True or not true DAO? — Resist the beginnings and consider the end

Markus Büch
Jan 2 · 4 min read

A short text which pleads for a common and open-minded view on the idea and the basic concept of the Decentralized Autonomos Organization (DAO), which in my view is based on openness, participation, neutrality and sustainability.

By shutterstock.

A short introduction to prevent an unfortunate development

The concept of the DAO is in an important phase. More and more projects are emerging (more details by Pat Rawson here and there) and the number of DAOs is growing (for a short overview of the so-called “Top DAOs” see here). Also a lot of discussions about the conceptual, economic and legal classification are intensifying.

However, I feel a conventional, party mentality is taking place and a kind of camp thinking is becoming more and more apparent. When I dive into the DAO space, I come across statements like “DAOs are Ethereum native organizations” or the not-so-strict opinion that a structure “without Smart Contract” or “without Blockchain” cannot be called a Decentralized Autonomos Organization. It is to be avoided that the DAO community splits up like the crypto community did. There, the groups of Bitcoin Maximalists and Alt-Coiner (aka Shitcoiner — and please be honest: a large part of projects more than deserve this name) are now irreconcilably against each other for an indefinite time. Both parties claim the absolute truth for themselves, and the respective counterpart is no longer just objectively criticized, but vilified and discredited. Obviously there is no longer anything that unites the two sides. And when two “persons” quarrel, it is usually another “person” who profits from it and maybe the another one is the regulator.

Long stoty short: A splitting of the DAO community would be counterproductive and could endanger the further development and spreading of the DAO idea. Please resist the beginnings and consider the end.

A small manifesto of the core values of the DAO idea

It is often said that the concept of DAO can make the world a better place (e.g. DAOs and the future of work by David Passiak). However, on closer inspection, old habits come to the fore, such as closeness, plutocracy (see also Eric Arsenault who writes about the problem of the capitalist spiral in: Values-based DAOs), antisocial structure or protection of minorities (a basis is made by Sebastian Gajek with his text about “Robust Consensus Protocols for the People”). As I have already tried to show elsewhere, for me the DAO idea has the potential to be a new kind of technology-neutral organisational structure that could bring about a paradigm shift in the field of organisations. But before considering this, it should be thought about the foundation of the DAO concept.

In my opinion this basic concept (1.) could have a unifying character, because the bigger a movement is, the more it can change. A discussion about a “true DAO” has the opposite effect. For me, there is no reason to exclude from the beginning Bisq (for more details about the Bisq network see the article by Stefanie von Jan) or even comparable analogous structures for organizing collective action. The idea of cooperatives or the concept of the Purpose Economy have much in common with the DAO model. Especially if we talk about the DAO as a kind of an ownerless organization.

This concept could (2.) be neutral in its structural core, so that it can be established anywhere in the world and independent of actual circumstances, and so that everyone in the world can use it. However, if the DAO concept can only be implemented with specific resources, this unnecessarily hinders its further development and spreading. Doesn’t the DAO-concept do based on the Open Source idea? On the one hand, there are complaints about incompatibilities of the major platforms, but on the other hand, the DAO concept is inseparably linked to Ethereum?

This concept should (3.) be open and integrative, because life is colourful and the people’ fantasy knows no limits. In particular, organisations are usually created out of specific needs and have individual purposes. Especially the technology side of the DAO idea offers new and powerful possibilities. Also the specific use of Smart Contracts can solve problems of today’s organizations. But there are also many issues that an organization which depends on Smart Contracts and a P2P network cannot solve. The combination of actual and technical features can possibly achieve much more than a de facto limited system.

This concept should (4.) also set minimum standards to establish trust and seriousness. If, for example, a DAO is intended to solve real issues or to act as a vehicle for a real business, the DAO must be able to participate in business and legal transactions. This requires a minimum level of creditor and business protection. First steps are made. In addition, there is the issue of responsibility. It cannot be intended that a DAO should have unlimited freedom to act. The freedom of a DAO ends where the freedom of a DAO participant or a third party begins. And if a DAO (or its code) consciously or unintentionally crosses these boundaries, then no trust is created when the injured party is told: “Sorry, but it’s a DAO…”. That cannot be the aim. Btw: How do we actually deal with discrimination or inhuman behaviour like racism?

A little conclusion

With regard to the history and the further development of the idea of the DAO, there are, in my opinion, good arguments for the fact that it is an organizational concept that is essentially technology-neutral. Many aspects can be generalized and in this way a manifold design is possible. However, the characteristics in the form of decentralization, autonomy and also the core characteristic of an organization can be interpreted individually. There is not only one true DAO, there are thousands.

Markus Büch

Written by

Jurist — Researcher — FOM Berlin

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