How to classify DAOs according to their mission? — Part 4: conclusions
The goal of this writing was to classify DAOs according to their mission (see part 2 and part 3). We showed, that a DAOs “purpose” is one of the most important aspects of DAO assessment. However, there is no common understanding of DAO missions. By comparing the categories of different DAO websites, we found seven common ones: collector, grants, investment, protocol, service, media, and social.
It’s important to mention, that it’s rather rare when a DAO fits into just one mission category. DAOs are a diverse phenomenon, and every DAO is unique. Thus, it occurs that a DAO is close to two or even three categories. The mission statements are therefore to be understood as ideal-typical.
During the process we found several similarities with previous research: DAOs, by definition, leverage blockchain attributes to organize a community in a decentralized and autonomous way. Among them are e.g., transparency or tokenization. We agree with the findings of Rikken et al., that nearly all DAOs (even though it was not a distinct category for every mission type) share two key elements: They incorporate shared governance with voting (“trusted notary functionality”) and some sort of value transfer (“storage and transfer of value functionality”) (Rikken et al. 2021, p.5).
That members pool together funds or resources and vote about their use was present in all the descriptions. What the mission of the DAO defines is rather the scope of the proposals or the options to vote on (in a grants DAO where to donate, in a service DAO for who to work for, etc.). Accordingly, the goal of a DAO is to decide as a community how to support its mission with the given resources. The mission or purpose of a DAO, therefore, is not just a characteristic, but the conceptual framework a DAO is built.
In line with Turley’s conclusions, we observed, that DAOs that have a financial focus (whether they are non-profit or not) tend to have a more formalized governance process. In this case, these are especially the mission types collector, grants, and investment, since they allocate the funds of their members. Except for grants DAOs, the descriptions indicated a for-profit orientation and emphasized the need for a shared governance process (see Table 9).
Protocol and service DAOs typically also need a shared treasury, even though they are not directly investing the money of members, but rather leveraging a product or skills. For these mission types, the descriptions pointed out the shared governance as well.
On the other hand, media and social DAOs usually have a non-profit aspect. Their mission rather leans towards community-building or impact and education. They can also operate off-chain. It is therefore disputed whether they are DAOs (in the sense of “autonomous” organizations) (cf. Rikken et al, 2021).
These community-focused DAOs are often characterized by strong member engagement, perhaps because these are the types in which the mission comes through most strongly. It would be interesting to research further what constitutes these types of DAOs. We concluded that the value transfer and notary function of DAOs seems to correlate with each other. A financial focus often goes hand in hand with a more sophisticated governance process.
On a higher level, the mission types are also consistent with the purpose characteristic of Welpe&Ziegler: while collector, grants, and investment DAOs could be summarized under “investing or fund raising”, protocol and service DAOs deal with “product building and management”. Media and social DAOs, on the other hand, operate in the field of “community building and engagement” (cf. Ziegler & Welpe, 2022, p.9). Just like with “product building and management”, in our case, protocol DAOs were the most frequent mission type.
Thanks for reading!
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Other parts of the series:
Part 1: existing classifications
Part 2: comparing DAO explorers
Part 3: compare descriptions
Sources:
- Rikken, O.; Janssen, M. & Kwee, Z. (2021). The Ins and Outs of Decentralized Autonomous Organizations (Daos). http://dx.doi.org/10.2139/ssrn.3989559
- Turley, C. (2021). DAO landscape. Mirror Coopathroopa. https://coopahtroopa.mirror.xyz/_EDyn4cs9tDoOxNGZLfKL7JjLo5rGkkEfRa_a-6VEWw
- Ziegler, C. & Welpe, I. M. (2022). A Taxonomy of Decentralized Autonomous Organizations. ICIS 2022 Proceedings. 1. https://aisel.aisnet.org/icis2022/blockchain/blockchain/1
