Decentralized Autonomous Organizations (DAOs) are made up of individuals aiming to work towards a common cause, such as building a successful DeFi protocol (ex: Uniswap, Balancer) or proliferating the aesthetics of a meme (ex: Nouns, DAOge). The cause could be virtually anything, and it might change, but how does one judge how much a DAO has grown towards achieving its cause? What does the evolution of a DAO as an organization look like on its journey towards achieving its end goal? What are a DAO’s needs and what do they culminate in? These are important questions to consider if a community wants to better understand how to self-organize effectively and grow in a sustainable way.
One mental model that we could try to apply to categorize and think about a DAO’s needs is a pyramid with increasing levels of importance, like the visualization of Maslow’s Hierarchy of Needs theory.
Abraham Maslow proposed this psychological theory the 1940s and its grown to become a powerful influence within the world. The theory states that human beings have a hierarchy of needs that must be met in order for an individual to achieve self-actualization, or the realization of one’s full potential. The needs are arranged in a pyramid, with the most basic needs at the bottom and the need for self-actualization at the top. The five levels of needs are:
- Biological and physiological — food, shelter, and clothing
- Safety and security — personal safety and financial security
- Love and belonging — companionship and acceptance
- Esteem — self-esteem, respect from others, and the ability to achieve goals
- Self-actualization — the realization of one’s full potential and the desire to become the best one can be.
This model is particularly interesting in our case because one can think of a DAO as an organism made up of many individuals coordinating together to solve a problem. What is this “higher-level” organism’s hierarchy of needs? Is it possible to map the needs of an individual human being to those of a DAO?
- Let’s start with the base level, a DAO’s equivalent of biological and physiological needs. Given that “organization” is a core part of the name DAO, the formation of a community and social consensus layer around a meme or an idea is the fundamental need that must be met for a DAO to exist as it’s what gives any DAO purpose, a biological need. Let’s call this biological, base level need, Social Consensus.
- Although one could group biological and physiological needs together when it comes to an individual, it makes sense to separate them for DAOs, since physiologically there is large distinction between a community’s activity at the social layer vs the structure that activity acquires once having transitioned to the blockchain. Let’s name this physiological equivalent, Structure, as it is often defined by a protocol’s deployed smart contracts, a deployed token used to align the community’s stakeholders, and community’s collective onchain actions.
- Onchain Consensus, Governance, and Risk Management is how social consensus decisions coupled with onchain structures can affect large collectively owned property such a DAO treasury’s contents or protocol smart contracts and parameters. A strong token liquidity pool is an important characteristic of robust governance because it enables the DAO to readily onboard new members while enabling disgruntled members to easily exit the system. Treasury management enables a DAO to fund its operations and development efforts. Strong risk management plans and a clear understanding of the legal and regulatory environments will enable DAOs to effectively fight off existential risks. The effectiveness of the above practices comprise a DAO’s security as an organism at the physiological and financial levels.
- Protocol Adoption is critical for the growth and resilience of any DAO. It’s the equivalent of an individual feeling love and belonging — some DAO affection in the form of a protocol’s growing utility, integration, and contributions.
- Memetics is how DAOs make a name for themselves in the world and it can exists outside of pure protocol adoption. Its how DAOs compound their esteem, and why many in crypto associate Uniswap with the canonical AMM (Automated Market Maker), why Zora Zorbs are taking over visual language, why the Olympus (3,3) forks became one of the biggest memes during the last bull run, why extreme sports athletes know what Nouns are without owning one, and why Balancer’s Liquidity Bootstrapping Pools (popularized by Fjord Foundry ;) are a standard for launching a community’s onchain beginnings.
- And finally… The end goal. The self-actualization that many DAOs would likely strive towards was very elegantly described by Jacob Horne’s essay on Hyperstructures: building out a protocol that has been developed to run for free and forever, without maintenance, interruption or intermediaries, that keeps accruing and returning value to its community.
And voilà, our mapping of a DAO’s Hierarchy of Needs is now complete.
One thing to note is that similarly to Maslow’s theory, these needs are not mutually exclusive, and that DAOs may be motivated by multiple needs at the same time. Below is an alternative visualization of Maslow’s Hierarchy depicting one’s needs as coexisting and being pursued in parallel. A similar diagram would apply to DAOs.
Now that we have a framework to map and think about the needs of a DAO it would be good to understand what constitutes stability and growth within each of these levels, and what are unhealthy states that could lead to failure. How do we grow these DAOs and how do we build healthy DAO 2 DAO networks?
Inspired by:
https://jacob.energy/hyperstructures.html
Contributing to Alchemist: https://github.com/alchemistcoin
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