. Participation & Engagement
● Early-Stage Participation Rate – % of governance participants engaging in Decision-making Panels Panels & pre-vote deliberation.
● Sustained Engagement Score – Measures long-term contributor activity using reputation-weighted metrics.
**2. Governance Efficiency & Decision-Making **
● Proposal Iteration Rate – Measures the % of proposals refined through structured deliberation before final voting.
● Strategic Alignment Score – Evaluates alignment of governance and funding decisions to strategic priorities monitored through quarterly Community Pulse…
Conclusion
This governance model is designed to be scalable, adaptive, and community-driven, ensuring:
● Sustained participation and engagement incentives **that foster a governance culture.
● **Transparent and reputation-based decision-making **to prevent governance capture.
● **Data-driven funding allocations **that align with high-impact community needs.
● **A low-friction governance process **that enhances Allo’s broader ecosystem goals.
Through modular governance integrations, AI-assisted coordination, and participation-weighted incentives, this framework will ensure Allo’s governance and funding mechanisms remain adaptive, transparent, and effective.