Chapter 1 — The DAO of Mochi

Wake up, Mochi . . .

(⌐■_■)< What if I told you that everything you think you know about DAOs is a lie?

Kind of an odd thing to lie about, no? >(QwwQ)

(⌐■_■)< Sorry. Let’s back up. Lie is a strong word. I don’t think anyone’s been lying to you about DAOs. It’s more that you’ve been misled into thinking something about DAOs that could not be further from the truth. What truth you ask?

I didn’t say anything. Why are you wearing sunglasses indoors? >(QwwQ)

(⌐■_■)< …I…I thought…

? >(QwwQ)

( n_ll)>⌐■-■ < There. Happy? Can I continue or are you going to keep interrupting?

Not the word I’d use to describe it, but sure, carry on. >(QwwQ)

( n_ll)< Where was I? Oh right… The Truth. Well, the Truth is…

…

..

.

Oh, the suspense is killing me. >(QwwQ)

( n_ll)< …that DAOs already exist.

Uhhh…duh? >(QwwQ)

( n_ll)< No, Neo. DAO. D-A-O. That’s right. Decentralized autonomous organizations are everywhere, all around us.

Will you cut it out with the Morpheus crap already? Halloween ended yesterday. Plus, I already know DAOs exist. In fact, I own a couple. Here, let me… >(QwwQ)

( n_ll)< No, no, hold on a second. I’m not talking about the pagan, baby-eating kind, or the kind that leaks and causes hard forks. I mean the evolved sort of organization that, to everyone in the crypto space, seems far off in the distant future.

Oh, I see. >(QwwQ)

( n_ll)< Don’t believe me? Close your eyes for a moment.

Do I really have to? >(QwwQ)

( n_ll)< Yes. It’s important for visualization purposes.

Whatever you say. >(- ww -)

(- ww Q )

But how am I supposed to read with my eyes closed? >(QwwQ)

( n_ll)< Fine! Whatever! Keep them open if you want!

But imagine that you’re back in Japan, sitting in a sleek corporate office with aqua blue windows. The tailored suit you’re wearing is also blue, but more of a navy color, much like the suits seated next to you, across from you, and all around the oval conference table at the center of the room. It’s the year 2010. Your name is Akio Toyoda, fifty-three year old heir of the Toyota family, and head of Japan’s most innovative car — scratch that — company of the last century.

Sounds wonderful, doesn’t it?

Thrilling. >(QwwQ)

( n_ll)< Surprise! 8.5 million Toyotas with sticky gas pedals are unexpectedly accelerating on congested streets around the world, giving horrified commuters and pedestrians alike a decade’s early taste of the driverless future.

Yikes. I hate surprises. Remind me what the point of this visualization exercise was? >(QwwQ)

( n_ll)< This is a dressed up example of the kind of boring case study professors give to undergrad business students in their first year of accounting. Business schools like to use stories like this one to present management concepts like decentralization in a way that forces you to take an abstract theory and apply it to a real world situation. The case above (which really happened) goes on to inform the reader that the bodies inhabiting the other navy suits in the meeting room are those of similarly aged Japanese men, and that the organization structure of Toyota is extremely hierarchical. Forget what you think you know about that term for now — it’s another misleading concept that requires a good spanking another day. Suffice that it means the company is structured such that key decisions around a recall can only be made by the big boss in the leather seat. And that’s you.

Aren’t I lucky. >(QwwQ)

( n_ll)< Notice anything strange yet?

You mean other than whatever’s happening to your right eye? No. Enlighten me? >(QwwQ)

( n_ll)< Nowhere in this colorful, albeit highly summarized version of the Toyota case, which specifically concerns the notions of decentralization and autonomy, is there any mention of funding proposals or voting. Know why?

I’m starting to see a pattern here. >(QwwQ)

( n_ll)< Because moving money around simply does not matter if your organization isn’t productive and can’t mobilize fast enough to meet the rapidly changing demands of the market. It’s not that the proper allocation of financial resources is unimportant, but that it’s a secondary concern to any mass of bodies that’s trying to make its way out of a world on fire.

If you examine the Toyota case to its conclusion, you’ll learn that decentralization and autonomy are primarily concerned with two things: who gets to make decisions and where. Furthermore, there are no absolutes. As is often the case, it’s a matter of how much decentralization and when.

In Toyota’s particular situation, the individuals with the most relevant information about the accelerator defect, i.e. lower level regional managers, could have made a decision that would have saved the company several Camry-sized trunkfuls of cash and embarrassment. Sadly, they were unable to do so because of the rigid, centralized nature of Toyota’s organizational structure. The company would eventually rectify this mistake, recall millions of cars, and make adjustments to their matrix of decision-making authority, but not before taking a massive reputational hit to the the Toyota name that required nothing less than a full bow in front of the public.

It follows that the most effective DAOs — whether it’s Toyota or literally any company that has existed for longer than a decade — are only DAOs when they need to be, and more than anything, must strike a proper balance with the demands of their immediate competitive environment. These recognizable companies just aren’t called DAOs because…well, I guess they don’t have enough convoluted crypto voting schemes that no one will ever use attached to their organizational architecture.

Oh boy. Here we go!>(QwwQ)

(* n_ll)< In fact, the concept of a DAO is not only being weighed down by these naive, techno-centric approaches to g̶o̶v̶e̶r̶n̶a̶n̶c̶e management, but by even more outlandish, tripped out views of next-gen organizations as these transcendent, stateless entities that have somehow reached source code nirvana and are no longer actively managed by humans, but instead, by mutant AIs running on the backs of rat-brained prediction market traders looking for their next hit of Dimethylcryptamine.

Oof. Tell us how you really feel! >(QwwQ)

(* n_ll)< I mean look: it’s not that I think this Geomancerian, OmegaGo for World President future is impossible — it’s just not going to be all that likely if the Ethereum space can’t get its 💩 together.

No stopping this train now! >(QwwQ)

(* n_ll)< We need to figure out how to get out of this bleak and dystopik cyberpunk r̶a̶b̶b̶i̶t̶ hole, make our organizations healthy and productive, and do something more interesting with the blockchain than bloody DeF…

Sure you want to go there all in one post? >(QwwQ)

(‘ n_ll)< You’re right. I’ve said too much. Let’s save that for another day.

(づ｡◕‿‿◕｡)づ < Want more Qawaii? Follow us on Twitter here.