Contribution and Reputation-based Governance Structure

9 min readFeb 7



Metis is a Decentralized Autonomous Company (DAC)-centric platform to power the web3 economy. The Metis Stack is reputation based, highly customizable, and dynamic.

Governance is a critical component for collaboration and decision-making in a decentralized environment. We believe that contributors should govern the ecosystem based on the level of their contributions following the principle of responsibility for their decisions and accountability for the outcomes of such decisions.

The issues of current token-based governance

DAOs, decentralized autonomous organizations, have held a significant, grounded position in the web3 space for years. They are specifically characterized as autonomous and transparent entities governed entirely by the community. In this type of organizational structure, all functions present in the entity can be employed without the use of intermediaries or centralized authority.

However, there are some governance-related challenges that we recognize and plan to address:

One person — one vote

  • whale voting — one person has a disproportionate influence on the vote based on the number of tokens in possession
  • early adopters influence — due to lack of funding during the establishment of the organization, early adopters can be given substantial stakes through tokens, which gives them the same voting power advantage that whales have
  • vote sales — the ability to buy votes gives an advantage to people with funds
  • abuse of power by the voting delegates — voting delegates may have an opinion on the voting matter which is different from the person who delegated the vote


  • time to pass the initiative (proposals, voting, etc.)
  • low voting activity
  • inexperience or lack of knowledge in the area related to a specific vote
  • lack of responsibility/accountability for voting decisions — no reward/punishment mechanism based on the consequences of the voting

Compared to traditional organizations, DAOs rely on community-based governance. Decisions are made from the bottom up, and participating in the DAO (including voting) is typically based on token ownership instead of an individual’s place or ranking within an organization’s hierarchical structure. Instead of conventional employment contracts, token governance is managed by smart contracts.

The main issue comes from the DAO’s token-based voting system. DAO governance structures tend to use the 1 token = 1 vote system. Though this system can be considered democratized and a leading step towards decentralization, it is more susceptible to oligarchical control.

Users in these communities are therefore able to vote, make proposals, and earn revenue while leveraging decentralization, autonomy, and transparency without any centralized intervention.

The community-based governance present in DAOs is imperative in leading toward a decentralized future. But how much of the governance protocol is truly community-based? The truth is, DAOs in their current form aren’t completely decentralized.

In DAOs, governance tokens are typically sold in the open market, which enables voting permissions. Individuals in DAOs are also typically not limited to how many tokens they can buy. That means single individuals can buy a significant amount of tokens on the open market, giving them the upper hand in voting power. In many DAOs, a few individuals can make major decisions that affect the protocol’s direction.

In this regard, though there is no defined central authority, if decision-making is concentrated in only a few individuals, is the DAO still decentralized?

This leads to a few major problems. In one aspect, a large token holder without adequate experience can make decisions. A major reason why traditional organizations still use hierarchical structures split into “groups” or “teams” is to be able to execute expertise-driven decisions. An individual with inadequate experience or expertise can lead to poor decision making which has the potential to produce negative outcomes for the organization.

The largest concern, however, lies with the potential for the DAO to be overtaken by malicious actors and whales. Given that the users with the most amount of tokens have the largest share of voting power, control can be handed over to a few wealthy participants. This is not aligned with the mission of decentralization.

Some DAOs, such as ENS, attempted to work through this problem by creating a governance structure where members vote on qualified individuals who then handle the critical decision-making. This solution, however, goes back to our original concern by compromising the decentralized vision of DAOs.

In another aspect, there is a concern with the lack of token holders to vote on proposals. The more individuals there are to vote, the more founded the decision would be to benefit the entire organization. In other words, inactive token holders can disrupt the overall functionality of the DAO by not having high voter engagement.

DACs — a new opportunity

DACs, or decentralized autonomous companies, use a different system of governance. DACs can handle business functions especially well with autonomous functions such as administrative tasks, payroll, communication, etc. Companies are therefore able to launch their decentralized businesses easily.

In this system, unlike DAOs, governance is chosen by people who have a reputation for contributing and adding value to the organization instead of those who have the most governance tokens. Reputation is demonstrated in the form of badges or NFTs.

In this case, the value of DACs comes from the contributions of members, not the value of the governance token or organization as a whole as seen with DAOs.

Here, we can replace inefficient token-based governance mechanisms present in current DAOs with ones based on users’ actual contributions and local reputations. Contributors as a whole can govern, not just a selected group with voting power.

With DACs, we have two main goals:

  1. Prioritize the needs of real businesses by representing community members with web3’s shared values: accessibility, democracy, decentralization
  2. Provide the ability for anyone to create a web3 company, have full ownership over data/reputation, and utilize tools to collaborate with community members without third-party approval

Proposed Governance Structure

Competition is the law of the jungle, but cooperation is the law of civilization

~Peter Kropotkin

MetisDAO Foundation proposed a Reputation Power-based structure depicted above.

Everybody who wishes to utilize the Metis ecosystem can do so without any limitations. DAC is the “heart” of the ecosystem — it is a “business entity”, which can be represented by a person or a group of people. A person may choose to organize or join existing DAC(s). If a person would like to become a “citizen” of the platform (have voting rights and propose any changes to the platform), they need to become a Common by staking Metis tokens and accumulating veMetis. Commons then can fill a gap in the Metis ecosystem by identifying an area of need and coming forward with the proposal. Upon approval of the proposal by the MetisDAO Foundation and existing EcoNodes, that Common will become an EcoNode providing services to the ecosystem by filling the identified gap. EcoNodes are expected to have a business model, and be self-funded “atomic” entities in the Metis ecosystem. MetisDAO Foundation is expected to provide shared services to EcoNodes.

