Decentralized Consensus on Impact

The Impact Oracle DAO is a democratic online forum of stakeholders to form consensus on impact. It will be a platform to engage in discussions about definitions for externalities, which externalities are relevant, what are their costs, how they are accounted for, etc.

Consensus building around externalities means that the DAO creates an approximation for the costs of all relevant impact. This will be updated over generations and according to new knowledge and viewpoints as time goes on.

The stakeholders of the DAO will be literal stakeholders of tokens. Staking tokens allows people to vote. Tokens staked get governance tokens in return. To control the balance of power afforded by governance tokens, voting is based on a quadratic voting mechanism that limit “whale” power to manipulate the system. Also, to ensure sybil resellience, wallets are KYC verified.

Due to the fact that not all stakeholders will be active voters, and not all stakeholders will be educated or opinionated on all matters, a system of delegation and stewardship will be implemented. A stewardship and delegation system allows token holders to delegate their tokens to larger pools to affect policy around externalities. Voting, confirmation and delibaration will be discussed later in this document.

The DAO’s purpose is to create and maintain a unified, evolving, ad-hoc set of metrics for defining and pricing impact. The DAO’s structure, decision making and metrics are transparent and accounted for on a public ledger. The ledger will catalog and price all environmental and social impact.

The power, value, and credibility of the metrics are derived from the transparency and wide consensus mentioned above. A system that is backed by consensus gains credibility and imbues value into the pricing of externalities. This evolving, living, standard allows engagement and dialogue between stakeholders and would make a transparent and comparable system of metrics that foster accountability. This will annul the need for a multiplicity of acronyms, ratings, and metrics attended by a plethora of companies and agencies, amounting to high costs and inefficiencies.

Founding the DAO and establishing the IO

Impact Oracle will be founded as an LLC that has no governance power over the DAO’s decision-making. The LLC will simply be a legal entity that enforces decisions made by the DAO. The DAO itself will begin as a movement, inviting all to join. A founding board will be chosen democratically early in the process. The founding board is meant to oversee the founding of the DAO and will either dissolve completely or become role holders in the DAO once the IO is operational.

Initial members of the DAO will be diverse and will receive tokens either through staking mechanisms, or airdrops. Members of the DAO will always be able to democratically amend or completely change governance structures, roles, and decision-making processes.

A process of airdropping initial tokens will create an initial supply for multiple stakeholder groups. This is to ensure representation of the most vulnerable of stakeholders, and the largest groups that currently account for, and measure, impact. By design, the majority of initial token holders will not be large institutions and a concerted effort will be put forth to vary the stakeholders’ groups in terms of opinion, geography, background, and power.

The initial principles laid out in this document will show how improvements, amendments, and suggestions are accepted and voted on by the DAO. As mentioned before, these principles can be amended.

Before the IO will be fully operational, a period of deliberation will mark the beginning of DAO operations. The DAO will create “Founding Suggestions” that will encompass a set amount of metrics and prices defined by the DAO as a starting point. Once the Founding Suggestions are published, ratified, and adopted by the DAO, those suggestions become the “Genesis Block” for the IO taxonomy. Smart contracts will be introduced at a later stage after the IO has established credibility and reliability.

Industry Forums

Pricing impact is a complex challenge, as demonstrated by Prof. George Serafeim at HBS. Serafeim is on a mission to “drive the creation of financial accounts that reflect a company’s financial, social, and environmental performance... Create accounting statements that transparently capture external impacts in a way that drives investor and managerial decision making.” This essentially means, putting a dollar figure next to externalities and publishing that data just like a financial statement.

This requires rigor and industry-specific accounting. CO2 emissions in one place or by one industry may be easier to curtail than in the next. To create a centralized and complete directory would be near impossible. However, if there are clear guidelines as to how we can create metrics, and every industry will have its own forum to discuss said metrics, this is a much more manageable endeavor.