DAOs are the biggest misnomer of web3. They don’t work, and no one seems to know how to make it work. Here, I present a view to challenge the way we look at DAOs to begin with.
The take-away for me from 2 days of DAO discussions in Amsterdam is nobody has figured out how to manage the chaos to get anything useful done in a DAO.
DAOs are today just a glorified Discord channel with no clear route to be either Decentralized (what does that even mean?) or Autonomous. “DAO” is a marketing gimmick.
DAOs tend to reject hierarchy. DAOs optimize for consensus over conviction. For any real innovation, you need zero to ones. Zero to ones are by definition anti-consensus (“What do you know that no one else agrees on?” adage by Peter Thiel).
DAOs that want anything meaningful done should have hierarchy. If there is hierarchy, how is it any different from a centralized organization?
There is always a hierarchy at any meaningful organization, DAO or not.
I think the ethos that DAOs stand for isn’t leaderlessness. It is meritocratic leadership. It is that anyone can rise to the ranks of the leader as long as they have the competence, motivation and discipline.
Organizations need to be able to swap out the leaders of the hierarchy when the leadership isn’t delivering.
One option to change leadership is making a clone and asking people to port over. I think that was a good option for L1s, but doesn’t apply for Dapps especially once they’ve amassed wealth in treasuries.
The DAO should clearly define the rules of leadership change. How will the leader be changed and how the rules of the change of leadership can be changed? These are the bare minimum for a DAO to qualify to be called a DAO. A discord channel is neither sufficient nor necessary for classifying as a DAO.
Disclaimer : This model will work only for DAOs that have a token and a treasury
But - the way to vote is not by using a one token one vote. It is by futarchy voting. Meaning, the way to vote is by saying “I promise to buy $100 worth of Governance token, if the leader of the DAO is replaced by X”. When the voting is complete, the buy order is automatically executed if X becomes the leader.
You want someone making the zero to one bets at the Organization.
You want people to be participating in the votes with incentives to vote in the best interest of the DAO.