Web3: DAO and the ‘Blockchain Man’
The true meaning of the Decentralized Autonomous Organization
How Web3 puts the ‘Autonomous’ in DAO
The DAO, the decentralized autonomous organization, is a core concept in Web3.
When speaking about DAOs we often focus more on the ‘decentralized organization’ part, and less on the ‘autonomous’ element. However, arguably the most important characteristic of the DAO is actually the ‘A; the autonomy of the decentralize organization.
Decentralized Organizations (or ‘DOs’, as we may call them) have existed for a long time. From educational institutions to political parties to corporations, organizations with distributed governance structures can be seen as DOs. They are more the norm than not, and operate on the basis of decisions being taken by a voting majority, rather than by a single, autocratic leader. This distributed type of governance structure embodies the spirit of decentralization, and as we can see, the concept of decentralization has existed long before blockchain and Web3.
As a word, ‘decentralization’ could be mistaken to mean ’without center’, but actually lends itself to the concept of distributed centers, where power does not lie solely in one centralized place.
The essential evolution that Web3 brings to DOs is in adding the ‘A’, the autonomous quality to decentralized organizations, evolving them from DOs to DAOs. The key change is that governance structures are set in place by rules created in advance on the program, and DAOs operate automatically under these rules using the blockchain. This makes the autonomous nature the essence of the DAO, and through programming autonomous decision-making structures, we can make organizations work more efficiently.
Concave VS Convex Decision Making
In order to understand why DAOs are a key part of Web3 and the evolution of governance structures, we first need to understand that decision-making processes can be divided in different ways. For this example we’ll focus on Concave and Convex decision making structures. As the graphs above show, given options and decisions, in the convex view the advantages dip when a policy is chosen, and in the concave view they heighten during the decision.
A good illustration of Convex’s case is conflict. In the beginning of a conflict beneficial outcomes continually diminish and are at their lowest when decisions are made by leaders or the participants (the main decision on each side being whether to participate in the conflict). Once policies are implemented, gains can increase (either by the victory of one side or cessation of hostilities, for example).
Concave, on the other hand, refers to situations where returns can increase during decision making or policy choosing. A simple example can be seen when a group of people go out to a restaurant for dinner. Everyone may agree that it is better for all participants to decide on what to eat together, at one time, maximizing output and efficiency during the decision making process.
Due to the diminishing returns after a decision is made in the concave worldview, when allocating resources, like determining the distributions of R&D budgets for example, it is often more reasonable in the long run to allocate resources to various fields (artificial intelligence, blockchain, quantum mechanics, etc.) rather than focusing all resources in any single area. This way diminishing returns can be mitigated through broad resource allocation. This also outlines the fact that rational decision-making does not always have just two options.
There are, of course, decisions which will require a simple binary response only (a ‘yes’ or a ‘no’), but there are many other decisions where any number of options between binary extremes may produce better results.
For our purposes in Web3, the smart contract (the automatically executing blockchain-based programme) can be added to the decision-making process in the concave worldview, where various potential options could provide a solution to a given problem or decision that needs to be made. In a given decentralized governance structure, where the decision-making process may be naturally less efficient because of the higher number of people involved in the process, smart contracts can be utilized to combine options to make more efficient and rational decisions.
Blockchain Man
The Blockchain Man is a concept that represents the role of humans in an autonomous, Web3 world. In order to understand the idea of the Blockchain Man, we must first understand the traditional concept of the Organization Man. The Organization Man is used to describe an individual who subordinates their personal goals & values to the demands and culture of an organization. In this concept an organization is regarded to be of far higher importance than the individuals that comprise it, lending itself to the consequence that people within the organization are replaceable. The concept begins with the idea that an organization is the culmination of all creativity and human output, and humans are only replaceable parts of a larger, far more important whole. The Organization Man is an idea which diminishes personal identity and importance, along with the essence of what it is to be individual as a human.
What we can compare and contrast to the Organization Man in the age of Web3, is the Blockchain Man.
If you were the only human being in a smart city, an autonomous city built with nothing but machines, you may feel like a being with some importance, not just a mere part or cog in a large machine. This is the process of becoming a Blockchain Man — a free-thinking, individual human among autonomous programmes and protocols. As technology advances people may begin to feel more like parts, as opposed to individuals. With the development of artificial intelligence specifically, it may begin to feel humans have a diminishing role in a world increasingly filled with intelligent machines.
This, however, may not be the case. In a highly advanced technological world humans will play the role of the ultimate source of creativity, as ‘the only thing that thinks.’ As advanced as artificial intelligence and Web3 may be, in a world where each transaction and each block is completely protocoled and programmed on the blockchain, where machines process code and turn mathematical expression into understandable language, human creativity can shine through via thought, emotion and unexpectedness.
This is the connection between human and machine in a DAO. When everyone participates in the community for different reasons under a programmed decision-making organization, the more humans with self-sovereign identities, with their own forms of creativity and unique thought, the healthier the DAO becomes.
How should a DAO be made?
A common view of some of the DAOs in existence today is that they’re just a few overhyped communities without the actual focus of autonomy or decentralized governance, only carrying the name ‘DAO’ to capitalize on the popularity of Web3. A DAO’s core strategy is to ensure distributed governance, and that the various Blockchain Men under the self-organizing and autonomous program are able to fully exercise their unique qualities as thinking, feeling, creative humans.
Jesse Walden of a16z introduced progressive decentralization; a strategy positing that while community participation & decentralized governance are the ultimate aims of any DAO, fully decentralizing from the outset is to convolute the path to success and ultimately harm the long-term health of the DAO, its products and its community.
The progressive decentralization model lays out three stages to successful DAO projects; 1) product/market fit, 2) community participation and 3) sufficient decentralization (community ownership).
On the way to full decentralization, many DAOs often make the mistake of delegating decisions to their communities too quickly. In the beginning of a project, core teams must develop services and take important decisions with less input from the community. This is to ensure expediency & efficiency of growth, while gradually introducing community governance into decision-making processes. This is until community members are involved enough in the DAO for it to become a true autonomous organization, and DAO participants become reflections of the true Blockchain Man, with the sufficient autonomy to be able to make concave and convex decisions based on the merits of each situation rather than relying solely on decentralized decisions.
New DAO and projects should be wary not to follow the failure of the Organization Man by following the ICO boom of ERC-20, where cryptocurrency coins were launched without justification, utility or clarification as to where and how they could be used (and indeed, if they had any use at all). A better path to DAO success may be through ERC-721, the Ethereum standard for representing unique non-fungible tokens. This can represent the true path to the Blockchain Man, where humans can mint their creativity on the blockchain and maintain their unique individual identities through DAO structures.
AI Network is a decentralized AI development ecosystem based on blockchain technology. Within its ecosystem, resource providers can earn $AIN tokens for their GPUs, developers can gain access to GPUs for open source AI programs, and creators can transform their AI creations into AINFTs. The ultimate goal of AI Network is to bring AI to Web3, where everyone can easily develop and utilize artificial intelligence.
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