HISTORY
On the planet Magonia, the nations of the world used to use a variety of currencies, one for every nation in the world. After a massive geomagnetic storm disrupting Magonia's magnetic field, the majority of the account ledgers were wiped out, as Magonia used magnetic storage similar to the hard drives used on earth, and the majority of Magonian account balances were stored virtually, rather than physically with hoards of commodities, or on paper or some other abstract optical storage medium. Most nations had their computerized records destroyed overnight. A few survived.
Immediately after the geomagnetic storm, most nations of Magonia descended into chaos. The economy collapsed without a means to coordinate it, and most populations were reduced to informal credit and barter systems in whatever local area they inhabited. The few nations that happened to survive without substantial damage from the geomagnetic storm with their records intact rose to great power. Following around fifteen years of rebuilding the communications system and economy—and fighting back against the few imperialistic nations that tried to take advantage of the situation—the Magonians are roughly back to where they were before. They have restored widespread telecommunications and their internet. Their power grid is back online. Some nations survived. Others fell. Some new ones were born. Some split. Some were combined.

With the crisis largely completed, the United Nations of Magonia is now choosing to meet to figure out how to avoid at least the financial aspects of a future geomagnetic crisis. Your task is to determine the design for a DAO that all of the nations of Magonia would agree to use in order to maintain their account balances and other records in case of another geomagnetic storm. Bonus points if you come up with something that you think that all citizens would use, without state coercion of any kind. The DAO needs to be able to maintain the fidelity of account balances for each nation's citizens and organizations, as well as actually be a good idea for them to decide to use. The DAO, additionally, needs to be something that's good for future persons and institutions to choose to use, as Magonia is still at risk of another geomagnetic storm, and as the Magonians cannot predict which parts of the world it is likely to affect, they need to be united under a single protocol that all parties can endorse, including future parties, so as to avoid infighting that might cause another catastrophe like they just experienced.
INTRODUCTION
This report is a proposal to create a sustainable decentralized organization which is capable of acting as steward of the new financial system and fulfilling 3 main goals:

1. Align incentives of governance participants such that all parties involved are better off if they work for the system than against it.
2. Develop a robust internal proposal, incentivization, and dispute resolution mechanism.
3. Protect the system from bad actors and outside attacks.
OS DAO GOALS
• Maintain accurate account balances for citizens and organizations of any state and remain resilient and reliable in case of new cataclysms.
• To enable states to recover and continue to perform their functions after the mass destruction of their records ("disaster resilience").
• To exercise control over the single currency of all states providing the possibility of creating national currencies and their interaction with the single currency in its architecture.
KEY FEATURES
• Accuracy of balances is maintained due to the POS sharding blockchain and fully open source. All the advantages of this technology will be used.
• Both national governments and individual citizens or organizations can be members of the OS DAO.
• Single currency for all countries. Due to the natural disaster, a good place to start is building one blockchain system with sharding for all countries. Within the country, all calculations take place inside the shard – the balances are added to the common chain once a day, all nodes also store all copies of the shards. The more calculations within a unit (regardless of whether it is a country or organization/group of individuals), the more blockchain capacity it needs, which can be increased by horizontal expansion in the number of nodes. An additional tool for expanding the network is ZK-Rollups, the possibility of implementation of which is inherent in the OS DAO architecture. Blockchain supports a full-fledged IPFS with high throughput and scalability option for data storage.
ADVANTAGES
Via single currency, transaction costs for transfers will be removed and high network bandwidth will be provided; there are also automatic mechanisms to predict and manage inflation. The decision on Monetary Policy, inflation and Tokenomics is taken as a consensus decision of the OS DAO.
TECHNOLOGY
Highly developed countries can help countries recovering from the collapse by providing them with balance storage infrastructure and management tools. For this purpose, countries must run their own blockchain nodes, receiving OS DAO payment tokens in return in the amount proportional to the economic performance of the country.

It is necessary to switch all countries to a single blockchain, since a single infrastructure should be formed for the successful OS DAO.
Each country is required to run a dynamic number of nodes for the integrity of decentralization and security - the more transactions a country makes, the more nodes it needs to run (OS DAO can further incentivize validators).

• The node distribution architecture is as follows:
• Main nodes of each country;
• Nodes of organizations;
• Individual nodes;
• All nodes contain copies of the balance, as well as the results of OS DAO management. For privacy, zk-SNARKs and zero-knowledge proof can be used.
What functions will OS DAO perform?
To launch and support all the functions of this decentralized repository OS DAO will be created, which will determine the participation criteria, infrastructure solutions and tools, incentives for all three layers of members - (Nations, Organizations, Individuals). OS DAO will also be responsible for determining the direction of new technology opportunities and network development.
OS DAO Structure & Token system
• Neutrino
• Photon
• SOLARID
OS DAO HAS 3 TOKEN SYSTEM:
1
Financial Token called Neutrino
Neutrino is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the blockchain network without the need for intermediaries. Any nation, organization or individual can hold, stake and transact Neutrino as a universal means of payment and a measure of value. Thus, private money is equal to the number of Neutrino possessed by a person or entity.
Every owner of SOLARID can stake their Neutrino and get personal APY according to the criteria below.
2
Governance token called Photon
• Photon is used for voting by the owner of SOLARID.
• Photon is possessed by only one person.
• Photon could be Delegated to a Candidate for Voting.
3
Personal NFT called SOLARID
Every Magonian (citizen of any nation on the planet of Magonia) has a SOLARID that is specifically issued by OS DAO and has records of a person's biometric data (encrypted with zero-knowledge proof method), reputation levels, skills and achievements, education and experience, social activity, etc. The main feature of SOLARID is the REPUTATION criteria, which is calculated as a complex function for all personal indicators embodied in the NFT

