Valocracy in Cardano DAOs

[GENERAL] Name and surname of main applicant

Priscilla Baeta

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

6

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

Valocracy is a Web3-based framework that redefines DAO governance, offering a fairer, transparent, and more effective system for community interaction and economic participation.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

We currently open all our repositores on web3 development for the solidity and rust contracts, as for any other web3 component on the valocracy experiment.

A community benefits immensely from an open-source technology repository by gaining free access to valuable tools, software, and educational resources. It fosters collaboration, allowing members to contribute, improve, and adapt the technology to local or specific needs. This collective effort accelerates innovation, reduces development costs, and provides transparency. Open-source repositories also offer learning opportunities, helping individuals develop technical skills while strengthening the community through shared knowledge and continuous improvement.

[METADATA] Horizons

DAO

[SOLUTION] Please describe your proposed solution

Valocracy: Revolutionizing DAOs with Web3 Principles

Valocracy is a socio-economic framework built on the ideals of Web3, designed to address the limitations faced by current decentralized organizations (DAOs). By leveraging blockchain technology, Valocracy aims to redefine the way individuals interact within communities, introducing a more effective, transparent, and fair approach to governance and economic participation.

Key Features:

Separation of Governance and Economic Power: In Valocracy, political and economic powers are distinct and independently tokenized. This ensures that governance decisions are based on merit and contributions rather than wealth accumulation, preventing the domination of DAOs by wealthy individuals or entities (often referred to as "whales"). Governance power is granted based on individual contributions and is non-transferable, fostering a more egalitarian and dynamic decision-making process.

Tokenization of Human Effort: Every contribution made to the collective is rewarded with a non-fungible token (NFT) that records and preserves the unique aspects of the effort. This not only immortalizes who did what and when on the blockchain, but also ensures that contributions cannot be diluted or forgotten. Each NFT contains two sub-assets: Tokenized Governance Power (TGP) and Tokenized Economic Power (TEP), reflecting both the governance rights and economic share of the contributor.

Dynamic Governance Model: Governance power in Valocracy is tied to consistent participation. Tokenized Governance Power is subject to a time-based effectiveness curve, where its influence grows as individuals continuously contribute to the collective, and declines when they become inactive. This ensures that active contributors have more decision-making power, while past contributors who are no longer involved see a natural decrease in their governance influence. This dynamic model prevents stagnation and ensures that governance is always aligned with current contributors.

Incentivizing Economic Sustainability: Valocracy uses a "Collective Efficiency" metric, which compares the collective treasury to the overall effort contributed by individuals. This creates a direct incentive for individuals to contribute efficiently, as they benefit from the collective's success through their Tokenized Economic Power. Economic power can be traded in secondary markets, allowing contributors to sell their share of the treasury, but governance power remains tied to individual participation and cannot be sold.

Rarity-Based Effort Evaluation: Not all efforts are equal, and Valocracy accounts for this through a rarity system applied to the tokenized effort. More valuable or scarce contributions receive higher governance and economic rewards, encouraging individuals to contribute in ways that are most beneficial to the collective.

Why Valocracy?

Valocracy is designed to solve the inefficiencies and misaligned incentives found in many DAOs. Traditional DAO structures often replicate the same issues of centralized systems by allowing wealth to translate into governance power. Valocracy counters this by ensuring that governance and economic influence are decoupled, meaning that governance power must be earned through consistent and meaningful contributions, not purchased.

The framework also encourages communities to thrive by rewarding ongoing participation and ensuring that economic rewards are directly tied to the value each individual adds to the collective. With this structure, Valocracy promotes fairness, transparency, and a continuous flow of value within decentralized organizations.

By offering a more structured and thoughtful approach to DAOs, Valocracy positions itself as a next-generation framework that is not only democratic but also efficient and scalable.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

The positive impact of Valocracy on the Cardano community is significant and multi-faceted:

