4 Reasons Why We Need DAOs Aside from Decentralized Narratives

If you don’t pay attention to the identity of a decentralized practice carrier, what is the reason why DAO is needed?

We analyzed dozens of in-depth articles in the industry, put forward the following four viewpoints, and gave cases based on existing practices:

1. A fair starting point for anonymity

2. The form of automated governance creates trust barriers

3. Breaking down geographic and regulatory boundaries

4. Redefine work

When a question is called “Do we really need decentralization?”, maybe 80% of people will choose a yes answer.

When an organizer says we’re going to build a DAO (Decentralized Autonomous Organization), very few people reject such governance proposals that try to “decentralize” the balance of power. But, even as a DAO member, few people think, do we really need a DAO?

Why am I obsessed with researching DAOs?

Because this is an alternative form of human organization that could be enabled under blockchain governance, it’s an extremely sexy narrative. The use of blockchain technology for governance has a huge space for imagination. For example, it can avoid the cumbersome process of enterprise establishment and create fluid, temporary, and global economic cooperation. It is in the spirit of the age-old topic of “democracy”: a high degree of openness and transparency, where anyone can verify that the rules are being followed. This is an attempt to subvert the logic of human judgment and trust with technological means. At the same time, DAOs also represent a trend of placing power in the hands of individuals more equitably—individuals can seek greater development of choice and autonomy in DAOs, and broaden their horizons.

More simply, DAOs are a new way to fund projects, govern communities, and share value. It answers the question of how we will work, invest, create and play together in an increasingly digital and globalized world. If blockchains, NFTs, smart contracts, DeFi protocols, and DApps are tools, then DAOs are the crowd that uses them to create new things. If they are “what”, DAO is “how”.

Based on our enthusiasm for DAO research, we analyzed dozens of in-depth articles in the industry, trying to answer a question first: what are the other reasons why we need DAO to break through the decentralization gimmick?

Article at a glance:

1. An anonymous fair starting point

2. The form of automated governance creates trust barriers

3. Breaking down geographic and regulatory boundaries

4. Redefine work

5. Conclusion: An excellent vehicle for value propositions in the technological revolution

An anonymous fair starting point

Anyone can join a DAO of interest, regardless of age, gender, skin color, or any other characterization. This means that members can build a reputation in the DAO without having to reveal their real identities, thus enabling them to work on a more level playing field. Especially in the early stage of contribution, members get the same starting point through “de-identification”, and the governor can motivate all kinds of contributors based on PoW, instead of catering to members of the organization with a large number of fans and more famous. At the same time, anonymity is freedom A hotbed of ideas, you don’t have to worry about putting your professional reputation in jeopardy by publishing some unconventional ideas. Free thinking is precisely a hotbed of innovation, people can put forward bold and avant-garde proposals within the DAO, and receive community votes. And create value for the organization as a whole – this is what Incubator DAOs are all about.

Anonymous permission is a double-edged sword, and it does impose constraints on the governance of DAOs. For example, in the market-making protocol DAO, the lack of identity protection makes anonymous contributors more likely to do evil: build backdoors in specific code fragments. While it’s possible to blacklist an attacker’s Ethereum address, that doesn’t prevent him from using a different address to carry out similar attacks in the future.

Paradoxically, there is a need for organizations to identify high-skilled contributors and help them quickly build reputation and credibility within the organization to incentivize long-term contributions. This means that organizations need to give members an option: contribute anonymously or quickly prove themselves. There have been high-quality solutions based on SBT (Soul Binding NFT) on the market, which can be simply explained as storing a specific “ID NFT” in the address, which can indicate the off-chain identity of its holder so that it can be accurately identified. identify. However, there are still some problems that are difficult to solve, such as: avoiding the proxy behavior in the issuance, how to ensure that the holder will not transfer, how to identify the transfer of assets for security reasons, etc.

These are existing solutions.

Kleros developed an ERC-20 registry system called “PoH (Proof of Humanity).” This requires me to submit a video, a deposit, and a surety that the applicant is indeed a real person and has never registered before. After this, off-chain identities with real identities and specific skills and experience will be linked to exclusive addresses.

Governor DAO proposes a method based on biometric authentication technology, which generates a unique hash value representing an individual by collecting the user’s sensory data, and issues a unique and non-transferable ERC20 personal token, which is permanently associated with one’s wallet. But there can be privacy concerns about collecting data.

Automated governance forms cast trust barriers

As Vitalik (founder of Ethereum) said, the blockchain is a powerful underlying layer that can be used to host the governance logic of other applications, but it itself requires a new and different form of governance. When there are differences of opinion within a company, splitting into two companies may not be the first choice – the procedures are cumbersome, the interests are difficult to divide, and the restructuring is not a day’s work. But in DAOs, forks based on blockchain consensus may become a new governance option.

