The Next 2 Years: DAO Resolution Pt.1

[Kash]

Focusing on the DAO’s purpose, progressive independence, and high-level funding.

Our vision is for the Jupiverse to become the biggest, most productive, and most enduring community pushing the decentralized meta forward globally. And, in the process, further adoption of Jupiter products, technology, and ideas.

The Jupiter DAO is the legislative arm of the community. It is the largest and most active DAO, and just turned 1 year old. In the first 12 months, we set an example that many other projects have followed.

But with hundreds of millions of $JUP staked, hundreds of thousands of voters, and countless hours of conversation, we know that there are areas to make the DAO even better, even more outcome-oriented, and even more focused.

Learnings from Year 1
The Jupiter DAO is an ongoing experiment. We decided consciously to pioneer key ideas that many other projects are already adopting (Work Groups, Active Staking Rewards, weekly Planetary Calls, etc).

When you innovate at the frontier, the goal is not to be perfect from Day 1, but to learn as much as possible as quickly as possible and to iterate in order to improve.

From this lens, the first year of the DAO has been a success - we have learned a f*ckton. Some examples:

• Clarity is king. Without clear definitions and scopes, it’s hard for the DAO to be able to be effective. We need to do a better job defining what specifically the DAO does and what specifically the Jupiter Team does. We also need to do a better job defining what the DAO should strive towards becoming, and how the DAO works in relation to the Team and our products.
• Voting is an incredibly powerful way to concentrate community attention. Choosing vote topics intentionally and with great care is of the utmost importance. Community attention is a scarce resource, and too many votes, especially about things that are insignificant, does not create lasting value for the Jupiter ecosystem. .
• Direct Democracy for every budget is not ideal. Direct Democracy works best on large scale issues that benefit from a community mandate. Other decisions that don’t require this same mandate (e.g. individual talent contributing to the DAO) should not require literally everyone in the DAO to vote.
• The DAO cannot please everyone. The DAO has hundreds of thousands of stakers and voters. That’s hundreds of thousands of opinions. It is impossible to try to satisfy everyone simultaneously. Some degree of disagreement is healthy and necessary, but the DAO needs to concentrate on its mission, rather than being responsive to every single voice on crypto twitter

Progressive Independence
Perhaps the biggest learning has been that the DAO is still a baby. It’s young and still finding its way. It is very well decentralized - the distribution of power within governance is held by ~400,000 voting wallets. But it has not yet become independent in the sense of full autonomy from the Jupiter Team.

We are at a crossroads, and can either launch the DAO into independence right now, or we can admit that there is much work still to be done. In order to optimize for outcomes that benefit the Jupiter ecosystem, we choose the latter.

For the next 2 years, we propose that the DAO continue its journey of Progressive Independence, supported by the Jupiter team. During this 2 year term, the Team will remain an active participant in creating new structures that enable the DAO to fulfill its mission.

After these 2 years, we expect the DAO to be mature. Our vision is for the DAO to be a powerful legislative body for the community, filled with talented contributors, and have the full faith of the community to execute on key initiatives. At that point, it will be both decentralized and independent, and the Team can move to a more passive role.

But until then, the Team will take an active role in improving the structures of the DAO. Day by day, we hope the DAO can become more independent until, at the end of 2 years, it is fully independent. There are a few milestones that should be hit on the journey to full independence:

• A defined proposal generation process that leverages community sentiment, that both the team and the DAO must adhere to in order to get a vote to proceed.
• Operational control of the DAO treasury, which is currently controlled by 3/5 signatures by the team and should instead be controlled by 3/5 members of the DAO
• Legal incorporation that provides regulatory clarity for all DAO participants
• Independent DAO funding that does not require manual top-ups from the Team
• Full transparency and accountability via regularized reporting on the value creation taking place within the DAO

But our key focus for the next 2 years must be to focus on outcomes over anything else - we must ensure, collectively, that the DAO is creating massive value for the Jupiter ecosystem. During this 2 year term, the team will work aggressively to create the experiments, systems, and processes that enable the DAO to its purpose effectively independently . This document is the first major step in that direction.

