DAOs are more than a Discord channel and a treasury. This is a reflection on what it really takes to run a DAO: the challenges, the rewards, and the recommendations for future endeavors.
November 11, 2022
NOVEMBER 11, 2022
Last updated December 8, 2022
A reflection on all the accomplishments (and challenges) of participating in a DAO
In 2021, there was endless hype around decentralized autonomous organizations and their experiments. Some raised millions of dollars from accredited investors to invest in Web3 companies. While others, raised funds to buy the U.S. Constitution or a copy of a Dune storyboard collection. They all moved fast, and some broke things—most egregiously, the trust of their communities and the public.
Des Femmes DAO, however, has worked diligently to move slowly and build trust. It’s why I’ve so unapologetically recommended the community to everyone looking for a safe space to be a little crypto-curious.
Des Femmes co-founders Leigh Cuen and Camila Russo envisioned a publication and community, “that featured stories about women thriving in tech and finance.” Cuen and Russo were attracted to the DAO structure because it gave active community members the chance to co-create and manage funds on behalf of a larger organization.
After raising roughly $40,000 via Gitcoin in early 2021, hundreds of people contributed to the premiere issue of the Des Femmes print magazine. Which publishers then distributed to more than 700 retailers across North America. Afterward, they established the De Femmes LLC to cover compliance and operational procedures during the transition from crowdfunded magazine to community-driven ecosystem.
With an established business entity and up-and-running community, Des Femmes community leaders outlined the following goals for their DAO experiment at the end of 2021:
While originators thoughtfully planned and executed many aspects, some unforeseen challenges impacted the experiment’s momentum. This report looks at both the accomplishments and obstacles the Des Femmes DAO experiment faced. It offers recommendations for anyone interested in building a DAO themselves.
Between 2021 and 2022, the DAO experiment keyholders (two community-run multisig wallets) received roughly $50,000 worth of support from Des Femmes LLC.
Most of these funds paid the keyholders for labor associated with setting up and managing the wallets and community portals. Although, keyholders also went above and beyond the requirements of those freelance payments. The keyholders operated on a lean budget, yet the money was all theirs. And they proved that DAOs can function without speculative investments or large treasuries.
Unlike many DAOs, Des Femmes never accepted VC investment nor sold tokens. Although Des Femmes LLC did accept a few small angel checks from individuals interested in DAO experiments. Magazine sales and ad revenue also provided a modest income stream, in addition to membership fees.
For the BTC wallet, the Des Femmes LLC paid $2,000 for setup, Casa membership, and labor (keyholders paid the $1,000 each to cover the Casa membership fee). The LLC did not require an upfront investment of personal funds for the ETH multisig wallet.
In retrospect, services like Casa and Layer3 were more complicated to use than the value they provided. A computer science tutor source from the Des Femmes community would have been more than sufficient to overcome any confidence hurdles the keyholders had.
The DAO's compensation for keyholders included:
Cuen made a conscious decision not to be a keyholder for either wallet in order to keep the LLC’s interests separate from the DAO’s decisions.
Once Des Femmes LLC funded the DAO wallets, the keyholders could distribute the funds as they saw fit. The DAO required at least 2 to 3 keyholders’ “signatures” to release the funds. Though the organization encouraged all keyholders to discuss ideas before making a decision.
Participation in the DAO experiment became a stepping stone towards bigger personal goals for many members. And for most keyholders, the Des Femmes DAO experiment was their first multisig wallet experience. It was a unique opportunity to manage a small but meaningful amount of funds.
ETH keyholders Autumn Phaneuf and Danielle Leong are launching a consulting firm together for Web2.5 companies needing a Web3 strategy. Phaneuf is also working with Melissa Henderson on Henderson’s company Violet Verse, a token-gated Web3 lifestyle platform. Mariam Kouanda and Rachel Hyman are both learning about BTCPay server together. While Sari Azout, founder of Startupy, met one of her own startup's investors through the DAO experiment.
All things considered, the DAO experiment delivered career advancement opportunities and educational experiences for those who participated. It also provided some key insights into how a DAO can be run more effectively.
While anyone can join Des Femmes, there is still an application process and membership fee. It curtailed ghosting by admitting people who were committed and aligned with the project’s mission, not just people who were curious about it.
Other than the $100 annual membership fee and following the code of conduct, Des Femmes has no other requirements of members that joined in 2022. The community has mostly non-accredited investors, yet many (including keyholders) were interested in finding access to investment opportunities. Future DAOs would be wise to take note of this and explore it further.