• SOLARID changes over time according to the actions of a person and certain rules.
• SOLARID cannot be transferred or delegated.
• SOLARID has a record of personal reputation that is changing during a person's life. Reputation is recorded as a number and has an upper limit decided by OS DAO.
• SOLARID determines the weight of personal vote: Vote (number of Photons) is a function = F (REPUTATION; Neutrino)
The number of Neutrinos is not decisive and only provides a small additional factor for calculating Photons. There is a Neutrino limit, exceeding which does not give any extra factor. The Neutrino balance is recorded several times over a certain period of time and is calculated as a weighted average.

Every holder of SOLARID has a right to vote in OS DAO or delegate their Photons to professional representatives called Illuminated.

Illuminated is a qualified person - holder of SOLARID with high REPUTATION, above a certain level, determined by OS DAO, and high social status, who is responsible for voting on every OS DAO proposal using delegated Photons. Illuminated are representatives of SOLARID holders who have no time to participate in voting directly. Photons are delegated temporarily and can be revoked at any time.

Illuminated can lose delegated Photons and reputation in case of malicious behavior.

The core OS DAO structure is called SOLARTREE. It is completely decentralized and doesn't have a specific physical location. All core DAO communication and coordination is remote.

Solarpunk is a qualified person - holder of SOLARID with high REPUTATION and social status, who is a part of SOLARTREE with full-time DAO participation. Every Magonian has a right to put forward their candidacy and become Solarpunk, if enough votes (Photons) are cast in their favor. To become a candidate, Magonian must have SOLARID with extremely high REPUTATION and SPECIAL SKILLS related to the chosen BRANCH.
SOLARTREE HAS 5 BRANCHES:
1. Treasury and ledger branch
DAO treasury control, world ledger and resource management. Members are selected by Illuminated and have ability to:

• Make Treasury management proposals
• Send resources for operational expenses to other DAO branches
• World ledger statistics and analytics reports
• Create proposals for engineering branch to optimize DAO functions
• Statistics collecting (at all levels of proposal creation and adoption);
• Operating expenses implementation at the highest levels of government;
• Administration of operational accounts at all levels of nations and branches.

The treasury and ledger branch are in fact the highest executive and conceptual body of the DAO. Members of the Treasury, before submitting their candidacy for the first time, must have previous experience in financial systems at country and regional levels, as well as a perfect reputation in their SOLARID.
2. Policy and monetary branch
Policy team of experts is elected by Illuminated from candidates. Policy & monetary branch has ability to:
• Make policy proposals
• Make monetary proposals
• Undertake financial analysis, audits and DAO status report
• Audit, KPIs & OKRs
• Daily analysis of operational data of every department
• Policy research and creation of policy proposals
• Report analytics, KPIs & OKRs

Policy branch has local policy teams of experts selected by Illuminated of each and every nation who have ability to:
• Create policy proposals with interests for the benefit of their home nation
• Make reports about home nation benefits and possible issues regarding OS DAO
• OS DAO analytics from the perspective of home nation economy and possible problems of the nation
3. Engineering and development branch
Engineering team is selected by Illuminated and is responsible for:
• hardware and software development
• creating proposals for hardware and software upgrades and/or goals
• troubleshooting and infrastructure support

Engineering team administers:
• Daily maintenance of implemented software products according to the needs of accepted proposals (including routine maintenance, troubleshooting, debugging and etc.);
• Development of software products according to the needs of DAO (according to the accepted proposals);
• Research and reports of the latest data (state of blockchain) in the DAO Development Engineering field.

The team of engineers develop and maintain software products not at will, but after the approval of the proposals put forward by policy and monetary branch (according to the needs of the DAO). The work of this branch in the area of troubleshooting and infrastructure maintenance is paid for on a permanent basis through the transfer of costs from the treasury according to the operational proposals for the branch. These proposals are created by the leaders of workgroups in the Engineering department.
4. Social networking branch
Social networking team is selected by Illuminated and is responsible for:
• social media information, broadcasting, media content and socials
• public relationships, DAO transparency, public reports and feedback
• Government relations and country level communication
Social & PR Solarpunks are responsible for handling all aspects of planned publicity campaigns and PR activities of the Solarpunk DAO.