1. Enhanced Decentralization with Fair Governance: Valocracy introduces a more nuanced and democratic approach to decentralization, separating governance and economic power. This aligns with Cardano's vision of decentralized governance, where the community has a stronger voice in decision-making. By ensuring that governance power is earned through meaningful contributions rather than bought, Valocracy fosters a fairer and more meritocratic ecosystem within the Cardano network.
2. Incentivized Participation and Growth: Through the tokenization of individual effort, Valocracy encourages continuous and meaningful contributions to the Cardano ecosystem. Contributors are rewarded with tokenized governance and economic power, motivating them to stay engaged and invest in the long-term success of the community. This incentivized model drives active participation and strengthens the overall health of Cardano's decentralized governance model.
3. Sustainable Economic Model: Valocracy’s system promotes economic sustainability by linking rewards to the value generated by individuals within the collective. This aligns with Cardano’s mission of fostering a more inclusive and financially sustainable system, ensuring that contributors are recognized for their unique contributions and that wealth is distributed based on merit rather than centralization of resources.
4. Transparent and Immutable Records: With the tokenization of contributions as NFTs, Valocracy preserves the history of community efforts on the blockchain, creating a transparent and immutable record of who did what and when. This builds trust within the Cardano community, ensuring that contributions are permanently recognized, which enhances accountability and long-term collaboration.
5. Alignment with Cardano’s Long-Term Vision: Valocracy’s principles of fairness, transparency, and innovation in governance and economic models are well-aligned with Cardano’s broader goals. By promoting innovation in decentralized organizations (DAOs), Valocracy can act as a powerful tool for fostering new forms of digital communities and governance structures on the Cardano blockchain.

In summary, Valocracy will strengthen Cardano by driving deeper community engagement, ensuring fair governance, and promoting economic sustainability, all while upholding the core values of decentralization and transparency that Cardano stands for.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Based on my extensive background as an academic researcher with over 20 years of experience in software architecture and my established reputation in the crypto space, I have a strong capacity to deliver my project with high levels of confidence and responsibility. My academic credentials, including a Master’s thesis in Computational Systems at IME/RJ, provide a solid foundation for technical rigor and analytical thinking. Since 2021, I have been actively involved in the crypto world, building a community of over 500 members who follow and appreciate my weekly deep-dive studies. This has positioned me as one of the most respected technical authorities in the Brazilian crypto landscape.

My approach to delivering the project is grounded in methodical research and deep technical analysis. I consistently apply both fundamental analysis and technical appreciation in my studies, ensuring that each aspect of the project is thoroughly explored and validated before moving forward. This dedication to in-depth analysis guarantees that the content I produce is insightful, instructive, and thought-provoking, as evidenced by the positive reception from my community.

Validating the Viability of the Approach:

To validate the viability of my approach, I intend to implement several strategies:

1. Pilot Studies: Tests have already been conducted within my closed community of over 500 Web3 users, and I have also tested Valocracy for Moonbeam with Moonvilla. I will conduct the necessary tests to ensure that the Cardano ecosystem can also benefit from the improvements in the DAO system.
2. Community Engagement: By leveraging my established community of crypto enthusiasts and experts, I can gather valuable input, test hypotheses, and refine the project based on real-world use cases and scenarios. This participatory approach ensures that the project aligns with actual market needs and behaviors.
3. Data-Driven Iteration: I will utilize data-driven insights to continuously assess the project’s performance. Key metrics such as engagement levels, adoption rates, and community feedback will guide iterative improvements, allowing for rapid adaptation and enhancement of the project’s framework.
4. Technical Reviews and Peer Collaboration: Regular peer reviews from respected members of the crypto community, as well as collaboration with other experts in blockchain and Web3 technologies, will help validate the technical robustness of the project and its overall approach.
5. Monkey Branch – Web2 & Web3 Software House - Founded in 2019, Monkey Branch is a pioneering software house that specializes in Web2 and Web3 technologies. Partnering with key Web3 communities, the company is committed to building a collaborative future through responsible blockchain use and developing innovative solutions. The Web3 team at Monkey Branch includes full-stack developers Israel, Leonidas, and Marlon, led by tech lead Lucas Schmidt. This talented team has been instrumental in working on Valocracy, a major project that is currently the company’s main focus. Through their combined efforts, Monkey Branch is pushing the boundaries of digital transformation with advanced, scalable blockchain solutions.

Through these measures, I can confidently deliver the project with the highest levels of integrity while ensuring that it remains viable, scalable, and aligned with the broader goals of decentralization and community empowerment.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Stage 1 - Technical Studies (2 months)

• Development:
• Deep dive into the technical aspects of Cardano smart contract development.
• Study Plutus and Haskell, focusing on Cardano-specific functionalities.
• Leverage existing knowledge of Solidity (EVM) and Rust (Solana) to transition to Cardano’s environment.