Members also voiced their appreciation for being involved in such a dedicated and respectful community. Especially in comparison with other DAOs that seemed more focused on raising money and creating FOMO. Using Slack also prevented spammers, which is a widespread problem with Discord.
While paid membership ensured a smaller, more dedicated community, it did not automatically equal engagement. Even when keyholders invested their own funds into the DAO, it still did not seem to incentivize participation in a monthly meeting.
Personally, I gained more from my involvement than I feel I can ever give back:
Being part of Des Femmes gave me the confidence to take myself seriously as a woman working in crypto. Whenever I feel stumped or confused about the industry or tech as a whole, I know I can ask the Des Femmes community for help.
And I’m not alone in that feeling. “Every time someone asks for advice in the Slack channel, it’s great to see people get so involved to provide support,” said Kouanda.
Members were recommended not to rely on Des Femmes for full-time income. So, everyone likely prioritized their income-generating activities (as well as personal needs) over this task. “You can’t assume you’re going to pay your bills with DAO employment,” reflects Henderson.
As a community member, DAO experiment participants were encouraged to engage with the decision-making process. While proposing ideas is an awesome and very democratic concept, everyone has to take ownership to make it happen.
Kouanda, for example, had suggested that Des Femmes have a side event during EthCC in July 2022, but when it came down to organizing, she just didn’t have the bandwidth. I also wanted to organize Des Femmes events in the Netherlands. But I knew I didn’t have the time to see it through.
As for planning and organization, while Cuen and other members made some effort to provide structure to meetings and processes, the motivation to take action simply wasn’t there. It was also challenging to coordinate transaction executions across people’s schedules and timezones.
If the DAO had more money, it could’ve been possible for Des Femmes LLC to hire ongoing operational support, beyond the initial compensation to get both wallets started. However, it’s unclear whether more staff would have changed anyone’s behavior or motivation. Both Hyman and Kouanda wanted to learn more about being multisig keyholders, which was a quickly satisfied goal of the experiment.
Upon reflection, a fruitful opportunity may have been to find compliant investment opportunities. It would be a non-dilutive way for the DAO experiment (or keyholders) to generate income. Thus resulting in more capital, which could have led to more possibilities for programming. While educational opportunities and service providers like Casa progressed personal goals for keyholders, they did not necessarily contribute to the long-term stability of the DAO experiment.
Leaders in the group told keyholders that, in service of other Des Femmes community members, they “can spend community funds on anything they all agree to, whether that’s on custom illustrations or art for the next print magazine or a VR art exhibit or an IRL event in Miami during the Bitcoin 2022 conference or swag for the community. There’s no limit to the possibilities!”
Multiple keyholders mentioned an interest in NFT programs, live events, and sponsoring content creation for the print magazine. Throughout 2022, the DAO experiment paid for:
It seemed, however, that “endless possibilities” was not specific enough to sustain excitement and engagement. Over numerous calls, keyholders tried to define leadership roles and what “co-ownership” meant in the context of Des Femmes. Ultimately, they did not reach a consensus on what it meant to spend funds in service of the community, which would have helped the DAO experiment be more effective.
Sometimes, too many options can be a hindrance in itself. On the bright side, however, throughout the first half of 2022, dozens of women from the Des Femmes community learned about holding their own keys through the DAO experiment. Additionally, they attended IRL events with keyholders.
Des Femmes saw the greatest engagement with six to eight week-long projects, as demonstrated during the NFT and bounty experiments. The clearly defined timelines and goals were both likely reasons that the shorter projects were so successful.
“Being a part of a DAO doesn't mean you'll be getting paid to slay on your next baecation,” reflected Henderson. Amidst the glamor and glory around DAOs, there is a lot of unpaid labor. For many—including Cuen—launching and running a DAO is a calling. It’s something that founders are willing to pour uncompensated time and energy into in order to see it succeed.
Much like launching a startup, no one starts a DAO with the expectation that it will turn a profit within the first year. At least, those who are responsibly and thoughtfully starting one.
“DAO Treasuries are not as liquid as you may think,” said Henderson. “Just because there’s assets on-chain doesn’t mean you can drain the treasury to pay bills.” While the decentralized, unregulated nature of DAOs makes it seem like there’s free money lying around, DAOs and their keyholders need to take their positions seriously.