Activities vary and could be:
• Planning publicity strategies and campaigns
• Writing and producing press releases about upcoming proposal voting and voting results
• Dealing with public enquiries, media, and related organizations
• Organizing and attending promotional events to popularize DAO and promote values and mission statement
• Speaking publicly at interviews, press conferences and presentations
• Running campaigns to attract new DAO members
• Gathering feedback
• Analysis of media coverage
Social networking branch has regional units that are responsible for presenting all DAO related information on a regional level.
5. Coordination branch
Coordination & mediation team is selected by Solarpunks of every other branch and responsible for:
• Conflict resolution. Every member of any branch can create a personal or group claim to highlight the issue they have with other branches. Coordination branch makes final decision that is not debatable
• Conflicts of interest analysis and resolution
• DAO monitoring and analysis for bad actors or malicious behavior
• Validators can be a part of coordination branch
BRANCH AUTONOMY
• Every BRANCH must be entitled to perform everyday tasks without voting overload. Thus, every BRANCH can create authorization proposals for the number of tasks. These tasks can be performed daily without any discussion or voting. With proper authorization, BRANCH can operate with a certain degree of autonomy.
• Every BRANCH can create strategy and planning proposals that will describe tasks and goals of the BRANCH and will provide further operational framework.
• Every BRANCH must create a workgroup for every task and elect a group leader (via internal on-chain ranking voting). Workgroup will operate daily until the goal is achieved. When the goal is achieved - the group can be dissolved or assigned a new task.
Leaders of the workgroup are responsible for:
• Management of operational tasks related to the administration of the working group;
• Maintaining a narrative goals outline and intentions of the working group;
• Adjusting the goals of the working group, providing a clear roadmap to achieve the goals;
• Approval the creation and disbanding of teams within a workgroup to carry out work and/or specific projects or tasks;
Any individual is eligible to nominate themself as a leader of a workgroup within the DAO BRANCH. Eligible persons should nominate themselves for the vote. Candidate who has collected enough votes by ranking vote is elected as a group leader. Leaders can be dismissed or replaced by a majority of votes inside the workgroup. Leaders may resign at any time after announcing their intention. In case a leader is dismissed, resigns, or is unable to keep working for any reason, any vacant positions will be filled by the next ranked leader.
Points to guide the distribution of work inside the workgroup:
1
Priority
Which project work has the highest priority? Who does the work the fastest and who has the most competence? That member of the community should take on the task.
2
Skills
In the DAO community, it is desirable that members have a set of key skills for the task. Accordingly, in this case the task will be performed better.
3
Resource availability
Proper allocation of resources by tasks is necessary. From basic (urgent) tasks to simple tasks. Otherwise, there will be a risk of slow performance, delaying the task
4
Development opportunities
Professional development of members of the DAO community is an important point. In this case, it is better to give tasks that will lead to the skills and competencies development of members.
5
Passion
The DAO team should be involved and passionate about the tasks of the community. The passion will contribute to the rapid growth and advancement of the project.
Workflow inside the BRANCH:
Every step is public and recorded on-chain. Documents are published in IPFS, records are available to every Magonian with SOLARID. The result of every workgroup's activity is presented via a report that is public and verified by DAO. Reports are processed and audited by the POLICY BRANCH, every step is public (via SOCIALS BRANCH) and available for everyone. OS DAO structure is completely transparent and every activity, proposal, audit or written document is published on blockchain (IPFS, decentralized tools, social networks).
Every Magonian can create a proposal and pass it to the chosen BRANCH.

Solarpunk can be excluded from SOLARTREE, if their own BRANCH found them to be inefficient or weakening the DAO functioning. In that case, COORDINATION BRANCH takes a decision by simple majority.

Every Magonia nation funds OS DAO TREASURY by transferring the exact amount of Neutrino as a fixed percentage of the nation's finances. TREASURY is used for funding:
• Engineering, infrastructure and blockchain related data-centers
• Solarpunk incentives
• Monetary proposals
• Illuminated
• Validators
VALIDATORS & NODES
Any individual or organization can run their own node and join OS DAO as a validator. Neutrino is used to provide Proof-of-stake consensus. Depending on required capacity, the number of validators can increase or decrease based on the needs of OS DAO and the bandwidth of the blockchain. If a group of nodes is trying to collude, the nodes lose security (the slashing mechanism).

Validators are rewarded for holding shards and mining blocks, and for securing transactions.
OS DAO Tokenomics provides for projected inflation:
• Magonian who delegated their Photons get increased APY
• Illuminated are rewarded from the Treasury + APY

Validators receive rewards for block/data storage/fees, as well as additional country/organization rewards.

Decentralization of network nodes is carried out at the expense of additional rewards allocated from the Treasury for the organization of additional nodes and nodes in the regions where their number is insufficient.

ENGINEERING AND DEVELOPMENT BRANCH actively monitors and analyzes the geographic location of nodes and networks, and makes proposals in order to maximize decentralization and reduce the risk of network damage in case of natural or man-made disasters.
Voting System
There are two ways to vote within OS DAO
1
Direct voting
• Vote (amount of Photons) is a function = F (Reputational Value of the person; Neutrino)
• Each SOLARID holder can vote on all proposals using their own delegated Photons and actively participate in all votings.
• A Magonian who votes with their own Photons or delegates them receives increased APYs on their Neutrino.
• The number of Neutrino's is not determinative and gives only a small additional factor to calculate Photons. There is a Neutrino threshold above which there is no additional factor. The Neutrino balance is being snapshotted several times over a period of time and is calculated as a weighted average.
2
Voting by delegating the Illuminated
• Any Magonian can become an Illuminated or delegate their Photons to an Illuminated.
• The system is designed to encourage the Illuminated to accumulate as many Photons as possible, so that the Illuminated receive an increased APY on the Neutrino protocol.
• Each Illuminated can accumulate delegated Photons no higher than a certain number. Thus, to become an Illuminated it is necessary to exceed the minimum threshold for getting into the set of the Illuminated.
• The maximum possible number of Photons of each Illuminated may also be limited.
• The APY of an Illuminated depends proportionally on the number of Photons delegated to him and also has an upper limit.
• A similar system applies to each Magonian.
CONSENSUS
• The decision is made by a simple majority of Photons with a quorum [majority of given Photons +1%] of the total number of voted Photons.
• If two options have the same number of Photons, the proposal is sent to the BRANCH responsible for the proposal for revision.