By staking veMetis Commons and EcoNodes will have governance power using the Upper and Lower Houses governance analogy.

Governance rules for becoming a Common/EcoNode and maintaining the status will be presented in the upcoming .

The ultimate goal is to empower cooperation and grow the Metis ecosystem to the benefit of every community member.

Partnership application form


veMetis is the governance token used in Metis ecological governance voting. It will not be available for purchase or trading.

  1. veMetis can only be obtained by staking Metis in DACs at the Commons and EcoNodes level.
  2. veMetis cannot be traded or manually destroyed (only the node contract can destroy veMetis).
  3. The corresponding proportion of veMetis will be destroyed when the staked Metis is withdrawn.
  4. During ecological voting, veMetis will be scanned and calculated at the DAC level to be counted as voting power.


As mentioned earlier, DAC is an individual-centric, decentralized framework to support and facilitate every person’s collaboration in the web3 world, which will be on-chain, Reputation Power based, and open for community members to co-build and co-govern.


Anyone in the community can create a DAC and become a Common by staking Metis tokens and accumulating veMetis for future decision-making power.

Why become a Common? Common members can make proposals and by doing so participate in the governance process.

You can invite other people to join your Common which increases voting power. You also have the freedom to choose which Common to join depending on your contribution interests, and you can quit if you are not satisfied with a Common’s decision. Common members who choose to quit lose their associated veMetis.

With this approach, every single person can exert their influence or have the freedom to choose which Common to support, which also provides a way for small token holders to gain leverage against whales.


Commons can grow into EcoNodes if they contribute to the growth of the Metis ecosystem and will fund themselves through a robust revenue model and outside investments.

EcoNode roles

  • Governance
  • Implementation

EcoNodes selection

EcoNodes selection will be discussed and decided by all the existing EcoNodes, coordinated by MetisDAO Foundation. DACs can apply, but applications will need to go through a governance rules-defined probation period to be qualified to become an EcoNode.

The qualification of EcoNodes

  • Professionalism in certain areas (skillset)
  • Clear and sustainable business model (EcoNodes will need to feed themselves, and not rely on MetisDAO Foundation to provide support.)

Have major contributions or play important roles in the Metis ecosystem. Examples of contributions are:

  1. increasing TVL
  2. transaction generation
  3. business lead introduction
  4. helping with tech development
  5. marketing, and more
  • Stake substation (to be defined) number of Metis tokens. As the platform matures, the number of tokens to be staked may be adjusted and will be defined by the governance rules.
  • Own the EcoNodes Reputation Power Badge, which is approved and issued by MetisDAO Foundation
  1. The contributions mentioned above will be recognized and demonstrated by various Reputation Power badges. When the EcoNodes make decisions, the Reputation Power represented by these badges will be calculated in the voting system.
  2. EcoNodes will have some initial RP badges to distinguish themselves from Commons and also act as the weight in voting. Then these EcoNodes will need to earn more RP based on their decision-making (an automatic mechanism) and also other contributions in the ecosystem (case-by-case, discussed and decided among all EcoNodes).
  3. More details on the rules of obtaining and maintaining EcoNodes Reputation Power Badges will be provided in the upcoming article

Governance rules

Governance rules are to be defined by all the EcoNodes involving Commons. More details on that process and two-layer (Upper/Lower houses — EcoNodes/Commons) governance to come in the , which will be published next.

Existing EcoNodes

Existing needs and challenges natively led Metis into the creation of the first EcoNodes:

  • DAC Portal is required to organize a DAC — a core entity in the Metis ecosystem.
  • Matrix (Reputation Power) is required to establish reputation-based governance.
  • Smart L2 is the core infrastructure layer the Metis ecosystem is built upon.


Matrix guarantees that businesses receive access to valuable, verifiable data, free of costly infrastructure, and users receive financial benefits and privacy peace of mind. We provide all-in-one privacy-driven IDaaS developer solutions that allow developers to focus on what matters most to their clients at a fraction of the cost. Users get incentivized by sharing data, and with the unique Matrix Reputation Power system, which allows gamification, developers can easily attract new and retain existing users. Welcome to the age of Democratic DataFi & IdentiFi.

Smart L2

Smart L2 is an Ethereum scaling tech infrastructure designed for the growing web3 economy. An EVM equivalence network that is fast, low cost and highly secure with the inherence of Ethereum decentralized security. Deploy, create and expand faster than before in a builders friendly environment.

Koris (DAC Portal)

DAC Portal is a solution for DAOs, web3 businesses, and internet native companies (web2 alike) to optimize the benefits of decentralized growth and on-chain operations.


P1X is founded by the early investors of Metis, which will be in charge of the Metis Asian community, marketing, incubation, and investment.

Metis DAC (MetisDAO Foundation)

MetisDAO Foundation is currently coordinating the resource allocation, marketing, events, and community among all the EcoNodes. Its responsibility is to make sure that the overall health of the ecosystem is intact and as such, for the time being, MetisDAO Foundation will have a veto right to any decisions affecting the Metis ecosystem.

During the implementation, MetisDAO Foundation will lead efforts to define and establish a governance process, and ultimately in the future, MetisDAO Foundation is planning to cede decision-making power to the community of the EcoNodes.

Timeline (Next Steps)

2023 Q1-Q2

  • First 4 Eco Nodes roll out
  • Governance rules v1.0 confirmed
  • Metis Improvements Proposal (MIP) rules confirmed
  • Governance Bluepaper
  • Test run

2023 Q3-Q4

  • Adding 1–2 more EcoNodes
  • New RP badges (contributions) are available