Game7 launching tool to minimize freeloading token holders

While it may seem that, because of their futuristic name, DAOs have advanced past some of the basic issues that plague all organizations, this isn’t the case. As explained by Game7 core contributor—and self-proclaimed “lead janitor”—Jonathan Allen, DAOs have a free-rider problem.

Many DAOs—groups of people who gather online to attain a shared goal—offer a cryptocurrency when launching to raise capital and attract participants. But sometimes this attracts people just looking to make a quick buck, not necessarily those who want to stick with the DAO long term, Allen told Fortune. 

This can create a problem for these DAOs later. For many, one token is equal to one vote on any proposals, so those who are first to acquire tokens can have an outsized influence over its direction even though they’re largely inactive. Because of this, newer DAO members may feel their votes aren’t having much of an effect and become discouraged from participating in the organization.

Game7’s new product, Summon, is meant to solve this problem by using a soul-bound token—a non-transferable type of NFT that can track a person’s reputation. The Summon protocol will assign each member of the DAO a soul-bound token, which then keeps a record of their participation and evolves based on how much they contribute.

The more a member contributes, the more XP they’ll get, which will increase their rank and voting influence in the DAO, and which could enable them to unlock additional rewards. These stats will all be tracked by the platform automatically, which also takes the weight off of core members to decide who’s actually pitching in.

“We think if we kind of implement this more nuanced system, you can fix a lot of those early balance problems, like hoping that the first 100 people in my Discord that bought the tokens are going to be engaged for five years and are going to contribute,” Allen said.

Summon was built by members of the Game7 DAO, and they will initially test the platform in a closed alpha on their own organization before letting others try it. But Allen said that the goal is to open it up as an open source program with a possible software-as-a-service model for special features.

Allen said that Summon is not meant to replace other tools DAOs use for operations, like Discord or the off-chain voting platform Snapshot, but instead exist alongside these platforms and help DAOs focus on their main tenets of cooperation and decentralization, Allen said.

“Summon really wants to meet your community where they are,” he said.

Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.