DAO Governance Is Not Like Sex

One of the great joys of DAO life is that you get to raise your hand to help with things you don’t have time for but are passionate about. Although I spend most of my time in the cryptoverse writing and shipping, I’m a total governance nerd. In fact, some of my frens know when I was a teenager I used to take notes during the State of the Union address, an annual presidential rite of political theater in the United States. There’s nerd, and then whatever I am.


I recently volunteered to write the draft temp check to begin the discussion around delegated voting in BanklessDAO. We’ll talk more about delegated voting below, but the TL;DR is that a token holder delegates their token to another wallet address presumably controlled by a person who is knowledgeable about, and active in, that organization’s governance. I said I’d have the draft in a week or two, and two months later here we are, no draft. Sure, it’s summer in North America, and we’ve been busy behind the scenes at Bankless Publishing, but there was something more to my delay than just daily triage and blue skies. And this week I figured out what it is. I can’t write about delegated voting without first having a philosophical framework for the discussion, and it turns out that for me it’s rooted in the difference between consent and consensus; zones of agency, autonomy, and authority; and how best to maintain action towards a vision while enabling people to discover and derive power from their secret heart. Fuck, trying to justDAOit right is complex.

One of the phrases that gets batted around in modern democracy is the idea that the government’s legitimacy and right to power is conferred by the consent of the people. In fact, this concept is found in one of the U.S.’s founding documents, the Declaration of Independence:We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,...

But as anyone who has spent time trying to organize people knows:


If Benjamin Franklin thought consent could be a deal breaker, he should try consensus. Wait, aren’t those the same thing? As it turns out, not in the least. In lazy language, consent means that no one is saying no, whereas consensus means everyone is saying yes. Although the difference may make or break your organization, especially as you scale, most people think about these things like this:

Thanks internets + Hiro
Thanks internets + Hiro

My introduction to the distinction between ‘consent’ and ‘consensus’ began with Ryan Anderson, who I met at Bankless Consulting (a wicked-smart gem of a gent), and my understanding solidified while helping to ship an interview Ryan did with Sam Spurlin of The Ready. In that interview, Sam discusses the distinction, and he says it way better than I ever could:

Consensus-based decision making involves a group of people agreeing it's the best thing to do…Consent as an alternative way to make decisions changes the bar of acceptance for taking a course of action. Instead of everyone agreeing it's the best course of action, we all agree it's safe to try.

While these notions of consent and consensus don’t map perfectly to organizational-wide decision making, Sam goes on to explain now they work in practice:

It's really about where you draw the line between what has to be brought to a larger group for a vote versus what we can trust people to take action on in their areas of expertise and allow folks who have the relevant context to actually weigh in on that decision.

One way to think about this is deliberately creating and delegating areas of concentrated authority within a self-managed organization. Can we carve out an area of decision making and have it be the property of the people who are in that team or circle? That way, as long as the decision is within that constraint, they can just go.

Say we're going to have a group of people doing marketing. Let's give them the authority to make decisions about marketing, with some guardrails, maybe around spending, and then trust that we have the right people in those roles to make good decisions. If they need more money or if they're considering something that falls outside their area of concentrated authority, that's when they should check in with the larger group to either get that authority or get the advice they need to make a decision.

And if you can create these areas of concentrated authority, we trust that we have specifically carved out areas for people to be smart, use their judgment, and do what they need to do within guardrails that allow us to stay in a zone of safety. That's when you start to see the actual benefits of a self-managing organization. You don't need to continually bring everything back to a larger group to argue over things that people don't necessarily even understand.

To recognize the difference between consent and consensus is one thing, but to bring forth the fruits of this distinction is another. To be honest, it’s pretty easy to get stuck in the weeds right out of the gate:


But while talking about these things at Bankless Consulting, it was clear there was an operational component to these distinctions, one that implicates domains of agency, authority, and autonomy, the concentric circles about which effective DAO governance is built.

While the theoretical difference between consent and consensus provides a useful framework to think about how to build resilient organizations, operationalizing these distinctions requires a different analysis. I realized recently that an ongoing conversation with long-time BanklessDAO contributor links about (concentrated) delegated authority provides a framework for creating an organization that is built to decentralize and scale.

