DAOs

The concept of a Decentralized Autonomous Organization (DAO) describes an organization which conducts aspects of its decision-making and the execution of those decisions on the crypto commons. A DAO that is effectively decentralized should limit the degree to which the organization relies on specific individuals arranged in a hierarchy, and could derive robustness to various weaknesses or forms of attack from this.

Blockchains excel at imposing rules on participants’ actions, they are excellent bureaucracies ¹. The flexibility of software means that it is possible to encode a wide variety of interaction types within a system. A DAO can embed some of its organizing principles in code and ensure that they will be upheld by all participants in a way which is robust and efficient.

The Decred and Dash projects described above have a form of DAO which governs certain aspects of the network and its development. In Dash’s case the method of selecting and funding proposals functions as a basic DAO. In Decred’s case the stakeholder DAO oversees the network and changes to consensus rules, while also signalling which programs of work the collective of contractors should be funded to work on.

Other projects strive to build general purpose DAO infrastructure that lives on a blockchain (usually Ethereum’s) and derives its reliability from this blockchain - but is intended to be useful in a variety of contexts to DAOs with different purposes.

Network DAOs exist because there is need for a decentralized way of governing and distributing resources in a particular context. DAO platforms exist because there are people who believe DAOs can be much more broadly useful as ways to facilitate trust-minimized coordination. In the absence of examples that demonstrate the productive use of DAOs for a variety of purposes, DAO platforms all implicitly have the task of seeking out productive use cases. Their success depends on identifying these use cases and serving them well. This contrasts with network DAOs, which are engineered to serve a purpose within an existing endeavour (running a blockchain).

There follow short profiles of some of the better known DAO platforms and a look at examples of DAO instances which use them.

References