• Deliverable:
• Comprehensive documentation of the team's understanding of Cardano smart contracts.
• Basic prototypes and example contracts on Cardano testnets.

Stage 2 - Development of Economic Aspects (2 months)

• Development:
• Design and implement the economic structure of a Valocracy in Cardano.
• Create economic NFTs for participation and contribution tracking.
• Develop the treasury contract that allows users to claim or forfeit economic shares in Valocracy communities.

• Deliverable:
• Smart contracts for the economic framework (NFT issuance, treasury management).
• Initial deployment on Cardano testnet for internal testing.

Stage 3 - Development of Governance Aspects (2 months)

• Development:
• Build governance infrastructure, including governance NFTs.
• Implement pooling and voting mechanisms, ensuring secure and decentralized decision-making.

• Deliverable:
• Smart contracts for governance (NFT-based voting, polling).
• Governance system deployed on Cardano testnet.

Stage 4 - Tests and Quality Assurance (2 months)

• Development:
• Conduct community testing with broader Cardano members.
• Gather feedback and improve the system for scalability and user adoption.
• Implement fixes and optimize contracts for mainnet deployment.

• Deliverable:
• Fully tested Valocracy system with both economic and governance functionalities.
• Final version ready for mainnet deployment.
• Community-driven documentation for Valocracy setup on Cardano.

[RESOURCES] Who is in the project team and what are their roles?

Rafael Castaneda - Operacional Coordinator - https://www.linkedin.com/in/rafael-castaneda-66776829/

Cryptologist and Techno-philosopher; Castaneda graduated with a Master's degree in Systems and Computing from IME-RJ and has more than 20 years of experience as a software engineer, technical leader, and teacher/researcher at various educational levels. He dedicated 15 years of service to the public sector as a tenured professor at CEFET/RJ, where he published more than 30 papers and supervised several student projects.

His crypto journey began in 2021, since then, he has been active in the market as a crypto asset analyst and content producer in the form of videos, news, articles, reports, podcasts, and workshops. Today, besides offering consultancy in the sector, he founded his own channel "Casta Crypto," where he works on a new way to understand the blockchain phenomenon, by integrating crypto technology with philosophical, sociological, and economic concepts.

Antônio Marcelo - Technical Coordinator - https://www.linkedin.com/in/antfonseca/

CEO of Código Brazuca and Node Hub Web3. He has been working with Linux since 1996, focusing on infrastructure and education. He is the author of approximately 11 books on Linux, Apache, Linux Security, Squid, Postfix, and System Administration in Brazil. He worked in information security from 1999 to 2006.

He has been involved in various web3 projects since 2022, serving as an advisor on metaverse projects, tokenization, and setting up infrastructure for Blockchain. He ran two nodes for 10 months on Kusama and Polkadot. He is a speaker and biz dev at the Blockchain Festival.

He is responsible for Código Brazuca, an education project that has been operating since 2021, training developers and devops in web3 technologies. He is currently an ambassador for CESS (a project based on Polkadot technology) and Akash Insider project from Cosmos Ecosystem.

Priscilla Baeta - Research Team Leader - https://www.linkedin.com/in/priscillabaeta/

COO of Código Brazuca, COO of Node Hub Web3 and a project development specialist. She has worked in project development, education, and research for over 10 years for YouTube Brazil and Ubisoft (in various game franchises such as Assassin's Creed, Watch Dogs, and Tom Clancy). She has been giving lectures and classes on the Web 3 and Blockchain market since 2021.

She is the lead Voxel artist and research manager for Arcology Brazil, launched by The Sandbox in September 2023, and several metaverses on SPATIAL for business, networking, and gaming purposes. She also works with NFTs and Blockchain games since 2021. She serves as a BizDevOps in Blockchain and web 3 projects in the Brazilian ecosystem. She got a bachelor's degree in Design and Fashion at Veiga de Almeida University. She is a Cripto Researcher and specialist in cripto market.

