subDAO Index Improvement Proposals (IIP) Process

Author : @sixtykeys @shawn16400
Reviewers : @mel.eth,
Purpose : Information and feedback


In relation to the use and creation of subDAOs, The Index Coop Council stated " The Council has decided that it is important to put specific definitions to the various entities within the Index Coop. The council would like to delegate this responsibility to Governance"

Following those instruction, the Governance Team researched, outlined, and presented for feedback the findings on how the creation of subDAOs would compare with our current Nest and Pod structure. The summary of this information is captured in this slidedeck and a recording of this session is captured here.

Additionally, the Governance team met with representatives from the ICC to outline the findings and to review a outline of an IIP proposal template - building a pathway to the creation of subDAOs, which can be found on slide.

As an output to those discussions, the Governance Team proposes the following IIP template as a guideline for the proposal and creation of a subDAO within the Index Coop.

To note, this IIP template have been designed to fold into the existing Index Improvement Proposals (IIP) Process, following that end to end process.

subDAO IIP Template:

IIP Number: [to be assigned]
Title: [Form a (insert name here) subDAO]
Status: [Discussion → Proposed]
Author(s): [a list of author(s) names, usernames]
Created: [date created on]


Simply describe what problem the subDAO hopes to solve for the Index Coop, or the incremental value the subDAO intends to create. Use this section to give a brief non-technical overview that can be understood by the casual community member.

Mission / Motivation

Problem / Opportunity statement:
This section should describe the reason for creating the subDAO. Important points to highlight here include what quantifiable problem the proposed subDAO seeks to solve. An example might look like “the subDAO will reduce the pod budget by 50% within one season”. Alternatively, what quantifiable value will the subDAO create? An example might include “the subDAO intends to generate $40K in excess revenue within 12 months of creation. This section should include the initial KPI / OKRs the community can use to evaluate the subDAO

Community members should be able to evaluate this section critically and question general statements that will be difficult to evaluate, for example, a statement like “this subDAO will be faster and more efficient that the Nest model”. That sounds good, but given the subDAO is evaluated each season, how will “faster and more efficient be evaluated?”. A better example might be “this subDAO will bring products to market 20% faster than the Nest structure as measured from IIP approval to product launch - which is today xyz days / weeks / months”. To be fair, some OKR/KPIs may be best-guess estimates for a new business model or service.

Services and Responsibilities:
If the subDAO is expected to provide some form of services to the superDAO (Index Coop DAO) or take on the responsibility of running a specified functional area of the superDAO. This part of the proposal should be used to clearly describe the services and responsibilities that the subDAO will provide (e.g accountability & reporting). This is what will be done if the IIP passes, not why it should be done or how it will be done.

Community members should evaluate this section by looking for concrete deliverables that can be evaluated. A good example might look like “the subDAO will deliver monthly financial reports at the same level of quality as being delivered today, but on a bi-monthly basis”. A weaker example might look like “the subDAO will provide financial insights on a regular basis”. Think in the context of “in six months, how can a contributor evaluate if this subDAO delivered on its promise”.

External Services:
Is the subDAO intending to work externally by providing services to other organizations? If yes, what services will be offered, how will those services be marketed, and what is the rough timeline for offering those services? Will offering those services conflict with services offered to the Index Coop? If external services cause mutually exclusive choices, how will those decisions be made? In the proposers view, is there a potential for a conflict of interest? How should those be addressed and how would future conflict of interest cases be evaluated and managed?

If successful, how does the subDAO intend to share revenue with the superDAO? What would be the proposed split or revenue sharing model and what would be the potential profit targets where revenue sharing might be initiated.

Requirements and Funding

It is expected that the subDAO will have some requirements from the superDAO. In order to ensure alignment between the subDAO and the superDAO, clearly communicate the services, tooling, human capital, and funding that will be required from the superDAO.

Services include but are not limited to the various functions contained with the Nests and Pods of the Index Coop such as marketing / promotion, design, delegation, engineering, accounting, financial reporting, payroll, expense reimbursement, recruitment, governance infrastructure, etc.

Tooling includes but is not limited to access / membership of any of the Index Coop’s technology and organizational stack, such as Notion, Discord, Dune Analytics, Discourse (Governance Forum), Google Suite, Snapshot, Twitter, YouTube, etc.

Human Capital in this context refers to the use of retained Index Coop contributors who will assist the subDAO. It is helpful to be upfront about how the subDAO is expected to utilize talent from the superDAO. Think about and highlight any contributor who will spend part of their time on the subDAO - (sCoop writers for example). This could include a rough time commitment, and if needed (or known) how this will affect their existing work at the superDAO.