COORDINATION BRANCH may veto and stop voting on any proposal if it deems it harmful or controversial. After that, the proposition must be reworked and voted on again.

Every Magonian can create a soft proposal and pass it to the chosen BRANCH.

OS DAO can change the quorum and other parameters of the voting system.
Incentives & Rewards
Introduction:
It's worth starting with the fact that Constants and Variables (with basic values) are already present or should be defined in the system, for example:
• Who are Citizen Candidates and their properties (children/referrals);
• Procedure for obtaining Citizenship (and what is given to the citizen as an advance "equal starting opportunities for all citizens": reputation/money, there may be a special role from the start, access to information or something else = we begin to fix the variables, see below.);
• Delegators and the Delegation process (and associated bonuses);
• Reputation workflow and base values;
• Procedures for monetary operations (emission, inflation, and the procedure for their determination);
• Roles (basic, for understanding/identifying areas of activity);
• Other variables and their base values are required for the functioning of the system "now" and maybe "in the future": Time/age, Health/disability, IQ/Intelligence, etc.
• Defining Consensus in general (all its properties, taking into account the points described above).

IMPORTANT NOTE: The foregoing can be defined both for the micro-community and for the planet as a whole. Each micro-community, acting within the framework of a large one, can be allowed to determine its values of Variables and Constants. *The above introduction is important for understanding the process of managing incentives and the functioning of the DAO in general.
An additional measure to encourage the participation of Magonians in voting (or delegation) is the raffle (sweepstakes) system where everyone who votes or delegates their Photons receives an NFT ticket that allows them to take part in the lottery with prizes in the form of Neutrino (funded from the treasury via proposal).
1. PERSONAL. Taking Maslow's Pyramid of Needs as our basis, from the bottom of the hierarchy upwards.
Physiological needs: satisfying hunger, thirst, protection from cold, breathable air, sufficient sleep, absence of pain, and so on.
Incentives that we use to cover the specified need of Citizens:
Money (covering physiological needs) - not only accounting and money-flow tracking, but also payments (for example, one-time payment when obtaining Citizenship, or regular payments if there is a Role and corresponding salary);
Age and Health (these values are at least taken into account) - by introducing these indicators, we make it clear that we care about them (use them in a motivational way or another).
Age - may affect tHealth - can also be taken into account for the payment of benefits (e.g. in case of disability or when calculating insurance), and also can be stimulated (maintain your health and get rewarded with money/reputation). The closest example is the StepN project (Move2Earn model "move to earn");
he possibility of obtaining Roles (e.g. pension contributions, etc.).
The need for security: a sense of confidence, getting rid of fear and uncertainty, experiencing order, predictability, and control in life.
Incentives:
Citizenship, being a Citizen - guarantees socialization and participation in projects (at all levels: from Global and State to Organizational and Micro-group);
Each citizen is confident that his balances are kept secure on the blockchain - they completely trust the system by default (having a pair of private keys and unique biometrics);
The need for belonging: human emotional need for interpersonal relationships, affiliating, connectedness, and being part of a group.
Incentives:
In addition to Citizenship (which also stimulates the realization of this need), there are Roles (possibility to get/lose them) - that guarantee not only belonging but also the realization of other needs. All roles are entered into the UUI and affect participation/weight in the DAO;
Esteem needs: gaining success, approval, recognition (e.g., status, prestige);
Incentives (except for Roles, which also help here):
Reputation level - meeting the need for respect of others (stimulates to act within the global framework and motivates cooperation within groups);
Cognitive needs: to know, to be able, to explore;
Incentives:
Delegation of access or provision of information (to closed sections or other communities), as well as obtaining the right to delegate (to manage the access of others for stimulating/rewarding their behavior as well);
Aesthetic needs: harmony, order, beauty;
Incentives:
Same as Cognitive needs) - stimulated by access to information/groups/sections;
The need for self-actualization: the realization of one's goals, abilities, and the development of one's own personality.
Incentives:
Voting/Delegating/Governance Roles
As well as other Roles (their gain/loss).
The highest level of needs acc. Maslow's pyramid
MASLOW'S HIERARCHY OF NEEDS
2. SOCIAL GROUPS NEEDS AND INCENTIVES (within a large/small community): Essentially, a social group is any small part of the DAO united by common interests, responsibilities, areas of expertise, etc.
Incentives to work for the system (and not against it):
Rewards for activity in all areas = Reputation, Money, Roles (coincides with personal incentives written above).
Incentives for the security of the system (something technically wired into the system/contract or controlled by someone centralized with the loss of autonomy):
Rewards for Validators/Miners: Reputation, Money, Roles.
Incentives for System Openness (within smaller groups) and therefore motivation for the system's growth:
Having children and inviting newcomers to our communities is incentivized with the use of a referral system. We have to encourage the inflow of new Candidates and Citizens.
3. GLOBAL (PLANETARY) NEEDS AND INCENTIVES:
Security is especially important factor not to repeat old system's failures (loss of all data):
Money/rewards - validators/delegators have to be encouraged, as mentioned earlier. Possibly Health (global health monitoring and local healthcare programs).
Progress (growth and development):
Inflation - motivates to act (in order not to lose the value of what you have, you have to act): vote/get elected, get roles, give birth to children (attract referrals), etc.
System Openness (once again):
Referrals/Children (we set the rewards for having children/referrals, it can be minor, but a controlled factor).
Decentralization (both planetary and in smaller groups):
Here we have Consensus (which will be selected at the global level) and its functionality should have an incentive within itself (decision on it should eventually REWARD everyone participating for its performance). In other words, a functioning and self-learning consensus(s) is the incentive(s).
Autonomy (both planetary and in smaller groups)
Each element of the system has to work on its own, we incentivize this by Consensus with Delegation (and with corresponding rewards), as well as by punishment (Inflation) for inactivity without delegation.
An example to understand the above:
From Global to Personal (in the center of the circle), you can enter your own variables (e.g. your budget, time factors for retirement/delegate change/role change, etc.).
Then, if one of the factors is important globally for the state, then at the Global level a global decision is made (if it has not been made before): for example, to encourage sports and immediately the budget for this goes down.
Important note (referring to question 8 on consensus):
Incentives should be manageable (or even self-governing), for example: When making any decision, we determine the desired KPI at the input (expressed in the incentives/groups of incentives laid down by us, for example, Money, and set the TIME when we measure the result), then at the output (after making a decision) and the passage of set time period, we can measure the result and compare it with the desired goal = thereby receiving feedback. Based on the received measurement, you can automatically Reward/Sanction for the decision made and/or offer to change the decision. Again, automatically or through delegation.
Onboarding
Onboarding is a set of activities designed to effectively integrate a newly arrived DAO community member into the social and work environment. It is not an isolated one-day event, but a process that begins at the moment of joining the community and continues over several months.