The Purpose of the Jupiter DAO
The Jupiter DAO is the legislative arm of the community. It creates legitimacy and a social mandate for its initiatives via votes. Votes are an extremely powerful way to concentrate community attention and rally support for a particular cause.

The DAO aims to accelerate the growth of Jupiter’s community, product adoption, and ideas. To do so, it should create proposals and leverage its Treasury to power initiatives that increase user adoption of Jupiter products, increase engagement within the Jupiter community, or drive global adoption of Jupiter ideas.

Most DAOs optimize for preservation. The Jupiter DAO can be exceptional only if it optimizes for expansion. The DAO is most valuable if it contributes tangibly to the creation of a larger decentralized movement.

If successful, the JupiterDAO can be the critical social infrastructure powering the adoption of an open, permissionless, and transparent onchain economy.

The Role of the Team
The Team is responsible for building products, creating a valuable business, investing protocol fees, and creating token utility.

Any items that do not require a social mandate or use of the DAO Treasury/Community Reserve do not require a DAO vote. However, the Team may voluntarily elect to bring any topic it seems fit to the DAO for a vote, should there be a benefit from the social mandate the DAO provides.

Strategically, the reason for this division of labor is simple: the DAO should focus on doing things that benefit from decentralization, while the Team should focus on doing things that benefit from clear strategic execution. The Team has more context and more expertise around the items listed above. Of course, the DAO is welcome to suggest ideas, and can be a powerful laboratory for new ideas to germinate. But it is not able to action on those ideas without the Team’s buy-in and execution.

To summarize:

• The Team: builds products, manages the business, and designs token utility.
• The DAO: accelerates growth of Jupiter products, community, and ideas while providing a social mandate on proposals.

Having a clear cut line between what is the responsibility of the DAO and Team is an essential step in ensuring alignment of vision and purpose.

The Funding of the Jupiter DAO
During its inception, the Team allocated $10m USDC and 100m $JUP to the DAO as an operational budget.

Now, a year in, the $JUP has not been spent, and the Team is committed to topping up the DAO Treasury to $10m USDC once more for the DAO to allocate over the following 2 years. Simultaneously, the Jupiter Team will commit to exploring funding mechanisms for the DAO and Work Groups so they can become more independent over time.

But at the end of the 2 years, the DAO will not be left high and dry. Instead, we propose that the DAO get access to the Litterbox Trust (LT). The LT receives 50% of protocol fees from Jupiter, and has a mandate to accumulate $JUP (roughly 32m $JUP at the time of writing). The LT was always designed to further Jupiter ecosystem growth initiatives. The DAO will be able to use the Trust to fund efforts or decide what to do with it that best aligns with its mission.

Activating Talent with the Jupiter DAO
The best DAOs don’t just distribute governance—they distribute opportunity. They create more owners, not just more voters.

If the DAO is to create value for the Jupiter ecosystem, it will require talent to do so. And the beauty of the DAO structure is that it enables a meritocracy to arise. Credentials and degrees mean nothing if you do not also have proof-of-work.

To that end, the DAO can use its treasury to compensate both individuals and groups via Grants and Work Groups. In either case, any community member proposing for an allocation of more than $10,000 must do so in public in the Jupiter Research Forums and post an Accountability Update every quarter.

All Grantees and Work Groups should be evaluated by their ability to make meaningful progress towards helping the DAO accomplish its core purpose. Their scope should remain narrow, and their work should remain in public.

The most valuable resources in crypto aren’t tokens but talent networks that self-organize around meaningful work. The Jupiter DAO should continue taking a leading role in developing playbooks that others can learn from.

The Work is Just Getting Started
If the DAO can ratify this set of definitions and terms, the community will have effectively given a formal agreement on the purpose, scope, and high-level ideas behind the DAO.

