Maybe if we tried working together we could ease some of the tensions...
but we’re all pulling in different directions.
What is a DAO?
It stands for Decentralized Autonomous Organization.
Let’s break that down.
Decentralized: Not Centralized. Good? Maybe. Have you ever heard of Dunbar’s number? It’s something that comes up in crypto-circles where armchair economists wax Foucaultian over kombucha.
If you haven’t lingered long enough in the crypto space to understand the pared down philosophy we’ve memeified; Dunbars’ number is thought to be the maximum number of people you can meaningfully connect with. You can have around 15 meaningful friends, 50 acquaintances, then, including those 65 people — your social circle maxes out at about 150 people. These are people whose funerals you might attend if they died within a two hour drive, otherwise you’d send flowers. You can know more people than that, sure, but you don’t really understand their lives, ambitions and struggles.
How then, does a president, councilperson or mayor make decisions on behalf of millions? Decentralization says: you can’t, so don’t have one leader; have many — and give them autonomy.
Autonomy is the right and ability to make decisions for oneself. A simple concept that’s barely understood, if social media is any indicator.
Let’s say you’re throwing a potluck, you invite your 15 closest friends to bring whatever they want.
One person wants to bring their Thai peanut salad, but someone else is deathly allergic to peanuts, should everyone have to plan around this one person’s allergy? Does this detract from their autonomy?
No. Because the autonomy of the group allows it to make decisions for the health and benefit of everyone in the group ; if you think of the group as one giant, mutant person with fifteen parts you might say the Frankensteins’ Monster shouldn’t sacrifice their monster feet to stroll through fire. Fire is neat, yes, walking through fire is at least 100x more neat— but having healthy, undamaged feet is desirable. Now, instead of a fire-walking mutant conglomeration of individuals, imagine it’s an organization.
An Organization is definitely more than one person and probably more than two. This group of two or more people have the same goals, so they collaborate and share tasks — thus an organization.
Now, bring these concepts together and just DAO it.
Every roadmap these days has a DAO plan somewhere in there. From the first day of Lunifty, when we were still thinking of calling it LuneUnit or SpaceFace, we were asked when we would DAO. We said “Sometime in October maybe” because no one cares what happens at the beginning of the fourth quarter and hopefully everyone will have forgotten by then.
IF we DAO’d it, how would that work?
Making a DAO entails writing a system of governance which allows members to vote on decisions within the organization. First decide how your DAO will operate; What can be voted on? What incentives are there for participation? When will votes occur? Every DAO is different.
Then you need funding, you can do this by creating tokens that allow one to vote and participate in a DAO, you could give more weight to votes of high stakeholders or make all participants, regardless of the size of their share, equal in the eyes of the DAO.
Finally, release. Give breath to your creation and watch it change, grow or disintegrate. Anyone with the money and the will has a chance to alter the direction of the organization according to their desires, the counter-balance to self-serving interests now lies in the combined strength of those who are against them. The theory is that no one person can abuse the system since the combined control will result in decisions that benefit all participants. Did we just do democracy with a buy-in? Or, as we call it now: Democracy.
The key ingredient is the blockchain. DAOs are on the blockchain, where all transactions are logged and accessible to add a bit of accountability to the flavor. That’s right, we’re voting with transactions.
Now we don’t need to be subjected to Tyranny
Altruism will get you everywhere when it comes to shilling a DAO. People FEEL better about equal access, opportunity and getting a say.
Do you need a DAO?
Ever done a group project in school? Without a leader or someone who is capable of making decisions and distributing tasks, all the work usually falls to me, I mean, one person. In the risky science fair experiments of life, you need a Bunsen burner that your meager allowance simply won’t cover. Why not let Melissa, whose parents are rich, buy one for you? Melissa gets some credit, you get to make toxic slime, everyone wins.
In a DAO the participants have to be rewarded, why else will they do what we want them to do?
DAO’s aren’t all hollow appeals to investors, at least some of them aren’t. In a team everyone feels like they are the most important part, the keystone upon which everything hinges. A DAO can restrain the charismatic from shifting the goals of the quiet but pragmatic.
But what about the Normies(non crypto folk?)
Cryptocurrency, the word itself, has become a barrier between those of us who got into the space years ago and those who only hear about it in the mainstream news. Someone outside the space hears “Cryptocurrency” and they think Bitcoin, Quadriga or Dogecoin, a crypto-nerd hears “Cryptocurrency” and thinks blockchains, bridges, rugs, gas fees, utility, privacy, scams and a weirdly alt-right twitter community.
Apps like wealthsimple, robinhood and others have created an inlet to the crypto world but also create a tidepool to protect investors from the wider, deeper, more risky ocean of complexity. Can someone who bought Dogecoin with Robinhood figure out how to buy a custom token on Uniswap, do they know how to increase slippage or will they just give up?
DAO is vexing term — it sounds techy, complicated and something easier to disregard than to dive into. It shouldn’t require much background knowledge and a glossary of crypto terms to understand it’s basically a co-op on the blockchain.
Co-ops have existed for a long time, they’re organizations where the employees and clients are all shareholders, like Costco, but DAO’s are marketed as something new with a sesquipedalian twist. Without acknowledging the cryptoworld is re-using old formulas and structures in ways that utilize new technology we end up with a gap in understanding that grows wider with each new tool we acquire and re-brand.
DAO’s are tools, they’re old tools and they are useful tools — but they are not inherently good or bad. The existence of a DAO does not mean an equitable system that resists manipulation, but it can be a step in the right direction.
