The Origami DAO Framework (Preview)

Note: This blog post shows the first few pages of the Origami Framework.

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The Origami Framework

While DAOs have been around since 2016, the practice of creating, growing, and successfully navigating a DAO continues to evolve at a rapid pace.

The team behind Origami, Inc. helps design, write, and support the Origami DAO Framework (the “Framework”). The Framework is an alternative to the Moloch DAO and Investment Club-like structures. Unlike these structures, the Origami Framework is a comprehensive method for creating and running DAOs that can benefit from the upside of venture capital, outside investors, and other investing strategies without requiring DAO members to make investments, be accredited, or take on personal risk. It also allows DAOs to scale past the 100 member limitations imposed on investment clubs.

The Origami Framework has been battle-tested by several well-known DAOs — including Orange DAO, VC3 DAO, Constellation DAO and others.

The Framework began as an operating agreement written by Ben Huh in the summer of 2021 for Crisis DAO. It was released under CC0 and subsequently updated, and went through a major revision for use by Orange DAO in October of 2021 by the founders of the Orange DAO. The Origami, Inc. team, who are also genesis members of Orange DAO, continues to be the stewards of this Framework by incorporating feedback from a wide variety of stakeholders and issuing periodic updates to the Charter and other systems within the Framework.

The Framework draws inspiration from many sources including: the United States Constitution for its separation of powers and tri-branch organization, Plato’s Republic for its belief in elected representatives, and the Operating Agreements of limited liability companies. The Framework uses these inspirations to enable its DAOs to pursue progressive decentralization and empower autonomy for its teams and small groups of members.

The Origami Framework Definition

The Origami Framework is an adaptable and living set of documents, processes, know-how, and software that work together to enable the most scalable and flexible DAOs.

DAO Problems and Solutions

The Origami Framework uses one or more series of investment company entities that are already well-established and well-supported to make the investment fund compliant and efficient to use. The Framework also offers a menu of investing entity options and various ways to support their unique features, such as a rolling fund, or a series of SPVs. These investment company entities make it easier to raise capital by using existing investment products and advisory firms. (Figure 1)

The Framework sets out to solve several problems faced by DAOs today.

  1. Little to no best practices for core teams.

  2. Difficulty raising outside capital.

  3. Scaling membership to beyond 100.

  4. Minimize the time and onboarding required to be a valued contributor to a DAO.

  5. Creating long-term trust between members.

  6. Support “private social networks” on-chain.

  7. Help DAOs focus on their unique talents and launch faster.

Solutions

1. Documented Best Practices

Underpinning the Origami Framework are the experiences the team behind Origami have learned hands-on while helping build Orange DAO, Crisis DAO, Constellation DAO, etc. There are plenty of tutorials around the tools and knowledge required to be effective in a DAO, however, it remains difficult to put all those moving pieces together to make DAO operations efficient.

The best way to learn how to grow a DAO is by watching and trying successful ideas from the community. The DAOs that use the Origami Framework are able to learn from the successes and mistakes of our peers faster because we share similar systems and are actively pushing lessons to the community.

The beginning of the Framework’s playbook starts with the Origami Framework Charter template. The Origami, Inc. team communicates these lessons and best practices through their community spaces or via regular communications with members.

2. Ability to Raise Outside Capital

Thanks to progressive governments on DAO structuring — like Wyoming’s DAO LLC law — DAOs today enjoy the legal right to exist in the US and abroad. However, there is a lot more to the law to raise funds and invest as a DAO. In order to comply with being an investment company, many DAOs take on the structure of an investment club (limited to 99 members but cannot hire a manager) or a US-based LLC with some significant compliance costs. These direct, simple structures work well with a small group of friends, but they can’t be used to raise millions of dollars of outside investor capital. 

The Origami Framework uses one or more series of investment company entities that are already well-established and well-supported to make the investment fund compliant and efficient to use. The Framework also offers a menu of investing entity options and various ways to support their unique features, such as a rolling fund, or a series of SPVs. These investment company entities make it easier to raise capital by using existing investment products and advisory firms. (Figure 1)

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Figure 1: DAO and partner relationships.

3. Scalable DAO Membership

By law, DAOs following the Investment Club structure must not exceed 100 members. For Moloch-framework DAOs, the difficulty occurs if the DAO wants to add non-investor members. 

The Origami Framework bypasses this limit by separating the fund — the legal entity responsible for the investing decisions — as an arms-length partner from the DAO. Therefore, in the Framework, the DAO is an operating entity, far more flexible, and capable of doing a lot more than just investing with the added benefit of not being subject to the same regulatory requirements as a fund.

But finding the right legal structure to use for your DAO is just the first step to scaling your DAO. Through the software and processes built by Origami, the Framework comes with the software designed to scale to DAOs with tens of thousands members. 

The software behind the Framework reduces onboarding time by providing:

...Continued in the Origami Framework paper.

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