What is a DAO: Illustrated

DAOs are supposed to be the next big thing, but we’ve seen some big news recently where DAOs have failed to meet expectations. Some DAOs simply can’t keep running because of mismatched incentives, some DAOs go rogue!

So why are people still so interested in DAOs? Fundamentally, they provide an interesting, automated, code-able way to organize groups of people who don’t know each other. In a lot of ways, it’s a re-imagination of many of the social and legal constructs we’re already familiar with, like C-Corps or LLCs.

I read a bunch of articles about DAOs, and at the end of the day, they all said pretty similar things, just in different ways. Here’s my effort to summarize what a DAO is by comparing it to concepts we’re already familiar with.

What’s particularly interesting and a topic I want to spend more time exploring, is leveraging things like zero-knowledge proofs to expand on addressing that bottom right square. LMK if you have any great resources!