Once that is done, we can begin the hard work of reformulating the mechanics of the DAO to better fit the learnings outlined above. As just a starting list of topics to consider:

• Budgeting processes that don’t require all $JUP stakers to vote every time
• Formation of Work Groups that justify the pressures of working in public
• Pathways for community proposals to go to a DAO vote based on community sentiment
• Pathways for new community leaders to emerge
• Sustainable funding mechanisms for the DAO
• ASR funding
• How to make $JUP a true community currency that becomes a medium of exchange and store of value for the Jupiverse .

There is much work to be done. The stakes are high, but so are the rewards.

If, together, we are successful, we will have created tangible, unstoppable momentum for the entire Jupiter ecosystem.

[degen_w]

solid draft, I like the direction we heading.

[Kash]

appreciate you degen! thanks for reading

[0xjordy]

Thank you for sharing here @Kash

It sounds like the feedback of the community is well heard and that Jupiter team + DAO is addressing it proactively. From observing Jupiter over the past couple years, and attending Catstanbul, proactiveness seems to be a consistent theme for Jupiter and its work groups. This is great to see.

Looking forward to how this draft evolves and the subsequent proposals that come of it.

As a side note, but somewhat related, would also love to explore with you on Ecosystem Growth initiatives for Jupiter

[aerogr]

Proposal for DAO:

1. We should prepare the year for post Jupuary S3: How to fund ASRs, incentivise staking etc.
2. We need a way for DAO to easily evaluate the progress of CWG. We need a dashboard embedded in DAO that tracks all CWG links, moves stats.
3. Referrals should be deeply integated in the CWG progress tracking, as a way to capture their strengthening of JUP and broad impact.
4. We need DAO to help into optimization and direction of current products, such as jupSOL, JLP, Perps, Jupiter Pro and Swaps
5. We need to move into affiliate marketing and web2 integrations. A discussion on how to better market outside and inside WEB3.
6. On Ramping projects, and payfi projects should be deeper integrated into JUP and accessed easier.
7. Similarly jupSOL should take a more central position in portfolio and main JUP site.
8. Additionally, we need to move into further integrations with core DEFI, DEX, Lend/Borrow protocols
9. Finally, we need to start a process of creating Decentralized systems that allow JUP to automatically expand reach.

Most importantly the referral system fees and earning (affiliate) are a way for CWG to be SELF-Founded after initial funding through their work on expanding the reach of Jupiverse and JUP products.

[unfungiblehuman]

Overall, this draft provides a strong foundation for aligning the DAO members around a shared vision. I look forward to seeing the proposal version and participating in the vote. Great work Kash!

[vancanthen]

Thanks for the great resolution. I also reflected on the DAO after 1 year as a larger holder and published it a few hours ago. Maybe you find time to go over it. Best, vancanthen

Recommendations from a Large Holder to the Jupiter Core Team: Connecting the Dots for a Stronger Future

Recommendations from a Large Holder to the Jupiter Core Team: Connecting the Dots for a Stronger Future To the Jupiter Core & DAO Team and the Community, As a long-term supporter, early believer, and larger participant in the Jupiter ecosystem, I would like to share some reflections and suggestions—expressed with appreciation, trust, and the shared desire to see Jupiter reach its full potential. What follows are not criticisms, but perspectives offered in the spirit of constructive dialogue. …

[STASH]

Looks solid. Focus for the DAO should definitely be expansion, not just preservation.

[OrangoRosa]

It’s a nice draft, but I think we should start to define clearly who are the stakers. Do they have to be considered “stakeholders”? Loyal clients? A kind of “sales force”? A focus group? Something else?
Without defining their role I see difficult to decide what the DAO should or should not do, how and all the rest.
You say that the DAO is the legislative arm, but this implies that the team should be the executive power and still lacks the “juditiary” part to have the set complete and balanced. Personally I find that definition a bit too wide. Holding stakes or voting power does not make you necessarily competent enough to express an informed opinion.
I don’t want to go too far with examples, but I just suggest to start from the beginning in order to get things done in the most logic and consistent way possible. If we don’t know who we are it comes to me hard to see what we can or should do

[lochie2001]

@Kash

At the end of the 2 years, the DAO will have access to the Litterbox Trust funds with the objective of driving more growth for the Jupiter ecosystem. This will be in addition to the existing Community Reserve, which was funded with 50% of the token supply at the genesis of the $JUP token under the 50/50 principle.