Funding is simply how much the Index Coop is requested to pay for the services that the subDAO will provide, and can include budget detail. The request for funding will ideally follow the standard budgeting / planning cycle of the superDAO. This section should address if the subDAO is expecting to create / maintain a multisig. Funding requests should include currency denominations as well (INDEX, vs., USDC).

Community members should evaluate this section in terms of clarity and completeness of the plan, as well as the difficulty of the work ahead for the subDAO. Pay attention to the services the subDAO will need as well as superDAO contributors who will need to support the subDAO. In relation to the budget, is the proposal going to be cost accretive, cost neutral, or cost reductive to the existing spend?

subDAO Team / Personnel:
The subDAO can present a list of roles the subDAO intends to staff and at what capacity (Full Time / Part Time). If funding is expected from the superDAO, it’s helpful to provide funding details for each role inclusive of ancillary expenses / income (DSM allocation, bonus, travel budget, etc.)

The leadership structure of the subDAO should also be highlighted i.e will there be a “leader” of the subDAO? Leadership can take any form or none at all, but a clear DRI is expected to be put forth to ensure clear communication between the subDAO and the superDAO. A Index Coop relationship touch point from the superDAO should also be proposed by the subDAO to ensure consistent communication with the superDAO. The contact could be an existing Nest Lead, or ICC member - with thoughts into how changes might be addressed when people / roles change.

In relation to the roles the subDAO intends to staff, it’s may be helpful to provide funding details for each role inclusive of ancillary expenses / income (DSM allocation, bonus, travel budget, etc.)

Grant period and renewal process:
The ingoing position is that this process follows the standard Index Coop planning cycle, currently outlined by seasons. This being the case, the base expectation is that request are placed for following seasons, with renewals / updates proposed with each successive season. If this is process would be changed (annual funding, ongoing funding), a clarification as to why this might make sense would go here. Otherwise - each season there would be an update to the proposal with a request for additional funding or update to revenue sharing model.

Does the subDAO intend on having its own token in the future? If yes, what is a proposed timeline and what might be the basic mechanics? As the timeline moves closer, the details on the creation and linkage back to the INDEX token will need to be clarified

Decision Making / Multisig Structure

Decision scope
Linking to the section above, depending on the leadership structure, how will the subDAO make important decisions? What decisions will the subDAO make? What decisions are out of scope for the subDAO? How will the subDAO pass decisions over to the superDAO? If a decision rights need to be clarified, how will that happen between the superDAO and the subDAO?

If the subDAO will have a multisig, to either hold any requested funds or carry out subDAO operations, who will be on the multi-sig? Who will be able to change the multi-sig assignments, and what is the proposed process for changing the multi-sig? Will the superDAO have a say in who is on the multi sig? Will the subDAO need a superDAO sign off for spend over a specific threshold?

Transition & Discrepancies Plan

Is the subDAO being formed currently a Nest or Pod of the Index Coop DAO? What is the transition plan from the current state to a subDAO? What components will change, what components may stay the same? How much time is required to make the transition? Will all of the services be available on day 1 or will there need to be a transition plan.

In case of Death or Divorce:
It is intended for subDAOs to be proposed / approved on a seasonal basis. In the case that a successive season is not approved - and the subDAO is ejected or dissolved, if the subDAO provides necessary services to the superDAO - what might be required to unwind the relationship or port capabilities back over to the superDAO? In rough terms, how would this process work and what might be some of the risks or issues associated with moving the work back into the DAO?

For community members - if the subDAO is providing a necessary service to the superDAO - if the relationship goes wrong, how will the superDAO rebuild or reabsorb capabilities to ensure ongoing operations of the Index Coop? Does the IC have the ability to rebuild the capability? Is there an outside service provider that could be asked to step in and replace the subDAO? We all hope for an amicable relationship, but putting some thought into how a subDAO may be adding risk to the organization is prudent.

For assistance with this IIP process:
Operational Governance Coordinator: @sixtykeys (discord)
Governance Nest Coordinator: @mel.eth#0001 (discord)
Governance Nest communications: @shawn16400 #0001 (discord)


For anyone interested in exploring the subDAO concept further -
here are five tools to help you along the way:

subDAO background info:

  • subDAO deep dive (link)
  • Community discussion (link)

How to initate a subDAO within the Index Coop:

  • How to propose a subDAO (link)
  • IIP subDAO template (link)
  • IIP subDAO sample (link)

If you have any questions about the subDAO or the process, please reach out and the Governance team will be happy to help.