DAO does and don’ts

Part of DGov Council 2020
Host: John Light

Topic, Main Questions

  • An overview of DAOs, what is our experience with DAOs?
  • What hasn’t worked?
  • What has worked?
  • What are our new findings?

Agreements and convergence

  • With DAOStack there was far more cohesion at the beginning, when more people joined the shared vision and direction was lost
  • DAOs present new types of oligarchies, there’s an elite forming around the DAO projects, which leads towards a cartel of information
  • Not setting appropriate limits for the community to scale
  • Investment grant - expenditure - DGOV: don’t use the same governance scheme for different projects
  • Transaction security, tool to grant members more rights, inclusive approach and possibility for explore the market

Disagreements and challenges

  • DAOs are having a purpose. Sometimes.
  • A true DAI=Bitcoin. A perfect Democracy for elections (not a disagreement anymore)

Key learnings and conclusion

  • Some DAOs are granting tokens and are functioning as an incentive scheme
  • What is a decentralisation/autonomous element of DAOs?
  • DAOs are not thinking about how to be sustainable
  • New ways to fund work/ideas
  • Simplicity serves visibility and adoption but this is a conflict between simplifying and a wanted decision making process

Don’t work:

  • DAOs have over simplistic voting
  • Not good processes For signalling and creating good proposals
  • Hard to build cohesion in digital space
  • Some organizations have no reason to be on-chain
  • values/mission isn’t clear
  • Missing good in-boarding
  • Elite power structures forming and cartelization
  • Not putting in appropriate limits for the expected community scale
  • The purpose of the DAO starts to slip
  • Not any meta processes for dealing with bugs
  • Token whales dominate votes
  • Accountability for OKRs
  • Huge grants provided to proposals that are short/under - specified
  • When there is centralization, are the incentives aligned properly?
  • Are there conflicts of interest?
  • Are DAOs investment groups or non-profit/academia?
  • Don’t use the same decision making scheme for all decisions
  • DAOs aren’t thinking about long term sustainable
  • DAO claim to be non profit but have a token that is premised on for-profit valuation
  • Non profit DAOs should have nice welcome packages and community reinforcement to keep the community happy

Does work:

  • Long on-boarding for new members to occulture people
  • Having a clear purpose and neutral mechanisms for keeping focus on the purpose
  • Charting a clear vision and values
  • Start with a community, DAO later
  • Simplicity
  • Creating feedback loop so people know what’s happening
  • “High rate of metabolism” - info flows money flows engagements
  • DAOs as a concept has brought greet people together
  • Is Bitcoin a DAO? - A perfect democracy for elections/electrons
  • DAOs as a concept are giving people hope
  • Having a low barrier to participation once you’re a member
  • Living space for informal or primordial project/business ideas to find support
  • Possibility to have new models of decision making that are digital-native
  • Transaction security in a distributed network - asset management
  • Inclusivity
  • How do you trade off between simplicity and UX and the nuance necessary for complex decision making?