I think this is a great idea and give people a better outlook at the future of the dao. Creates certainty

@Kash

• Budgeting processes that don’t require all $JUP stakers to vote every time
• Formation of Work Groups that justify the pressures of working in public
• Pathways for community proposals to go to a DAO vote based on community sentiment
• Pathways for new community leaders to emerge
• Sustainable funding mechanisms for the DAO
• ASR funding
• How to make $JUP a true community currency that becomes a medium of exchange and store of value for the Jupiverse .

All of there are very important, but I guess how do we decide what budgets need to be voted and what don’t?

So we set a $ threshold? Or do we perhaps set a time threshold, I.e. only for WG budgets for 3 months or longer

[RJMG]

Well, after reading the proposal (something everyone should do before voting),

I have to say I liked the draft so far.

It’s true that we’re just babies trying to take our first steps, but I think based on the vote, we’re on the right path toward what we’re looking for: alignment - Team - DAO - community.

So… I see the part where it says we won’t vote on some working group budget processes as a good thing, which I think is fine.

Jupiter is a top-tier company and should know the step it’s taking when it decides to hire someone or a team… which the small minds participating in the DAO (voting) don’t understand beyond receiving ASRs.

So, they question the direction of the DAO with their (totally respectable, as long as they’re constructive) comments on social media, which puts a lot of pressure on the company.

In short… you can’t keep everyone happy, and business decisions should be made behind closed doors (IMO). Then… the ASR issue.

People are waiting for a redesign of ASR incentives.

It’s the main gateway where people never lose hope.

While no one can complain about the returns so far because they’ve been unbeatable, we have to look to the future.

Every quarter, the percentage drops by 4-5%, so in two more quarters, we’ll get 0%? I know this isn’t going to happen, or shouldn’t.

The DAO would already finance it, according to what I read, but… I’m not one to say how things should be done, nor do I have the technical knowledge to do so… but in my humble opinion, I ask this question.

How could we improve the ASR for the future?

Fixed interest?

A mix of JUP + USDC?

Don’t leave your ideas behind, and let’s talk!

[Jaam]

I’d like to open a discussion on the underlying philosophy presented in this post.

“The Jupiter DAO is the legislative arm of the community.”

Yet:

“For agility and for effectiveness, Team must retain full control on product strategy, business acquisitions, token utility, and deployment of protocol fees to ensure the long-term sustainability of the Jupiter ecosystem.”

This raises an important question: what checks and balances—if any—are actually in place here?

The team and early investors hold large allocations of $JUP and therefore significant influence within the DAO. However, the DAO has no formal mechanism to counterbalance that power. This seems to contradict another point made:

“Clarity is king.”

How can we have clarity when the team and early investors can exert disproportionate influence over DAO decisions, while the DAO itself has no oversight or say in the team’s actions? That doesn’t align with principles of transparency or decentralization.

Then there’s this:

“The DAO should, over time, become a self-sufficient entity, independent from the Team in terms of generating proposals, utilizing the DAO treasury, and finding sustainable funding mechanisms. But for the next two years, the Team is here to support.”

Frankly, this feels more like a structural division than genuine support. How is the DAO expected to become financially self-sufficient over the next two years when the core revenue-generating product—Jupiter—is fully controlled by the team? No other products or services currently exist that generate revenue, and all proposals related to funding so far rely on Jupiter’s ecosystem.

The DAO appears to be getting boxed in. For example, there’s still no community vote on tokenomics—even though:

“How to make $JUP a true community currency that becomes a medium of exchange and store of value for the Jupiverse.”

How can $JUP become a true community currency when the community has no meaningful say in its utility, governance, or distribution?

Usually, I’m enthusiastic about proposals and appreciate how both the team and DAO have aligned in the past. But this direction feels off. Some good ideas are mentioned, sure—but the way these philosophies are presented gives off a concerning lack of transparency and community empowerment.