This process can be viewed more broadly and can be broken down into several stages. These stages are:
• Filling out the form
• Onboarding
• Learning
• Active participation in the community

For validators - connection to shared blockchain according to OS DAO requirements for validators (technical parameters etc.)
1
Before you can become a new member of the DAO, you must fill out the form and post SOLARID for evaluation.
This is a series of questions designed to allow the DAO community to get to know the new candidate for membership. The list of questions (can be expanded to suit the needs of the DAO): Name, Name of organization, Country, Purposes for joining the community, Skills, etc.
2
A new candidate is approved by voting. Accordingly, if the candidate is approved, an invitation letter is sent. Otherwise it's rejected.
3
If a new candidate receives a letter of approval: All data in SOLARID must be verified against OS DAO requirements for reputation, skills, experience, etc. Candidate receives a welcome letter providing:
• A presentation of the overall goals of the DAO (so that the individual can understand the DAO's mission and direction, who does what, why, and how it all works at our DAO)
• Useful contact details
• Announcement page
• Documentation
• FAQ
• Blog
• Links to the chat rooms to connect with the DAO community.
• A presentation of significant milestones in DAO history, accomplishments, a description of the culture, values and structure of the organization, and other useful information
After successful completion of the tests and background checks, new candidates will be allowed to create their own proposals, participate in voting, and take an active role in the DAO community.
Audit & Metrics
KEY METRIC
Technical metrics:
• Every BRANCH must be entitled to perform everyday tasks without voting overload. Thus, every BRANCH can create authorization proposals for the number of tasks. These tasks can be performed daily without any discussion or voting. With proper authorization, BRANCH can operate with a certain degree of autonomy.
• Every BRANCH can create strategy and planning proposals that will describe tasks and goals of the BRANCH and will provide further operational framework.
• Every BRANCH must create a workgroup for every task and elect a group leader (via internal on-chain ranking voting). Workgroup will operate daily until the goal is achieved. When the goal is achieved - the group can be dissolved or assigned a new task.
DAO metrics:
• Management of operational tasks related to the administration of the working group;
• Maintaining a narrative goals outline and intentions of the working group;
• Adjusting the goals of the working group, providing a clear roadmap to achieve the goals;
• Approval the creation and disbanding of teams within a workgroup to carry out work and/or specific projects or tasks;
In order to determine the key performance/success indicators:
1. Uniformity - the number of nodes can be used as a criterion of effectiveness. If their number increases, the residents of other countries unite and the effectiveness of "DAO" is high, and vice versa.
2. Authenticity, Reliability, Security - the number of failures, bugs or hacks during a certain period of time can be used as a criterion of effectiveness
3. Fairness - resident satisfaction can be used as an effectiveness criterion - number of proposals, turnout at the vote, transparency of decision making and award distribution, average consensus and usage/influence. For example, if 10 suggestions were made and a participant voted 10 times, then they are satisfied with the incentives and the system is effective. The percentage of people who vote can be based on the total number of participants in the DAO
4. Revenue/Profit Growth Indicator - City/County Budget Control
5. Inflation rate - indicator of the inflation rate
Characteristics of a good metric:
• Encourages appropriate action
• Significance to the client (member, donor, etc.)
• Simple, clear, logical, and repeatable
• Clearly defined
• Data that is cost-effective to collect
• Shows how the organization's goals and objectives are being met.

