Baldfaced, like other Hymenoptera, are haplodiploids; males result from unfertilized eggs and are haploid, having a single set of chromosomes. Females are from fertilized eggs and are diploids, having a full complement of chromosomes.
Baldfaced colonies begin with the queen; she mated in the fall and hibernated through the winter in a crevice or under bark. In the spring, she constructs a horizontal comb within a 'paper' shell. She will defend and feed the first brood of eggs. When these have hatched and matured, they will take over defense, foraging, and construction of additional combs. From then on, the queen will only lay eggs and never leave the nest again.
The paper nest is constructed of chewed weathered wood. Baldfaced wasps are often found in large numbers scraping wood fibers from the sides of poles, posts, or old buildings. The workers are considered beneficial since they prey on other insects, particularly caterpillars that are nuisance pests in agricultural areas.
In the autumn, the queen will lay the next generation of queens and unfertilized eggs, the males whose only purpose is to mate with these queens. When the young queens and drones have left the colony, the founding queen dies. Eventually, all members of the colony die with the advent of winter. Only mated queens survive the cold.
Baldfaced hornets can sting multiple times and will aggressively defend their colony. They are best left alone.
The University of California Agriculture and Natural Resources has produced an excellent publication on social wasps, including a drawing of a subterranean yellowjacket's nest. The nest is identical to the aerial-nesting baldfaced's except it is within a rodent den or other hole in the ground. To learn more about social wasps, click on the link:
http://www.insectstings.co.uk/pdf/yellowjacketsandsocialwasp.pdf