[sirnaynay]

Hey Kash, if the value of the DAO is in evangelism of Jupiter, how do you propose we monetize that? It seems more prudent to allow the Jup team to drive value for Jup through the Jupiter product line and utilize the DAO as a multiplication effort for value driven.

[sirnaynay]

Another question. Why would the litterbox funds go to the DAO? Those funds come from the team. They are an investment from the team. An active investment in the success of their tokens. Shouldn’t the team keep those?

[0xbrawlie]

Hey @Kash, after reading the proposal I began thinking about how to formulate my response. Then I read some of the comments (#12 @RJMG , #13 @Jaam , and #14 @sirnaynay ). These three individuals (and if you include the previous posts by @ihateoranges , 4 individuals), have really captured a lot of what I wanted to say. @sirnaynay really hit the nail one head. Part of the issue is we’ve tried to tie value creation for $JUP to the DAO efforts in conjunction with that of the team. This has created confusion, and blowback when it appears that funds are being spent without clarity on HOW value will be returned the $JUP token. Now, the various work groups DO return value to the community, e.g. PPP Hours, the new DevRel and Design WGs, but that value does not directly translate to $JUP.

Ultimately, I have come to the belief that all direct value creation should be housed/spearheaded by the Team (e.g. perp discounts, USDC “dividends” [we have very smart people here, figure out a way to make it work], et al.), and that the DAO should focus on:

1. Doing real tangible good in the world (collab with organizations fighting water insecurity across the globe for example)
2. Creating opportunities for education / skill transfer (PPP, workshops, etc)
3. Creating opportunities for people to demonstrate excellence both online and IRL

We come hang out in the DAO because it’s fun, we are doing cool shit, and making a real impact in the world…oh and if you happen to have staked $JUP there is a giga chad Products Team that is driving real economic value to that token.

I have significant concerns with trying to make the DAO revenue generating, as I do not believe that is the role of the DAO (e.g. LFG v2 please nope).

Maybe the 50/50 principle needs to be renegotiated? Maybe the litterbox fund was too aggressive, and has put operational constraints on the products team…we are all capable of making good decisions, and also bad. If something isn’t working, I’d rather re-evaluate, and come up with a better solution that leave things in place because reasons. (If these things were to change, as long as they are being replaced with a clearer path forward, that is what would be long term bullish.)

Happy to chat here or offline

[ArjayRay]

Love the draft.
Great work, Kash!

[iSAK]

One of the most important things here would be first to properly identify the role of DAO, are we an independent entity, what is our focus? Of course we are aligned with Jupiter and it’s team, but when it comes to stuff like:

@Kash

After 2 years, we hope the DAO will be well suited to mature into independence.

• Is the DAO as an independent entity allowed to venture into stuff which is even bigger and outside the Jupiverse?
• What happens if a decision taken by the DAO is something which doesn’t align with team’s views?
  And so on, of course these are things which will obviously be figured out as we go on through the upcoming years, but definitely something that should be of the utmost priority.

@Kash

At the end of the 2 years, the DAO will have access to the Litterbox Trust funds with the objective of driving more growth for the Jupiter ecosystem.

• In other words, after 2 years, DAO’s complete operation would solely rely on the revenue it’s generating through the initiatives that it has undertaken to sustain itself, right? This is going to be a very big thing for the DAO and honestly, I think it’s a great the team wants to help the DAO, but one important thing would be, this is in no way offense to anyone from the team, they do a lot for the DAO and community, but will there be efforts taken to know the community on a more personal level as well to help the DAO in a better way to grow on it’s own while still learning rather than end up getting spoon-fed by the team in their efforts? I think there’s a lot of potential that this DAO has and the people working in there are some of the best talents in this space, but the next 2 years are definitely going to be very crucial.

Excited to see where we go from here and even more to be a part of this journey!

[Madeno]

solid draft, glad to hear this good news, jupiter keeps on moving forward without stopping