Since measuring everything in a row is inefficient in terms of resources, Magonia must select and track key KPIs. To identify these KPIs, we must identify the key work processes,
or those processes that create the most value for Magonia (the services and products we provide).
Important points for Metric of success:
• Influence: We need to check, whether the acts of those groups or individuals could successfully apply to the problems and be solved completely or partly, whether it paves the way for the long term development of Magonia or whether it is sustainable or not. What is the lesson learned from their commitment?
• Magonia rule and regulation compliance: Did they follow all the steps required by Magonia? If it was a funding request proposal, how efficiently would it be passed (amount of money, timeline, bill or documents if any). Did the group or individual work under the regulation and law?
• Quality: Does the solution or method carried by those groups or individuals meet the key performance indicators or not? Did they complete the tasks before the deadline? Did they affect any of the other good factors or the structures or any other functional parts of Magonia?
• Mutual agreement from the whole community: one of ultimate goals is community consensus. If a solution or output cannot satisfy most of the members or even separate the community into smaller groups, even if its achievements are clear, it should not be considered a success because it leads to another obstacle. On the larger scale, what is the thinking of the broader community and partners?
• Financial efficiency: how much profits did they make based on the capital and resources/equipment invested? How much did they save for Magonia compared to other solutions? Will it provide much more profits in future?
BALANCED SCORECARD METRICS (BSC)
A system for developing metrics is the BSC. Traditional performance metrics provide information about an organization's past performance. BSC, on the other hand, can better predict future results or how well the strategic plan is being executed. The BSC process is a continuous iterative process that focuses on internal processes and external outcomes. Systemic control is based on performance measures that are continuously tracked over time to identify trends, best and worst practices, and areas for improvement.

SMART (Smart, Measurable, Attainable, Realistic and Timely) test must be taken to determine the metrics:
• Is the metric objectively measurable?
• Does the metric include a clear statement of the end results expected?
• Does the metric support member requirements, including compliance issues where appropriate?
• Does the metric focus on effectiveness and/or efficiency of the system being measured?
• Does the metric allow for meaningful trend or statistical analysis?
• Have appropriate industry or other external stands been applied to the metrics?
• Does the metric include milestones and/or indicators to express qualitative criteria?
• Are the metrics challenging but at the same time attainable?
• Are assumptions and definitions specified for what constitutes satisfactory performance?
• Have those who are responsible for the performance being measured been fully involved in the development of this metric?

BSC provides a view of the organization from four perspectives:
1. The user (the voice of the customer/participant)
2. Financial goals
3. Internal processes
4. Changes and potential for growth

From each of these four perspectives, it must define its strategic goals. Then identify the three or four elements that are measured for each goal, and determine the target value that each indicator seeks to achieve. Finally, Magonia must identify the initiatives it will take to achieve those goals. BSC relies on a clearly defined strategy and understanding of the relationship between goals and initiatives. Magonia should identify both past and lagging indicators that can be used as a measure of future performance. Finally, Magonia should identify those metrics that are best suited to their goals rather than simply adopting any other organization's successful metrics.
SOURCECRED
SMART (Smart, Measurable, Attainable, Realistic and Timely) test must be taken to determine the metrics:

For the most accurate measure and more fairly reward participants' contributions at the Regional Governing Council (RGC) level, Magonia should use modern Web3 tools such as SourceCred. This tool helps measure the quality of interaction in DAOs through its technology, which makes people's labor more visible and rewarding when they work together on a project or community.

SourceCred uses an algorithm to determine how much value or contribution a participant has made to the project as a whole. When a participant contributes, SourceCred's goal is to "see" that contribution and assign him or her a number of "Cred" depending on the value he or she has contributed to the project as a whole.

The algorithm uses what we call "weights," which are a set of rules that indicate which types of contributions are worth a certain amount of Cred. The weights for allocating Cred are determined by each Magonia region individually, giving each Magonia region the ability to decide what it values and what actions support those values as it works together to create something. Each region using SourceCred can decide for itself what is valuable and worthy of Cred and what is not.

The KPIs or Cred of each resident of Magonia are also registered in his multi-passport, and so he can apply these KPIs in any other country, if it does not contradict the laws of that country.

A Cred on its own can be a good signal of what is valuable and who is really doing the work for the success of Magonia, but it's hard to pay the rent or buy lunch with a Cred account. That's where "Grain" comes in.

A "Grain" is the digital currency for a particular Magonia region (or a common currency for all regions) that is minted and issued to residents who have a Cred in that region. As residents earn Cred, they also earn Grain. Unlike Cred, Grain is a form of currency that can be transferred both within and outside of the Magonia region.
AUDIT OF SMART CONTRACTS
Prior to launch, smart contracts must be thoroughly tested to identify bugs, vulnerabilities, and risks before the code is deployed and used on the main network, where it is no longer subject to change.

Auditing smart contracts early in the development lifecycle prevents potentially catastrophic post-launch vulnerabilities. The engineering team for the design and development of the DAO should be tasked with overseeing the execution of smart contract audits. The main means by which problems in contracts are identified:

Tests:
Unit tests or unit testing - testing individual parts of the contract.
Regression testing - running the same tests on previously tested code, after the code has been changed. Rerun tests after changes.
Integration tests are tests for the interaction of modules and the system as a whole. This is contract interaction testing.
Formal testing — testing a smart contract for compliance with the documentation.

Audit:
Audit by a third party developer. In addition to the main developer, the contract is also checked by the auditor developer.
A bug bounty is a scheme in which code is posted to a git repository and everyone who wants to contribute is welcomed to find bugs for a reward (usually tokens).

