Do Decentralized Autonomous Organizations (DAOs) need an IT department and CIO like a “regular” business?
Or who is deciding to use which software and tool to steer this digital-native and decentralized organization?
DAOs are a modern, more agile, more democratic (sometimes plutocratic) form of an organization. Organizations are created to unite people for a common purpose or objective.
Every organization today is heavily relying on software and digital tools to organize, automate and steer the company, business or club. Either through ERP, CRMs, or task management solutions. If organizations are still in an analog world and make steps reengineering their processes with the digital solution they make the transition to the digital transformation.
IT departments are the central unit inside those centralized organizations to drive and decide on digital tools. If in doubt, the last decision-maker is the Chief Information Officer (CIO).
Who is this person or unit in DAOs to decide what tools members have to use to participate and contribute to this organization?
DAOs are by definition not centralized and have no central decision-maker. They are run by code and community. The code ensures predictability and transparency, and the community is the governing body to decide on compensation, purpose, objectives, and everything related to the DAO.
Therefore, we can cross out that there is a central person or unit doing the decision on which tools to use, but…
How can DAO be run and which tools are available?
- First, you need a foundation and framework. Solutions like Aragon, Syncidate, and Open Law help on this.
- Treasury Management: Juicebox, Gnosis-Safe and Llama enable your DAO to manage treasury and the “money” your DAO has.
- Governance: Snapshot, Tally, and Boardroom help to manage participation and voting mechanisms.
- Communication and Community Orchestration: Discord, Twitter, Telegram enable discussions within your ecosystem, and user base.
- Compensation: Superfluid, Utopia Labs, and Coordinape help to reward contributions and your DAO members.
- Access: Guild.xyz, grape, and others help to manage access to areas only for your DAO members.
So in conclusion there are already tools and digital solutions out there that get used broadly but…
Who decides at the beginning which tools to use?
The clear answer is the founding team or founder. In the beginning, it’s one or more wallets with an idea to lay out the foundation for the DAO. They decide on which tool to use and how they will be interconnected and operate.
The advantage of decentralized software is that it runs very stable and with high uptime. So an IT department that manages the applications and runs them on Datacenters is not needed. Also, further product development could be done open-source and community-related.
But…
Who decides over the lifecycle of a DAO to use which tools?
And this seems to be the community. Members can vote on proposals for the DAO. So one proposal could indeed be to switch a tool and solution for another if the benefits laid out are reasonable.
As DAOs develop it became clear that also some sub-communities inside the DAO form to organize and orchestrate for example the development roadmap, compensation etc. It’s not unlikely that a subset will emerge that only focuses on finding the best DAO tools and lobbying other products to further develop capabilities and functions that the DAO needs.
Conclusion: In the end, you need to sell your DAO tool and solution to the community or a subset community that organizes itself to find the best tools and processes for their DAO
Outlook: As DAOs are quite new it will be interesting to see how sales and marketing processes need to adjust to selling tools and solutions to DAOs. Currently, approaches include yield farming to give members of a community the financial incentive using one tool.