There have been numerous horror stories of rug pulls and accusations of misusing funds. That’s why this intentionally curated community of women passionate about decentralized financial sovereignty has been so empowering. I take comfort in knowing that the Des Femmes DAO’s success doesn’t reside in centralized hands. I truly believe everyone has come to this community with the intent to build something long-lasting.
It’s also why I enthusiastically take opportunities to work for Des Femmes—and get paid for it. I trust that the keyholders (and Cuen) are making responsible decisions with the funds in a way that serves the community. “I can only imagine the type of lobbying an individual with no history in a DAO has to do to navigate getting paid or finding opportunities to get paid,” said Henderson. “The best way to get paid in a DAO is if you co-found something. If your name and reputation is on the founding governor proposal, there's a high chance you'll get paid.”
But there’s also no guarantee. In some cases, keyholders are true gatekeepers of funds who may be reluctant to approve payments. If you are a freelancer, contractor, or content creator for a DAO, make yourself visible to the keyholders. Des Femmes made this easy by including keyholders in the initial conversations about contract payments. Everyone was clear about who Des Femmes LLC was for what deliverables and when, which reduced confusion and aligned expectations.
Many DAOs also launch their own token, which it then uses to “compensate” their contributors. Tokens rarely offer value to holders outside the DAO, and may not be as valuable in other crypto or fiat currencies.
Des Femmes chose not to launch a token for a number of reasons. The legal and fiscal responsibility alone were enough to deter Cuen. But she also asked the seemingly obvious question: why would Des Femmes need a token? There has yet to be a clear need for one, and so Des Femmes instead compensates contributors and freelancers in either fiat or crypto.
And as a DAO contributor, I appreciate working with fiscally responsible people.
According to a report from the Alliance for Lifetime Income and HerMoney, nearly all women in relationships manage their household finances, including investments and retirement planning. Yet less than half of women expressed confidence in speaking with a financial professional alone, according to a survey by Fidelity Investments.
As women take bigger roles, become more independent, and demand equal pay, they can no longer afford to be timid about money conversations.
A DAO can be a perfect experimental opportunity to step outside that comfort zone and have brave conversations about managing money. Even if a small group of women wants to create a wallet amongst themselves, they can have multiple keyholders (or just share one key to one wallet, for small amounts of money). Whether it’s a group of Midwestern grandmas investing in stocks or a global community of feminist cypherpunks, collective fund management can gather diverse individuals around a common interest or goal.
In the case of the Des Femmes DAO, the experiment brought together a handful of women to support numerous projects. All of which wouldn’t have been possible with a single operator hiring and managing all freelancers. While it requires members to take some personal responsibility for the project, it also fosters a collective sense of success. And even beyond that, it pushed women to talk about money—skills that hopefully translate to their lives outside the community.
The experiment has laid the groundwork for infinite possibilities. A group of friends can create a DAO for planning each others’ birthday parties. A community of immigrants can create a DAO to support their local neighborhood as well as their families back home. DAO experiments don’t need big budgets or dozens of members to execute great ideas.
Clearly there is a hunger for purpose-driven organization. As the internet shrinks global borders, more and more people are turning to online communities.
However, being a decision-maker is hard work. And for the foreseeable future, DAOs will still need some sort of centralized power and decision-making. For future reference, define goals, milestones, and resources up front so that success can be more easily measured and felt.
As one of the final projects in 2022 for the DAO, the ETH multisig keyholders emptied the shared wallet to pay for this report and distributed the remaining funds (less than $60 worth of tokens each) to keyholders as a gift of gratitude from the community. Likewise, the bitcoin multisig keyholders started a similar transaction, emptying the multisig and transferring it to the BTCPay setup, which is still in process. All things considered, this marks the end of the 2022 DAO experiment.
With these lessons learned, the Des Femmes community, as a whole, has the great potential to outlive many DAO experiments because they’re building trust, being purposeful, and putting their money where their mouth is. These first multisig experiments may end in 2022, yet the greater value accrued lives on through the connections and resources these women built up together. No matter what form the community takes in 2023, they will undoubtedly continue to pave the road towards self-sovereignty and personal wealth.
Have questions about starting your own DAO? Looking for a community of badass women in tech and finance? Join the Des Femmes community today!
30 November 2022: a previous version stated that Phaneuf and Leong were launching a startup together.
**Disclaimer: Users should take nothing on the Verse as financial advice. Please do your own research. $VV utility reflects engagement on the protocol, accessing token-gated content and community events.
Photos by Ceres (Diaja), @omg_diaja__
Makeup by Christina Vega, @christinavartistry
Jewelry made with Coinkite Opendime products