DAO = Decentralized Autonomous Organizations. An organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government. -Wikipedia

DAOs are essentially Limited Liability Corporations (LLCs) with a twist.

By participating/lurking in these various DAOs that have peaked my curiosities, there are a few observations that I’ve seen in these communities that are pretty fascinating and found some aspects that leave much to be desired.

  1. Not all DAOs are communities
  • A lot of them aren’t really ‘communities’ even though there is often perception that there is. Having a Discord server is just step one in building up that community
  • FUD and speculation often exists in most of the channels but the servers that have a decent amount of moderators usually control this banter a bit more from getting out of control. There are members who do a good job of pushing these conversations into the right buckets though.
  • Without someone potentially helping guide you through the mechanics of the DAO and even the server for that matter, it’s easy to get ‘lost in the sauce’. Referencing the ‘resources/FAQ’ is not enough. Looks to me like customer success. If DAOs can successfully crack this code, adoption is likely to skyrocket.
  1. Fully Decentralized DAOs are incredibly slow

  • While counter-intuitive, having a full democracy leads to pure chaos. Often there are a few folks who harp that the DAOs need to exercise more community feedback for every single decision, whether big or small. While it does have a lot of merit, the downside is speed especially when actions are time-sensitive. For example, when Constitution DAO was trying to buy the last remaining private copy of the Constitution, there was a lot of back and forth to figure out how to refund everyone’s dollars when the bid failed. Without leaving the digression to the core team, the participants wouldn’t have likely been able to receive their refunds until months after. Centralized vision and some level of operations look to be necessary here to be effective

  • Conversely Olympus DAO and Time Wonderland are more or less dictating from the top down. They are both different given that Olympus is a bit more decentralized on approach versus Dani, but the pace of their efforts seem effective.

    • Policy updates for Olympus DAO are a bit more structured and often discussed in the forum before it goes to snapshot for a vote. I like this set up given that it allows members to ask q’s to stakeholders about the partnership or thoughts behind the decision-making. I’ve seen some productive conversations that did alter the path of one policy.
    • Time Wonderland’s policy updates seem a bit more limited with the community putting their trust in Dani’s decision making. There are really only two policy that Wonderland had implemented, seemingly afterthoughts. However, the fact that there are finally policies in place that allowed the community to vote through is leans closer to how a DAO should be operating.

    It is interesting to watch how these two operations are rolling out and subsequently the types of responses and banter you’ll see on Discord. Then at the end of the day, does it really need to be a DAO? Is that the best way to leverage the the utility of the tokenomics? I’m not too sure yet.

  1. Product + Communications + Onboarding are the most important things for the DAO
  • Product: This is ultimately why we join a lot of these DAOs, are we buying a Constitution? Golf course? NBA team? Mcdonald’s? the new web3 foursquare? Becoming the reserved currency of all of crypto? etc. etc. Wherever our interests lie, choosing a product to participate with is the crux of the decision-making here. Otherwise it’s just a group full of degens.
  • Communications: Having a strong communication framework especially in current times of severe FUD have proven to be critical in making sure the members aren’t participating in the FUD just as much. There are various projects that are trying to up improve their comms given financial pitfalls that are cascading in the market where some of these projects looks like they’re chasing zero versus months ago where little to no comms was ‘fine’
  • Onboarding: There is a massive need for more sherpas + guides to help onboard newbies to the project. Given that crypto generally is limited to the few. It requires serious work and framework to help onboard these folks into the fold. On top of that, these projects are moving at lightning speed so context can be lost almost instantly unless people are sitting in these AMAs, Twitter Spaces, Discord voice channels all day. It simply isn’t a sustainable model.

These are my observations so far regarding these DAOs and I look to continue refining my thoughts and update as my involvement gets deeper in these budding communities.