Both Bitcoin and Ethereum have experienced various forms of “constitutional crises,” most notably the debate over the Ethereum DAO fork and Bitcoin block scaling. The two sides of the debate have different strong beliefs about the value of the project, and in the event that they cannot persuade each other, they are finally resolved in a chain fork. No one dictates what is “official, formal governance” – no specific people or councils or voting mechanisms – and core developers often choose to step back and listen to the community when it comes to what is truly controversial.

At this point, the DAO, which claims to use code to outlaw part of the rule of man, appears to be more inclined to “rule of man” than most organizations, and pays more attention to the opinions of the community. This may be an improvement: after the DAO has solved some trust problems that require a lot of repeated confirmation with code, more energy may be turned to the voice of the people themselves.

The DAO governance map runs on the blockchain protocol, and most of the running is automated. Voting, treasury allocation, token deployment and unlocking content based on membership are “trustless”. The organizational form of DAO is more flexible, and the governance structure can be innovated through various tokens and voting protocols. In addition to the basic one-person-one-vote, there are token voting, representative voting, liquid democracy, Quadrac Voting, etc. By issuing multiple tokens and combinations, DAO voting methods are easier to deploy. And possible path dependencies, such as the persistent existence of old systems that make necessary changes impossible to implement, can also be solved in DAOs at low cost. Briefly introduce the voting mechanism in several DAOs:

Representative voting means that voters entrust their power to a representative and let the representative exercise the right to vote for him. Each decision needs to occupy the thinking bandwidth of the voters, which is one of the reasons for the “rational indifference” to the choice of public issues in reality. It can also explain why the number of votes in the DAO is very different from the number of members it has. A more A good option is to delegate decision-making to experts, which is cheaper than taking on these costs yourself. In the blockchain, the DPoS consensus algorithm is a typical representative voting.

Streaming democratic voting is a variant of representative voting. The difference is that delegation is multi-level, and the delegated party can continue to delegate others to vote. When a delegate votes, the votes of all voters directly or indirectly delegated to him will be cast at the same time. However, the entrusting party can withdraw the entrustment at any time and exercise the right to vote in person, or transfer the entrustment to someone else. This voting method gives voters a higher degree of freedom and can increase voting participation. This voting method is currently used by the Governor DAO.

Quadratic voting is a voting mechanism proposed by Vitalik between 1T1V (one token, one vote) and 1P1V (one person, one vote). The key is to allow a single voting subject to vote for the same option repeatedly to express his or her will intensity. In order to avoid giant whales monopolizing the right to speak, the marginal cost of repeated voting for the same option shows a decreasing trend, which means that the cost of the n+1th vote is higher than that of the nth vote. As a donation DAO for which projects the Ethereum Foundation funds are used to fund, Gitcoin currently employs this mechanism to not only efficiently fund high-quality Ethereum projects, but also to create an open culture of community engagement.

Breaking down geographic and regulatory boundaries

The Internet has no boundaries. It is precisely because of the existence of the Internet that the world is being smoothed out. And the borderless nature of DAOs provides opportunities for people all over the world, people in developing countries can earn more purchasing power currency for organizations around the world (not just DAOs), which will make their personal and family life easier improve.

Further thinking, will this also lead to the weakening of the effectiveness of economic sanctions policies among countries? The importance of the concept of place in the real world is gradually diminishing. And this is exactly how the world has been changing for decades, from closed to open, from isolation to communion.

The sluggish and even downturn of the global economy is calling for the emergence of a new economic growth model. If it is not for the explosion of technology, the other way may be the expansion of the market size – allowing many (due to geographical) segmented markets Merger, the best in the fierce competition, reduce cost waste and misallocation of resources. The emergence of DAO is the mutual communication of the market in a sense.

On the other hand, the openness and transparency of blockchain data is reducing the cost of supervision and replacing the regulatory responsibilities based on national sovereignty.

Anyone can see the sending and receiving addresses of all transfers in a blockchain browser such as Etherscan. In addition to the encrypted private information of the transaction parties, the data of the blockchain is open to everyone, and anyone can query the blockchain data and develop related applications through the open interface, so the entire system information is highly transparent. The operation of the organization does not need to be closely watched by supervision, and countless pairs of eyes from investors are monitoring every move. This decentralized “supervision endorsement” adds attractiveness to the operation of DAO. There are traces of any abnormal behavior, and the information is no longer hidden, but becomes a state to be discovered.

redefine work

“As society evolves, job security will be defined differently,” says FWB’s Hauseman. She pointed out that decades ago, our parents and grandparents worked for the same company for 20 to 30 years. A generation later, “5 to 8 years” is considered a long time to work at a company. In domestic Internet companies, working in the same company for more than two years is considered stable. In the business world, this concept of separating work from one’s own business as an employment relationship with modern companies is gradually gaining acceptance. And DAOs are just a continuation of this broader trend.