It should be noted that it is impossible to cover everything with tests. Therefore, when creating a contract, one must follow the recommendations for writing secure code. But in general the implementation of the recommendations does not relieve you of all errors, but only reduces the likelihood of a successful attack on your contract. A large, full audit of solutions is impossible without experienced developers who are able to check the high-level logic of contracts, its lifecycle, aspects of real operation and compliance with the task, and not just typical attack patterns.

Through voting by our DAO team, it is necessary to select external teams that already have extensive experience in auditing smart contracts. This will save time and financial resources and eliminate the risks of abuse within the DAO. Security Audit provides detailed analysis of DAO smart contracts to protect funds. Since all transactions in the blockchain are finite, it is impossible to return funds in case of theft. Minor coding errors can lead to huge amounts of money being stolen. For example, the DAO hack on the Ethereum blockchain took approximately $60 million in ETH and even led to a hard fork of the Ethereum network.

Auditors study the code of smart contracts, write a report and submit it to the DAO team. An audit usually includes four steps:
1. The audit team conducts an initial review of smart contracts.
2. The results of the analysis are provided to the DAO team for action.
3. The DAO team makes changes based on the issues found.
4. The audit team issues a final report, taking into account new changes and remaining errors.

Since blockchain transactions are irreversible, it is necessary to ensure that the smart contract code is secure. The nature of blockchain technology makes it difficult to extract funds and solve problems after the fact, so it is better to prevent vulnerabilities at all costs.

The approaches of audit firms may vary, but a typical audit looks like this:
1. Determining the scope of the audit. Smart contract specifications are determined by the purpose of the project and the overall architecture. The specification helps the audit team understand the goals of the DAO when writing and using code.
2. Appointment of the initial price depending on the amount of work.
3. Examination. The tools and methods of verification depend on the audit team. Usually automatic and manual checks are used.
4. Creating a draft report with the bugs found and providing it to the DAO team to correct them.
5. Publication of the final report, taking into account all the actions taken by the team to solve the problems encountered.

The report is provided at the end of the audit. Most reports categorize problems by severity: critical, major, minor, and so on. The report also indicates the status of the problem, as the project team is given time to resolve it before the final report is published. In addition to general conclusions, the report usually contains recommendations, examples of redundant code, and a full analysis of coding errors.
AUDIT WITHIN THE DAO
Task groups are created within each department of the DAO. And any new proposals, before being voted on, come to these working groups for verification (audit).

The purpose of the audit is to check one or another proposal for non-conflict (compliance) with the main goals of the DAO. The audit should check the current and new proposed KPIs (metrics of success) for compliance with the goals of the DAO. This means to decompose the main measurable goals of the DAO into component indicators (low-level).

Also, the audit should be carried out not only on new proposals, current tasks, new and old KPIs, but also on the organizational structure of the DAO (it must correspond to the goals of the DAO). This means that each Department of the DAO must have goals consistent with the global goals of the DAO. Periodically needed to revise the structure of the DAO, KPI and rebalance the indicators (Balanced ScoreCard).
AUDITING THE HEALTH OF THE ENTIRE NETWORK AS A WHOLE,
AS WELL AS INDIVIDUAL NODES
Node monitoring: health, performance, fault tolerance. Finding out which nodes meet the requirements and which do not.

The network infrastructure must remain operational in the event of node failure (in the event of cataclysms) and adapt when loads change. Incorrect operation or insufficient performance of individual components can adversely affect the efficiency of the infrastructure as a whole. These problems appear due to incorrect distribution (leased servers are in one place) and incorrect use of hardware resources.

It is necessary to constantly evaluate the load of working nodes, evaluate their UpTime. However, that requires developing a single control panel grouped by priorities. This panel should continuously monitor the network without user intervention. This will reduce security risks, optimize resource usage, and ensure fault tolerance and performance.
Toolkit
We recommend using the following toolkit at this link

Сommunication media are an important tool for the proper functioning of DAO. These include digital corporate portals (trackers, groups, workflow, databases, etc.), instant messengers (social networks, phone calls) and, of course, real meetings (panel sessions, conferences, etc.).
We propose developing a smart secretary-bot that will deal with correspondence within the DAO and beyond. The digital bot is engaged in sending letters, requests redirection, performer selection, and so on. The major problem of many organizations is long correspondence and loss of messages. Thus, the bot will identify requests, determine the participant and address the message to him independently. The library and a link to the community data archive can be also included in order to restore the chronology of events. The bot will contain a database of addresses, email templates, various affiliate programs, a mailing service, and so on.

A DAO portal is a web interface that gives participants access to community data. The corporate portal is our "virtual community" that allows participants to share, add, change, delete information and documents, and most importantly – work together. This new system must have the ability to create task trackers and calendars.

Task trackers are services for co-working. They are also used by the participants who organize their own work. With their help, one can set tasks and deadlines, control the process, and conduct internal correspondence. Therefore, it is possible to create business processes which will provide an opportunity to track the stage of the business process, its performers, and decisions taken on it.

Schedules are logical-structural documents that determine:
• the beginning and the total duration of the project and its individual stages;
• the order and completion period of special events in the project;
• the logical sequence and interdependence of activities;
• the complete list of planned project activities.

We propose to develop such a corporate network. Corporate portals like Slack or Asana are examples of such networks. This network will allow publishing news, communicating, creating business processes and calendars, as well as monitoring these business processes, reviewing the labor costs reports.

DAO members should be allowed to determine their working hours, because they are the lifeblood of this DAO. Deadlines can be set in DAO task trackers. Sometimes a DAOist can and should switch roles in order to learn how to support each other in difficult times. The members should feel like part of the DAO. Thus, the awareness of participants will increase and turnover will decrease.

