What Is Moloch DAO? Funding Public Goods in the Ethereum Ecosystem

Part product of biblical lore and part collection of enthusiastic Ethereum experts, Moloch DAO is all about creating a better future.

In its three-year existence, Moloch DAO has funded dozens of projects and helped power hundreds of other decentralized autonomous organizations in the Ethereum ecosystem.

In a space where the narrative is all too often about short-term, individual gains, Moloch DAO has its sights set on a longer time horizon by funding digital public infrastructure—starting with Ethereum—and igniting collective action around blockchain development.  

What is Moloch DAO? 

Moloch DAO is a decentralized autonomous organization that funds projects aiming to improve and drive forward the Ethereum ecosystem. The group has 70 members that control over $5 million in funds (at the time of writing). It is up to the members to determine which projects receive funding.

Moloch DAO sees blockchain technology as a public good. That is—like roads, clean air, and public broadcasting—blockchain technology is something everyone can benefit from and should have equal access to. 

Managing and developing public goods has never been something humans excel at, illustrated by the tragedy of the commons. In short, everyone has an incentive to use public goods, leading to overuse and the degradation of resources. Our shortcomings with public goods management fundamentally comes down to coordination failure and incentive misalignment.

Moloch DAO’s creators astutely recognized this age-old story playing out in the blockchain space, particularly with respect to Ethereum 2.0 development. In 2019, they set out to create an organization and technology to promote coordination in service of Ethereum 2.0 development, so as to provide the most value to the most people. 

Similar to how Bitcoin is the network on which BTC the cryptocurrency is built, Moloch is the technological framework on which Moloch DAO is built. This is an important distinction so it’s worth taking some time to explain in more detail.

What is Moloch?

Moloch is the name of a devious biblical deity who preyed upon humans’ poor abilities to coordinate in service of the greater collective good. Moloch offers illusions of prosperity and gain at the expense of irrational and unnecessary sacrifice and suffering.

Within the context of Moloch DAO, Moloch is a DAO framework. That is, it is a set of smart contracts coded with rules that help facilitate human coordination on the blockchain. Naming the framework “Moloch” is a bit tongue-in-cheek; it is not a celebration of the deity. Instead, it is an acknowledgement that, despite humans’ advancements since biblical times, Moloch persists as a force with which we must reckon. 

How does Moloch DAO work?

There are at least three perspectives from which to understand Moloch DAO: the technology, its membership, and grant recipients.

From the technology perspective, Moloch DAO exists as the Moloch framework written onto the Ethereum blockchain. It is a set of rules and actions represented as code, executed based on specific and pre-defined criteria. (Moloch DAO was a trailblazer from this perspective, so more on that in the next section.)

Moloch DAO’s members choose which projects to fund. Members’ right to decide which projects to fund is represented by their respective shares: non-transferable pro-rata claims on the underlying funds locked in Moloch DAO’s treasury. (For more on shares and how to become a Moloch DAO member, check out the Moloch DAO Handbook.)

Anyone is eligible to apply for grants. Moloch DAO holds three grant rounds each year, April-May, August-September and December-January, typically distributing at least $1 million in total. Grants fund an array of projects in the Ethereum ecosystem, from tooling to research to education. (Check out the grant proposal flow for a more detailed look at the grant process.)

What’s so special about Moloch DAO?: 

In the crypto space, where so much development and activity is driven toward individual gains, Moloch DAO separates itself as an organization designed to promote the common good. However, its special characteristics extend beyond altruism. 

One distinguishing feature of Moloch DAO is its elegant simplicity. Guided by the idea of a “minimum viable DAO” since inception, Moloch DAO’s goal was to put only the absolute minimum necessary functionality on-chain using the Moloch framework. 

This simplicity promotes security because less code means things break less often and it’s easier to fix when they do. It enhances usability because it is easy to use and understand what’s going on under the proverbial hood. It also makes the framework more extensible in order to meet a variety of use cases and evolving needs.

Perhaps the most distinguishing aspect of Moloch DAO is its “Ragequit” feature. Ragequit gives members the freedom to withdraw their funds should they disagree with the result of a vote. This mechanism is written directly into the code, drastically reducing coordination constraints around voicing dissent and allowing members access to their underlying claims without being bound to futile politics and persuasion.

For example, suppose Alexander the Great is a Moloch DAO member with 10 shares. He is also the king of Macedon, a hub for top Ethereum developer talent. Despite Alexander’s noblest efforts to persuade members to vote “no,” a proposal to incentivize developers to move from Macedon to Arabia passes. Instead of having to fund a grant he disagrees with, Alexander chooses Ragequit, effectively cashing in his 10 shares for their underlying value.

What types of projects does Moloch DAO fund? 

Moloch DAO has distributed nearly $1.4M in grants since 2019. Grant recipients range in categories from tooling to research to DAO-building to education. Here is a full list with Moloch DAO’s grant history. Below is a select list of grant recipients:

• ? DeathGuild ($26,650): The brain child of Tyler Wyche, “DeathGuild is an attempt to create a dedicated research initiative that focuses on the research itself, on the cerebral architecture of the DAO itself, and to do that in a philosophical and artistic manner.”
• ? Ethereum Cat Herders ($10,000): The Cat Herders promote Ethereum ecosystem and community development through decentralized project management, team coordination, and information dissemination projects.
• ? Flashbots ($100,000): This is a research and development organization concerned with miner-extractable value (MEV) and the risks to smart-contract blockchains.
• ? ReallyBoringGuild ($56,400): The guild is a Moloch DAO working group, similar to a department in a traditional company, primarily focused on Moloch DAO operations and day-to-day procedures such as marketing, public relations, branding, member meetings, and website maintenance.
• ?️ Sybil Resistance ($100,000): This provides bounties that promote the security of on-chain identity systems Proof of Humanity and BrightID.
• Ξ The State of Ethereum 2.0 ($3,000): The grant went toward producing a 2019 research report that took a deep dive into the, you guessed it, state of Ethereum 2.0 at the time.
• ?? Umbra Protocol ($100,000): Umbra is a privacy-focused protocol for simple stealth payments on Ethereum.

The future of Moloch DAO

Since its inception in 2019, the Moloch framework has been used to create nearly 750 DAOs, including some big name DAOs like The LAO and MetaCartel. During that time, the Moloch DAO team has upgraded the framework twice, with the most recent V3, referred to as “Baal”, launched at ETHDenver in February 2022.

These upgrades are a response to the ever-evolving needs and use cases of DAOs, including those of Moloch DAO itself. The pace of innovation shows no signs of slowing down. As a leader in the space, we will likely see Moloch DAO continue to improve its framework in the years to come.

Given the funds, Moloch DAO hopes to continue enabling important and cutting edge projects that push the ecosystem forward and solve coordination problems. If it works, Moloch DAO will continue to wield the sword that is the Moloch framework in order to slay Moloch the deity.

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