# Section 2: Sub-DAOs

### 2.1 Definition

A Sub-DAO is an entity or group of Contributors delegated responsibility for a Domain of Operations by members via DDIP.

Sub-DAOs are the atomic units of how Developer DAO advances its mission. As such, ratifying Sub-DAOs sets boundaries on what is and isn’t in the scope of DAO governance.

Any member may start a Sub-DAO and gather momentum by posting on the forum. Until a formal proposal for a budget is made and accepted, this Sub-DAO is considered “Draft”.

A Sub-DAO can be as broad or narrow as its initiators like, but Sub-DAO proposals must satisfy the following criteria or risk being removed by Stewards:

* Have a clear objective that aligns with the Developer DAO’s mission.
* Distinguish itself from or explicitly state its improvements on any existing Sub-DAO
* Propose clear budgets and timelines for producing intended outcomes
* Have a multi-sig setup with at least 3 signers

Sub-DAOs can have the following states:

| **State**                               | **Description**                                                                      | **Considerations**                                                                                                                                                         |
| --------------------------------------- | ------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Draft                                   | Being discussed but no proposal made                                                 | NA                                                                                                                                                                         |
| Proposed                                | Formal proposal made to Governance                                                   | Being discussed on the forum or voted on Snapshot                                                                                                                          |
| Active (Under Foundation legal setting) | Proposal accepted but operating via the Foundation                                   | Contributors sign contributor agreements directly with the Foundation that includes OKRs and rewarded for work. Must adhere to its processes for contracts, invoicing etc. |
| Active (Own entity)                     | Proposal accepted and has a separate legal entity                                    | Entity operates independently but has SLA/Contract with the Foundation that includes agreed OKRs and financial relationship.                                               |
| Renewed (both states)                   | Proposal renewed for following Season via DDIP                                       | As above                                                                                                                                                                   |
| Archived                                | Sub-DAO removed of responsibility for Domain of Operations by Stewards or Governance | Contract with Foundation made null and void.                                                                                                                               |

### 2.2 Formation and Funding Process

Sub-DAOs are formed via DDIP using this [template](https://docs.google.com/document/d/1c0OC_8xXFuGc9gsQu0_cEsea_6R1LqwtQFbdvMm4wDw/edit?usp=sharing).

A Sub-DAO that desires funding must apply for that funding by making a Proposal before the start of any Season or a call for Funding Proposals by the Stewards.

Sub-DAO Proposals to the DAO can request funding from the Foundation’s Treasury in $CODE or any other assets. The Stewards determine the treasury funds available for funding requests before each Season or specific call for Funding Proposals.

$CODE Rewards are calculated based on an hourly rate of 15 $CODE/hour. This can include both the work being completed by Contributors and rewards/grants for Members as part of the experience being provided (i.e. $CODE rewards for writing a blog).

Sub-DAOs define their processes and reward structures that are independent of DAO Governance. They are encouraged to set these processes and structures before work begins, clearly stating who gets paid, how much, for what, and how disputes are managed.

Sub-DAOs that sit outside the Foundation (have a separate legal entity) can seek other funding sources, whether or not the DAO has funded them. They are also free to provide services and form partnerships with other organisations unless otherwise agreed upon during the DDIP process.

Sub-DAOs are encouraged to be self-sustaining and not rely on ongoing DAO funding to maintain their operations. However, any Sub-DAO may continue to request $CODE budgets to reward their Contributors and to provide rewards to Members as part of the service they provide to the DAO.

All funding proposals must include “Domain of Operations”, “OKRs”, “Budget Request (Inc value returned to the DAO”, and “Team” in the Scope of Work section in their DDIP Proposal.

### 2.3 Domain of Operations

Sub-DAOs should clearly state the main “Domains” of work they will cover on behalf of the DAO, and indicate how their experience makes them suitable for it.

Examples of domains include (but are not limited to) the following: Events, Jobs, DevRel, Consulting, etc. Whilst some overlap might occur across Sub-DAOs, we don’t recommend overlapping too much since work can become redundant in those cases.&#x20;

In the case of a new Sub-DAO aiming to cover a domain already occupied by another Sub-DAO, the newly proposed domain will have to clearly state how their work is either an improvement on the current Sub-DAO or will target a different field within that domain.&#x20;

### 2.4 Objectives and Key Results

Sub-DAOs must demonstrate their OKRs in their funding proposal, including how they will help the DAO achieve its higher-level OKRs. They should include an overview of how requested funds will be spent to help achieve their OKRs in the Proposal. If a Sub-DAO requires additional funds before the end of the funding period, a request can be made directly to the Stewards.

### 2.5 Accountability Mechanisms

Sub-DAOs must adhere to the following accountability mechanisms:

1. Sign an agreement with the Foundation.
2. Monthly update the forum at least 48 hours before the last Stewards Council of each Month
   * What has been done this month, including performance against agreed OKRs
   * Plans for next month against agreed OKRs
   * Reflections
3. At least one representative attends monthly Town Hall
   * An opportunity for the community to ask questions and provide feedback about certain aspects of the Sub-DAO and its operations
4. Seasonal
   * Re-apply for funding showing performance against pre-defined OKRs, accountability expectations
   * Participate in any relevant DAO-wide Retrospectives as determined by the Stewards

Stewards are responsible for reviewing Sub-DAO performance and deciding on the necessary action to take if a Sub-DAO, or it’s Contributors, are not delivering what has been agreed. While corrective action is first encouraged, Stewards ultimately have the authority (via majority vote) to withhold further funding or terminate agreements if Contributors or Sub-DAOs are in breach of the agreed terms.

#### Coordination between Sub-DAOs

Coordination between Sub-DAOs will happen during the weekly Coordination Call. At least one Contributor from each Sub-DAO must attend this meeting at a min every fortnight and arrive prepared with an update on their progress and any requests for action.\
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Reference:\
[P-22: DAO Governance Structure Upgrade](https://snapshot.org/#/devdao.eth/proposal/0x9b84e2300bdcf8d8dde53687c29f71ab9e16ee99feac58734687a2ff10f869ee)
