On the Future of DAO Tooling: Does your DAO Need an IT Department?
IT Department? Are You Serious?
After reading the title of this article, you may be thinking, “What a minute. I thought DAOs were supposed eliminate corporate bureaucracy. Why do they need IT departments?”
OK, let me explain. I’m a founding member of Karamela DAO. Like most DAOs, we are a 100% virtual, global organization, and we rely on software for every aspect of our operation. Looking at our software stack, you can see that its pretty complex:
That’s 19 apps, not counting treasury management (which we haven’t implemented yet). And this problem isn’t isolated to Karamela. All DAOs face the same fragmentation problem with seemingly endless choices:
And because we are so early in the lifecycle of DAOs, this landscape is in a constant state of flux. New tools are launching weekly, while others pivot or disappear.
Why This Matters
Now here’s the challenge for DAOs like ours: no matter how useful each of these tools may be in isolation if they aren’t curated carefully several problems can result:
- Onboarding friction — With so many tools, hew members must learn about the existence of each one, what it's used for, and how it works.
- Fragmentation — Members must remember which tool to use for which purpose and how to access it.
- Redundancy — If not chosen carefully, tools may have overlapping functionality, causing more confusion.
- Tooling quality – Because the market is in its infancy, many tools are in beta, buggy, or lack key features.
- Emergence of new tools — With new and better tools continually launching, it's easy to miss out on opportunities to optimize our stack.
So how are we solving this problem? Yes, by creating an IT Department! Or more specifically assigning a person to the role of IT Director. Similar to a corporate IT Director, they will be responsible for:
- Evaluating the current toolset
- Recommending changes to our stack
- Ensuring integrations between tools are properly configured
- Evaluating new tools as they come to market
- Procuring and managing tooling budgets
- Assigning admins for each tool
- Creating and maintaining documentation so members know which tools are available and how to access them
How much time will this require? We don’t know. We are a young DAO, and everyone is part-time. Initially, this could be a heavy lift but it should get less time-consuming as our stack is optimized and stabilizes.
What Does the Future Hold?
So where do we go from here? Will DAO tooling always need this much oversight? Unfortunately, I think this will be the case for the next few years until the ecosystem matures. In the short term, I think the current explosion of innovative point solutions will continue. Long term, here are a few predictions:
- Consolidation will occur. There will be fewer, but better tools.
- A set of “standard” stacks will emerge, comprised of tools that work particularly well together.
- Integrations between tools will become easier to configure and more reliable.
- Integrated platforms will emerge, incorporating multiple layers of the stack. Think of these as the Salesforce or SAP of DAOs. These big enterprise companies maybe even enter the market.
What are you seeing in your DAO? How are you managing these challenges? What do you think the future holds?