Adobe Stock
Adobe Stock

One of links’ operating principles is that you shouldn't delegate responsibility without also delegating the authority to carry out the actions necessary to effectuate the responsibility. This may sound obvious, but if you really think it through it’s actually extraordinarily unusual for responsibility and authority to be delegated together. On a local level, the police have the responsibility for maintaining the peace and the authority to arrest people, but that’s the outlier. For many jobs, it’s all responsibility with no authority. Consider the service worker who has the responsibility to ensure customer satisfaction but not the authority to deviate from a standard script, or the salesperson who is responsible for facilitating your car-buying experience but has no authority to determine the terms of the sale. What if you're a social media lead at a project but don’t have authority to post content without the approval of the founder? Does your authority align with your responsibility?

I Live My Life in Widening Circles

You may object to the idea that Rilke was talking about DAO governance when he wrote “Widening Circles” prior to the advent of computers, but it turns out he provided a useful metaphor for how to create decision frameworks in organizations that want to scale.

BanklessDAO is made up of organizational units: guilds, departments, projects, the Grants Committee, and the main DAO Vault multisig signers, as more detailed in the BankelssDAO Constitution. Each of these organizational units can be represented by a circle.


By the social consent captured in the Constitution, there is an understanding as to the responsibility of each organizational unit in relation to the DAO. The Grants Committee is “responsible for vetting all funding proposals and ensuring funded organizational units provide ongoing transparency” while guilds are to focus on “onboarding, education, and community building”.

At the time of formation, the consent of the DAO defined the size of the circle and the purpose of the organizational unit. Over time, the consent granted to a particular organizational unit may change. For example, the Governance Department is in the process of asking for Snapshot-posting privileges, which will be approved or denied on the basis of token-weighted voting, a form of consent-based decision making. If approved, the domain of responsibility and authority granted to the Governance Department increases and the circle grows larger.

Defining the Circles

We’ve spent a lot of time talking about authority, which is largely because I think it influences the other two factors, agency and autonomy – specifically, autonomy is only effectuated when delegated authority and agency are aligned. To be clear, autonomy is the idea that an organization unit or member of a unit within a smaller circle is free from outside coercion to effectuate anything to which they have delegated authority. Agency, on the other hand, is more complex.

Agency concerns both delegated authority and autonomy. In a more legal sense, agency is a relationship between two parties where an agent has delegated authority from a principal to act on their behalf. In some ways, the Grants Committee is an agent of the BanklessDAO Vault, with the authority to disburse BANK tokens. In other ways, it’s an instrumentality of power, an agent that has both responsibility and authority. In either case, this agency is also determined by consent.

Agency gets really interesting when we look at how concentric circles operate within organizational units. Ideally, the domains of authority are so well defined, and the person within that circle so well empowered, that the DAOist can’t help but to discover or feel brave enough to pursue their true passion, to unlock their secret heart. It’s been so long that we’ve forgotten just how many hearts bull market vibes unlock. But that’s an article for a different time and place.

Rilke was a master of subtlety; in other words, he knew the importance of word choice. In DAOs we talk about reaching consensus, but what we’re really doing is asking for consent, the chance to try something, to experiment, to discover the frontiers of what is possible, together.

Adobe Stock
Adobe Stock

I’ve been around DAOs long enough to know that consensus is not only a rare species of decision making, but much like the snowbound Yeti, the facticity of its existence may rest on thin ice. ‘No’ votes accompany many Forum posts, and importantly, most governance tokens lie dormant in a wallet, ungoverned, out of circulation from the decision-making process. Which brings us back to delegated voting.

If you believe that DAOs are not only best governed by consent, but best governed only by consent, then a logical place to look to increase the amount of consent, and paradoxically the amount of decentralized decision making, is by delegated voting. The paradox has its limits, of course, as too much delegation becomes a centralization attack vector. One only must look at the grave concerns over Lido, let alone fiat political systems, to understand what’s at stake when we consider token-delegated voting systems.

One answer to the problems of overly-concentrated voting power can be found in limiting the percentage of circulating tokens allocated to a particular delegate and taking basic sybil defense measures to ensure that no single person controls more than a socially acceptable amount of voting power. Having recently become BrightID verified, I can tell you that strong sybil defense takes little more than 15 minutes, and requires no doxxing. That seems a small price to pay to become a delegate for the world’s most widely held social token, currently at over 6,000 HODLers strong. And while I have no illusion that it will be possible to achieve consensus on this idea, I’m hopeful that BanklessDAO finds the experiment is safe enough to try, that is, to have the community give its consent.

Hiro Kennelly is a writer, editor, and coordinator at BanklessDAO, an Associate at Bankless Consulting, and is still a DAOpunk.

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