Why Outcome.Finance?
Outcome helps DAOs generate positive outcomes with a special flavor of DAO tooling that leverages an optimistic oracle. Outcome is a suite of DAO governance and treasury tools secured by UMA’s optimistic oracle and includes success tokens and KPI options. This tooling is defi-native, optimistically resolved, and trustless.
Here is why it’s necessary:
Coordination Before Blockchain
To coordinate with someone you don’t trust in the meatspace, you rely on legal contracts with legal enforcement. If things go sideways, you can sue them.
Smart contracts, on the other hand, are enforced as if by a natural law in the digital world. They have become a coordination layer for trustless cooperation. People can rely on smart contracts instead of courts.
When smart contracts work, they work so much better: contracts are enforced deterministically and without any social dependencies.
The lower cost to coordinate means many more things can be built that would have been unfeasible before.
Blockchains allow applications to live on a substrate that their governance does not control, which allows them to effectively implement techniques such as, for example, ensure that every change to the rules only takes effect with a 60 day delay
But... DAOs have their coordination pains
DAOs have made it so groups of people coordinate with each other in new ways. Still, many of them accept trust assumptions based on social rather than smart contracts, and we are suffering because of it.
Yes, it’s easier for DAOs to rely on a multisig and centralized execution, but is that really how we want DAOs working into the future? If there’s a 1% annual risk that a DAO will be rugged then in the long run, all centralized DAOs go to zero.
Here we’d like to summon the words of our friends at Orca Protocol, a team working to help DAOs build “trust pods” within DAOs. As the Orca team notes, the idealistic version of DAOs is that they maintain flat organizations that rely on consensus.
However, anyone that has worked within a DAO in the past year knows this is rarely the case. In reality, many DAOs operate using socialware, relying on documented practices and hoping there is sufficient human attention and coordination to follow these written rules.
DAO’s have yet to bridge the gap between deterministic blockchain consensus and human consensus. The gigabrains at Orca Protocol have introduced a useful spectrum to describe this: “Trustware vs. Socialware”
- Socialware — Mechanisms that create assurances through human relationships, incurring a high social coordination cost
- Trustware — Mechanisms that create assurances through technology, incurring a low social coordination cost
Outcome’s products provide ways to turn socialware into trustware. Let’s explore how.
What the world looks like when smart contracts have data about human actions
Outcome’s thesis is that by putting the results of human actions on-chain, DAOs can better use smart contracts to organize and coordinate those humans. A DAO builder can connect incentives and disincentives to certain off-chain outcomes and motivate humans to behave accordingly.
This thesis has been tested many times with KPI Options. DAOs have created and issued these conditional payout tokens to their members. People received these tokens that paid out at a future date on the basis of outcomes such as these: the quantity of partner integrations, number of retweets, or the quality of a legal document.
These tools are all possible because an optimistic oracle like UMA’s can serve to smart contracts the kind of data associated with human actions and achievements. Because an optimistic oracle offers an opportunity for human verification, data requests can be of the type that humans understand but are very difficult to write into code.
Smart contracts, armed with the ability to process off-chain data, can programmatically enforce decisions around agreements like “mandates” or “charters.”
Making it easier to do it the right way — Optimistic Governance
In the domain of DAO governance, optimistic resolution eases the tradeoff between flexibility and decentralization. The traditional way to move fast and just get started is to put socialware in place with plans to replace it later with trustware.
Instead, DAOs can start out with an optimistic governance stack, soon available from Outcome. Familiar tools like Snapshot and Gnosis Safe still work here, actions are subject to a transparent and public dispute period. This means that anyone can propose an action and anyone can dispute it.
Fledgling DAOs frequently decide to use social agreements in place of trustware agreements. This is not because they are lazy, it is because trustware is hard to build.
Outcome’s tools will let people behave in more complex ways than would previously have been possible while maintaining trustlessness in its governance and asset management. This frees up the DAO to focus on its priorities. DAOs can spend more time building.
Taking those promised increments towards decentralization
We covered new DAOs, but what about established organizations?
Teams that rely on multisigs are borrowing from their legitimacy; and in some cases, they borrow more than they have and they lose public trust.
Sometimes they also lose all the money.
Outcome’s solutions let these projects ease into secure decentralization. They can still even embed a multi-sig veto power that gives the multisig the ability to override token governance.
They can retain a multisig that can take emergency actions that bypass or override optimistic governance. Over time, they can increase the signing threshold for the emergency multisig and eventually dispense with it entirely, becoming fully decentralized and autonomous by only using optimistic governance
Outcome’s Mission, Vision, and Roadmap
Outcome’s mission is to turn socialware into trustware, bringing DAOs the coordination outcomes they seek.
We will achieve this mission in collaboration with partners in the Outcome Gang. These partners see the virtue of optimistic design patterns in DAO tooling and Outcome’s team will focus on integrating with them.
Outcome’s vision is a world where trustware is easy to implement and enforce through the natural, digital law of smart contracts
Roadmap
Outcome.Finance has a robust suite of tools available today, with several others in the works. Outcome.Finance will release some products directly for DAO use, but in cases where projects are already doing it, will seek to join forces instead. (This is where the Outcome Gang comes in — More on that soon.)
Available today:
KPI Options — Conditional payout tokens
Success Tokens — Allows DAOs to fundraise from VCs
Available soon:
Optimistic Governance — Enforce snapshot results
Optimistic Distributor — Conditional token distributions
Perpetual Conditional Rewards Tokens — Streaming rewards w/ Superfluid
Optimistic Rewarder — Personalized conditional token distributions
To become part of the Outcome ecosystem, Check the Outcome.Finance website and follow Outcome on Twitter, then join Outcome’s official Telegram group.