In an era of increasing uncertainty, DAOs seem to be the “evidence” or “result” of uncertainty. The job security offered by DAOs is different from traditional jobs. Often getting paid on a project-by-project basis, this means it’s not entirely certain how much money will be made. But if you can’t deal with uncertainty, it’s hard to be comfortable in a DAO. But the question is, is this getting worse? Web2 companies haven’t done much better with job security either.

On the one hand, the high transparency of information helps new entrants to quickly understand and new developers to quickly access, on the other hand, it means that the information itself is no longer a barrier. The existence of a company itself is a kind of information moat, and DAO breaks this moat, which will lead to a smoother flow of talent and more intense competition for talent.

Consider the scope and scale of the “gig economy.” In the United States, an estimated 55 million people are classified as gig workers, who are scattered and lack organization, collaboration, and influence. In China, there are 200 million people in flexible employment. The birth of multilateral work comes from the increasingly fierce competition in the global talent market. Employed people begin to have the right to choose employers, focus on their main business, and explore with side projects. We can define our own identity freely and fluidly, and choose the appropriate identity to connect with the corresponding resources and contacts.

Contributing to multiple communities at the same time is the norm for those who make a living on Web3. Some DAO contributors’ tweets often list 3-5 communities. According to the “best difference” theory, the multilateral jobs created by Web3 are not a random betrayal of Web2’s “9-to-5 job” – it is a logical step for mental workers in an increasingly competitive labor market step. An employer may want an employee to work for him full-time, but in a more competitive market, a self-reliant employee would prefer to work for multiple communities.

PS: The best difference is to study the theory of stacking multiple affiliations within a single identity. People are always looking for a balance between belonging and differentiation.

Rafa is the head of Mirror DAO, a Web3 content publishing platform. Rafa studied organizational behavior for many years before helping launch the Mirror DAO. He concluded that the reason most bureaucratic, wasteful, and bloated management exists in companies is simple: companies are stuck trying to get people to do jobs they don’t really want to do (which is why we have bosses and end the term).

David Graeber, author of Bullshit Job asks: Why is productivity progress accompanied by an increase in labor (meaningless labor) and a lack of meaning? DAOs provide an opportunity to “do love or cool work”, thus creating value that people will pay for in recognition of quality. Here, the necessity of the existence of DAO is to provide different options. You can choose to stay and accept the trap, or step out and embrace the uncertainty.

In fact, choices are not polar, but exist in varying degrees and magnitudes. This is also one of the main advantages of DAOs: it allows different levels of contributions to exist. You can be a full-time contributor, a part-time contributor, or just complete some one-off tasks (bounty tasks), depending on your time and bandwidth. This puts the choice of work back in the hands of the individual – if you can’t take too much risk, working part-time for a job you’re interested in is also an option.

Conclusion: An excellent vehicle for value propositions in the technological revolution

Whether the future is decentralized or centralized depends on whether it can win enough outstanding entrepreneurs and developers, and DAO may play an important role in it.

The use of the term “autonomy” predates the use of the term “automated/automation” by decades. Web3 often combines the concepts of autonomy and automation when using the term autonomy. From a technical point of view, DAOs contain automation components, or bots. But from a political-philosophical point of view, the DAO’s salient feature is autonomy, that is, self-realization at the organizational level.

Bill Joy, co-founder of Sun, pointed out, “A better strategy is to create an ecosystem where all the smart people in your garden work for your goals. If you only rely on your own company’s employees, you can’t solve your users. all needs.” Compare the spam problem of Twitter and email. Since Twitter shuts out third-party developers, the only solution to the spam problem is Twitter employees. In contrast, considering how decentralized the protocols underpinning email are, hundreds of companies are trying to solve the spam problem, not completely, but much better than before.

The right environment is more likely to attract new contributors than the high salaries of venture-backed startups. Giants have resources, users, and relatively better infrastructure, while the crypto world provides developers and entrepreneurs with a more attractive value proposition, and DAO is an excellent vehicle for this value proposition .

The emergence of the industrial revolution and the corporate system has driven the development of human subversive productivity. Now we are standing at a new point in time: the scientific and technological revolution and a new form of production organization, and this form of organization will carry the value proposition and management methods of the scientific and technological revolution. , to organize people together in a more equitable, efficient and democratic way. This may be the end of the DAO.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/4-reasons-why-we-need-daos-aside-from-decentralized-narratives/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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