The Bull Case for Pods
Chase Chapman
0x5144
Julia Rosenberg
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frogmonkee
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June 14th, 2022

The atomic unit of a DAO isn’t people or projects – it’s small groups of people working together.

While there has been a push to atomize work through bounties and other ways of defining and compensating work, the fact remains: DAOs are groups of humans coordinating together to solve problems.

We see this through the emergence of workstreams, working groups, guilds, or whatever else you choose to call the small teams that make up almost every DAO.

Pods 101

At Orca, we use a singular name for these different types of teams – pods. These pods are usually governed by token holders, delegating responsibility and imbuing pods with authority to enact a certain mandate, whether that be to manage a grants program, build a product, control marketing channels, manage security, etc.

We’ve seen this pattern play out time and time again – Yearn, BanklessDAO, TribeDAO, ENS, MakerDAO, etc. It’s the dominant model for creating teams, empowered by token holders.

That’s why we built Orca Protocol, a way for DAOs to easily spin up working units while managing them through on-chain governance.

Technically, pods are a lightweight permissions layer around a Gnosis Safe multi-sig wallet, used to create more flexible and composable working units. Access to a pod is authorized through membership NFTs. These NFTs act like office keycards. When you swipe into your office, your keycard is validated against a set of permissions to see whether or not you have access. Changing key cards (adding new members or revoking access) is as simple as updating office access permissions.

Pods create on-chain structures, ensuring DAOs can benefit from the security, permissions, and autonomy of being on-chain while maintaining the flexibility of small working units. You can learn more about pods here.

Benefits of Pods

But why would an organization want to use pods?

1) Give the right people the right type of autonomy

Pods give autonomy to the most fundamental unit of work happening in DAOs – groups of people focused on directed tasks. Autonomy in this context could mean control of funds, governing rights, or even smart contract permissions. Pods need autonomy to operate, otherwise, they risk getting stuck in a bureaucratic maze asking for permission to perform even the most basic tasks.

Example: TribeDAO gives certain pods control over specific protocol features. This means when protocol-level changes need to be made, the right people have the autonomy to make those changes without requiring DAO-wide votes or benevolently trusting a small group of people to make those changes. Instead, pods introduce the needed accountability systems for these groups of people – without forcing them to trade off their autonomy. Read more about TribeDAO’s pod implementation here.

2) Create flexible, on-chain structures

Part of what makes DAOs unique is their ability to leverage on-chain structures to create and scale bespoke organizational structures rather than managing those structures without on-chain activity. But putting structures on-chain tends to create a level of inflexibility – often DAOs are forced to create complex and opinionated mechanisms for things like voting, exiting, membership, etc.

While opinionated structures can be helpful, the inflexibility they introduce can be a challenge as DAOs evolve and change. Different stages, market conditions, etc can all introduce new variables in a DAO’s organizational structures.

Pods give DAOs the benefits of being on-chain, while also creating incredibly modular structures that can be shaped, shifted, and re-imagined without breaking the entire system. These pods can relate to each other in a variety of ways, allowing for sophisticated coordination between them. For example, a contract can manage members, or you could have another pod – where members are elected by token holders – managing members.

This combination of dynamic structure with cryptographically-secure assurances fundamentally comes down to balancing trustware and socialware. The pod-sibilities are endless!

Example: ENS first implemented pods with existing workstreams. After a season of experimentation, they decided that the existing structure didn’t fit the needs of the organization. Typically, this type of change in structure would require a significant rehaul of DAO tooling. But because pods are modular structures that are intended to evolve, the required changes were lightweight and structurally compatible with existing tooling.

3) Make your DAO consumable by people and tools

Understanding who is working on what, which groups exist, and where work is getting done in a DAO is not easy. There’s no design language for understanding the organizational structures of a DAO.

While a person might be able to figure this out by poking around in a Discord, DAO tooling requires someone to act as an oracle, telling it which people are doing the work. This means a lot of configuration and space for errors.

Because pods are on-chain and membership is granted via an NFT, they are consumable by any tool that reads on-chain data. For example, DAO tools can simply read pod structures and relationships to do things like map an organization, identify key members, understand token streams, and more. Pod consumption also applies to web3 social networks, defi protocols, and other products that leverage relational graphs of addresses.

Example: If a group wants to do a Coordinape allocation, they would typically need to select which people to bring into the circle for that epoch. If a DAO uses pods, Coordinape can simply consume pods and immediately have the exact blueprint of who works with who and where work is being done. This could mean automatically spinning up Coordinape circles that are updated with active pod members every epoch.

Note: Coordinape does not have an active integration with pods… yet. 😉 You can read about our existing integrations (like Parcel) and follow our upcoming integration announcements here.

4) People come and go, but pods are forever

DAOs are like the Ship of Theseus. If you’ve built a strong organization, it shouldn’t matter who comes and goes – the organization is still the organization. Pods make this true on-chain.

Pods give atomic groups the power that comes with a multi-sig (including asset ownership, voting power, the ability to perform different actions on-chain, etc), while also creating structures to make sure the right people are holding that power. That means “replacing boards” (members) on the “ship” (DAO) is much less painful.

People come and go, pods are the container that lasts.

Example: FireEyes uses pods for metagovernance delegation – which means people delegating to FireEyes are not delegating their votes to an EOA or even a multi-sig with no clear structures for signer management. Instead, people are delegating votes to a pod with clear membership structures – so delegators don’t need to worry about who is on a pod or how membership is managed, it’s all visible on-chain. Read more about the role of pods in metagovernance and how FireEyes uses pods for metagovernance delegation here.

Gimme the pods

Have we pod-pilled you yet? If you read this article and thought “yes, we need pods in our DAO”, you’re in luck! We’re slowly opening our private beta and are onboarding DAOs that we think are a good fit for pods.

For context, we define a “good fit” as:

  1. An organization that knows what it wants from an organizational design perspective
  2. Can benefit from flexibility and permissions offered by pods
  3. Driven stakeholders that understand their organization deeply

If this sounds like you, flag your interest here and we’ll be in touch.

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