Bad Actors
Governor DAO together with Finnovant created a No-KYC Proof-of-Existence whitelist for unique identities with the purpous to build a universal sybil defense. The used technology can determine uniqueness of the user: "Using Finnovant's first-of-its-kind authentication technology, Say-Tech, users sign in with their Ethereum wallet to the web portal on Governor DAO's website. A camera and microphone is used to scan the user's face as they read a sentence. Privacy and security are paramount to both teams. No one can access the camera and microphone output but the owner. The information is checked against 400+ indicators and immediately encrypted into a unique hash. Thus, sensitive information is protected and it cannot be replicated. The hashes work similarly to public-private key pairings: even if one knows the hash (public key) they cannot decode the raw information (private key). Even if the user accesses the portal from a different location, device, under different lighting, the technology determines whether the user is unique. Users qualified as "unique" receive a non-transferrable ERC20 "Proof-of-Existence" token. The token is attached to the wallet permanently. Developers who want to reference this whitelist add a requirement that checks for ownership of this Proof-of-Existence token by the wallet interacting with the contract."
DAO administration is aware of the number of members in the system. So, in the case of the OS DAO, the whitelist is a list of each country's citizens. When citizens of Magonia come to the polls they provide their identity card. Here everyone has a unique hash, the authenticity of which can be verified by the zero-knowledge proof. With this in mind, we see PoE as a preventive security measure in the form of an auxiliary tool that affirms the uniqueness of actions and doesn't require KYC. In simple words, Magonia residents are the whitelist.

Each resident, in order to be able to perform any actions, once passes authentication, is qualified as "unique" and receives something like a multi passport (non-transferable ERC20 token), which is tied to only one wallet and one person and provides information on the user's actions. Each time a certain action is taken, they provide the multi passport and undergo additional instant verification (such as retina detection). Whitelisted accounts further serve as a fallback position: e.g. Colony uses multiple whitelisted accounts as a recovery mode to protect against malicious editing. (https://colony.io/whitepaper.pdf)

There is another option: Humanode proposes a sybil defense solution as it is privacy-preserving, self-sovereign, and Sybil-resistant at the same time. Humanode co-founder Dato explains: "Humanode combines state-of-art liveness detection protocols, FHEd multimodal biometric processing with constant proof-of-existence, special validator admission protocols, reliable devices and recurring costs to create a robust Sybil-resistance that would safeguard the system from spoofs and bypasses committed by bad actors." (https://blog.humanode.io/attack-on-sybil/) That is, in our case, an additional instant check before each vote/delegation, that does not need a third party as KYC is excluded.

As with every whitelist strategy there is the flip side of the blacklist implementation. Bad actors across blockchain are out of control and their number is constantly increasing. Defending against these attacks can be prevented by adding bad actors' wallets to the blacklist. The identification card inside the entire blockchain system contains information about persons refused entry to different countries. Hence the architectural complexity of the system will be prevented by maintaining a bunch of "black" or "gray" lists, and the identification cards of Magonians will be available for inspection, taking into account data increases. With the ID card it will be possible to vote in another country, if it is not against the laws of that country.

A pre-vote sorting mechanism is a way to protect against bad actors. Proposals can only be voted on when they have a certain level of support: a certain percentage of the total votes must be reached. What experience do DAOs have with voting outcome thresholds? For Michael from Curve a quorum-based voting makes sense, a large majority of proposals got through at Curve DAO. The negative impact lies in a chance of tactical voting. Clement from Kleros comments: "In a quorum vote, those who oppose the proposal will usually abstain rather than vote against it because it is more likely to prevent it from passing." ( https://coinyuppie.com/summary-of-optional-daos-voting-mechanisms/) The voting threshold for admitting voting candidates should be high enough to prevent manipulation, but optimal for fair competition and dynamic voting.

Establishing a "leading board of governance" is the easiest option is to disqualify bad actors from voting and being elected, while also keeping them members of the DAO without the right to be a candidate for the management of the DAO. From the citizens' point of view, withdrawal of a part of the blocked "MagoniCoin" from those who have staked the token / have voted (except for additional tokens, such as wages) disqualifies them from capitalizing.
Conclusion
This report provides the DAO Masters team's theoretical vision for the DAO mechanism architecture within the framework of Magonia.
The core concept is a mechanism for delegating one's Photon (governance token) to a competent party (Illuminated), that has high reputation and makes decisions in the DAO. The main advantage of this approach is the balanced cooperation of DAO participants, achieved by including Illuminated and all SOLARTREE members in a set, which enables participants to be directly involved in management. Hence, the mechanism is workable and guarantees successful functioning of all elements of the DAO (inactivity and loss of reputation results in the exclusion of participants from managing due to the lack of the required number of Photons), besides, instant fixation of voting results guarantees honest and qualified candidates whose policies reflect the opinion of the electorate. The Solarpunk DAO contains an inflation mechanism for the main financial token Neutrino, which ensures the full presence and involvement of all Magonia residents. To ensure continual activity of the decentralized infrastructure, an incentive system for validators has been developed, which stimulates them at all levels including network commissions; and linear mechanism for increasing the number of nodes depending on the capacity and bandwidth required. Thus, the key points in the OS DAO are: Magonian's reputation, knowledge and skills in certain areas, and social activity.