João Batista Gonçalves Junior – CTO | Web Developer PHP | Technology Manager - https://www.linkedin.com/in/joaobgj/

João Batista is a seasoned CTO with expertise in Web2 and Web3 technologies, specializing in full-stack development, AI integration, and blockchain solutions. Currently leading innovation at Monkey Branch, he focuses on creating advanced digital solutions that enhance user interactions and streamline business processes. Previously, as Technology Manager at AR Viagens, João implemented key integrations and optimized systems for the travel industry. His strong leadership in managing multidisciplinary teams allows him to deliver cutting-edge, scalable solutions across various sectors.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Costs Breakdown:

Operational Coordinator – Responsible for managing the entire operation, execution, and troubleshooting of the program. This role includes coordinating schedules, resources, professionals, and activities related to the program. 

Total Funds: 9.000 ADA

Technical Coordinator – Responsible for overseeing all technical aspects of the program, They will serve as the primary technical liaison between the program and Cardano specialists. Additionally, they will monitor the technical progress of the selected professionals involved. 

Total Funds: 9.000 ADA

Research team leader – oversees and guides a team in exploring new blockchain technologies, crypto trends, and market developments. They manage research projects, analyze protocols, identify opportunities for innovation, and provide insights into security, scalability, and tokenomics. Additionally, they collaborate with developers, ensuring the team stays ahead of trends and contributes to the project's strategic direction. The team leader works together with the research team and the Technical Coordinator

Total Funds: 9.000 ADA

Development - Code developer for all software and integration with HAskell specialist programmer

Total Funds: 46.500 ADA

Governance and Compliance – Responsible for managing all legal, accounting, and tax regulations within the Brazilian market. They will also oversee confidentiality, information protection laws, and ensure compliance regarding participants.

Total Funds: 2.000 ADA

Haskell Specialist Programmer – Will integrate the solution with Cardano Ecossystem and create all smart contracts with the blockchain.

Total Funds: 5.000 ADA

Contingency Fund - Always set at 10% of the total amount to account for fluctuations in the ADA token value, ensuring that the project can be completed without any financial shortfalls.

Total Funds: 8.050 ADA

Fees - There are fees in Brazil to ensure the program is fully legalized and executed without legal issues. For established companies, this fee is 15% of the total amount, so it has been calculated at the end.

Total Funds: 11.450 ADA

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The cost of the Valocracy project represents a strong value proposition for the Cardano ecosystem due to several key factors:

1. Scalability and Long-Term Impact: Valocracy is designed to be a scalable framework that can be replicated across multiple communities within the Cardano ecosystem. By creating a standardized governance and economic model for decentralized organizations, it provides long-term value as communities can adopt and build upon the system without needing to develop custom solutions. This increases adoption and engagement within the Cardano network, fostering growth and sustainability.
2. Efficient Use of Blockchain Technology: The project maximizes the potential of Cardano's unique smart contract capabilities. By leveraging features like Plutus and Haskell, Valocracy ensures that the solution is secure, cost-efficient, and optimized for the low transaction costs and high throughput that Cardano offers. This efficient use of resources reduces operational overhead, ensuring the cost of development is balanced with the high return on investment for the Cardano ecosystem.
3. Community-Driven Economic and Governance Models: By developing a decentralized economic and governance model, Valocracy aligns with Cardano's vision of empowering communities. It allows for the creation of sustainable, tokenized economies where users are fairly rewarded for their contributions. The system encourages both economic activity and governance participation, which will drive higher transaction volumes and increased activity on the network, further boosting the value of the Cardano blockchain.
4. Lowering Barriers to Entry for DAOs: The cost of implementing Valocracy is offset by the value it provides in lowering barriers to entry for new DAOs. By offering a ready-made governance and economic structure, it allows new projects and communities to launch with fewer resources, making the process more accessible and reducing the need for extensive custom development. This will lead to more projects choosing Cardano as their platform of choice, increasing its competitive edge over other blockchains.
5. Sustainability and Innovation: The project introduces innovative concepts, such as the separation of governance and economic power and the tokenization of individual effort. These innovations have the potential to disrupt traditional governance models and create more equitable systems. The long-term sustainability of this approach ensures that the project cost is not a one-time investment but a foundation for ongoing value creation within the Cardano ecosystem.

In summary, the cost of the Valocracy project is justified by the sustained benefits it brings to Cardano, including increased adoption, community engagement, transaction volumes, and innovation in decentralized governance. It represents a high-value investment that aligns with Cardano’s vision of a decentralized, equitable, and scalable blockchain ecosystem.