New DAOs are coming online at an incredibly fast pace, across Solana, Ethereum, Celo, Gnosis, Cosmos, and more. These organizations are rapidly pushing the boundaries of coordination, contribution, verification, and what it means to be in community on the internet. In addition, many of these nascent crypto-networks aim to broadly finance ecosystem growth through their own protocol-level DAO treasuries.

Following four years of rapid growth, DAO treasuries hold crypto-assets worth $10.3 billion, with $8.2 billion on Ethereum and $1.3 billion on Solana alone. As a result of this growth, new DAOs, subDAOs, and working groups are constantly spinning out as missions change and new opportunities arise that DAO contributors want to tackle.

Across the web3 landscape, DAO contributors are streaming in at a frenetic pace, leading to capital inflows, new protocols and products, and unparalleled innovation in the organizational structures of work.  This immense, rapid growth also comes with the tradeoff of serious growing pains with coordination, process, scaling, and more. Previous thought leaders have argued that DAOs need to aggressively spend on R&D to grow, and treasuries need to be diversified to augment DAO resilience in the face of market downturns.

In general, focusing on what a DAO should do is difficult; the landscape is full of opportunities that distract teams from executing and growing their DAO. We argue that most DAOs need to tighten their objectives and narrow their niche, as decentrally coordinating at scale with a shifting, broad mission is impossible for the vast majority. The time has arrived for the next stage of DAO-to-DAO (D2D) coordination, where DAOs address their growing pains by exchanging and trading with each other, co-funding those initiatives that drive mutual prosperity according to their respective comparative advantage.

And that’s why we built Prime Deals.

The Potential of Deals: A D2D Case Study

At PrimeDAO, we thought hard about our mission and why we exist. Of course all DAOs want their token to increase in value, but for us, our D2D token represents the future of what we want to see in the DAO ecosystem—DAOs creating abundance through exchange. More precisely, we want to see DAOs forming their own ecosystems by spinning out from other DAOs, establishing and tracking mutual obligations according to shared roadmaps and milestones. We want to see a thriving, cooperative, and networked DAO ecosystem that can coordinate and sustain itself.

To do this, DAOs will need to pool funds to work on shared outcomes together, and divert capital to common use cases yet to be imagined.

What would that actually look like?

Let’s focus on an example.

When to Partner: The Celo 🤝 Prime 🤝 Symmetric Case

DAOs have some common growing pains—they have a lot of money, they’re spending it slowly on R&D and growth, and their treasuries are poorly diversified.

It’s hard for them to scale organizationally, with many DAO contributors facing burnout. This makes it hard for them to build. In addition, the service DAOs out there are low in number and high in demand. People are booked out a year in advance or more.

We at Prime ran into this very situation recently. We spied an opportunity in Celo and Gnosis, two quickly growing and values-aligned ecosystems with rapidly scaling DAOs. Teams from these ecosystems started to reach out to us through our networks, looking to launch their tokens. Building our product out to these ecosystems presents a two-sided problem. We need to make sure we get enough DAOplomats interested in the product in order to build it, but we need to build it in order to get the DAOplomats.

We can’t do everything, we don’t have enough people, service DAOs are booked up. But, if we scale too quickly and add contributors, that takes time we may not have, and we might burn our treasury just as quickly before we find a sustainable model for the DAO. Wat do?

DAO2DAO coordination through token swaps

When we launched our own token in December 2021, we coordinated with OlympusDAO, GitcoinDAO, and BalancerDAO as key partners for our LBP, specifically because we feel deeply aligned with them on values. We often collaborate with these DAOs on processes and best practices (Gitcoin), technology (Balancer Friendly Fork), or connecting new DAOs with funding and community (Olympus).

Cementing these workflows by swapping tokens was a way to assure our mutual upside.

Which brings us to Prime Deals and DAO2DAO in practice.

We met the Symmetric team towards the end of 2021, as we were exploring building a Balancer fork onto Celo with our partners at Celo.  They had built a vibrant project in the Celo and Gnosis ecosystem already, providing users with a DEX and AMM, and they had been in discussions with many grant programs at the time, mostly bootstrapped the platform, and were in discussions to be a Friendly Fork of Balancer on Celo.

At that point we at Prime had a number of options: we could build a competing product, and potentially invest time and resources into a losing play, or we could coordinate.

We chose coordination.

Symmetric had great technology, we had existing technology on mainnet, and a strong community that can get behind top projects, bringing them utility, value, and market feedback. This became our third way - instead of creative destruction, both DAOs chose mutual cooperation and abundance.

Celo, as the provider of an L1 blockchain, also benefits, as they can now focus on the best possible EVM-based layer 1 offering to support projects launching on Celo through Prime Launch and Symmetric’s partnership. This enables their developer relations to focus their full attention on developer needs and allow folks like Prime and Symmetric to provide complementary infrastructure. These are the win-win-win scenarios we all look for!

The only problem was that this took months to do. Hopping from one discord server to another, from one telegram chat to another, reviewing a partnership agreement with distributed parties across time zones. It was hectic!

Conclusion—What is the Future of DAO2DAO Coordination?

What if there was a way for us to coordinate this through one interface for all parties?

What if you didn’t quite know who could meet your needs out there for a partnership, and wanted to let DAOs across all ecosystems know what you’re looking for in a deal?

What if you could protect all parties with pre-defined, on-chain deal parameters and contracts?

What kind of Deals would you make?

Stay tuned as we dive into the real world practice of DAO2DAO coordination as we’ve practiced it for the last few years. We’re excited to bring our experiences to you in the form of a product that will help all DAOs evolve and scale in the next stage of our networked evolution.

Are you a DAOplomat looking to network with other DAOs using Prime Deals?

Then step right this way, register your interest here. We’ll send a random sample of the first few submissions a nice perk 😉, and of course, we appreciate you for growing the network of DAO2DAO cooperation.

Special thanks to Patrick Rawson for reviews and edits of this piece.