Why DAOs are striving to be the dominant force in web3 and how DAO tools are changing the game.
Prominent cyber libertarian John Perry Barlow has declared that “cyberspace” consists of transactions, relationships and ideas themselves. With the advent of DAOs and their rapid popularity over the last year, it was a test of an ecosystem that was still learning how to stand on its own.
DAOs open up a whole new possibility. Decentralized Autonomous Organizations (and DACs – Decentralized Autonomous Corporations) allow the influx of talent into the crypto industry to work together autonomously around a common goal, free from the barriers of centralization.
Coopahtroopa defines it in layman’s terms: “A DAO is an internet community with a shared market cap table and a shared bank account.”
Still, digital communities come in all shapes and sizes, with different needs, goals, and structures. There are Social DAOs, Collection DAOs, Investor DAOs, Protocol DAOs, the list goes on…
DAOs need tools
As we can see from the above diagram, the concept of DAO is very broad. If someone randomly chooses two DAOs from this list and compares them, he is likely to conclude that these are two completely different organizations or “enterprises” – with different ambitions, identities, and characteristics . They work in different ways.
However, even if we break them down, we find that all of these organizations have a common underlying structure, as they all need a social space or messaging tool for members to communicate (like Discord or Telegram) – a governance mechanism where members It can be used to make collective decisions (such as snapshots), as well as use a vault to fund proposals voted on by the DAO.
While this structure provides the foundation for the successful construction and growth of DAOs, most DAOs still face organizational problems due to a lack of functional tools and networked collaboration. They are clumsy, inefficient, and don’t necessarily communicate much with other communities.
At the heart of many DAOs are web3 community projects that require simple infrastructure setup, and this is where platforms like the d0xINFRA framework come into play. For example, District0x’s framework lowers the barrier to entry for any non-technical person building their own DAO. Next, let’s take a closer look at how DAOs can scale more efficiently and use tools to build stronger infrastructure.
Challenges posed by rapid growth
The linear hierarchy espoused by some DAOs was key to its rise, but could also easily be a catalyst for its decline. In the early stages, when DAOs were small and operated by single-digit teams of members, this linear hierarchy of levels was like a dream. Everyone has their own say in governance, and all can contribute and be rewarded for their hard work. But as the numbers grew, problems began to arise.
The unofficial “open door” measures of many DAOs can increase the number of these members very quickly. DAOs can grow to hundreds, thousands, or even tens of thousands of members, although some have limited activity (also known as the “DAO free-rider problem”, where members start to rely on others to be active, but still expect something in return).
This ultimately affects governance and direction. Without a clear governance structure, DAOs can quickly be inundated with proposals—if those proposals are voted on, they need to be implemented. This is where most DAOs fail.
In addition to lack of member activity leading to a lack of progress, getting too many opinions can also be detrimental to the DAO’s development, so what is the delicate balance between the two? How does a DAO need to be structured to avoid governance and inefficiencies?
DAO Squads – “Working Groups”
In Cryptonetworks’ ownership, Patrick Rawson believes that for DAOs, “allocating ownership to groups with more specialized goals is the key long-term issue to address”.
Rather than taking a bottom-up approach to every decision, DAOs can introduce what Rosen calls “groups” or “working groups.”
Whether it’s a company, a factory, or the blockchain community, it’s been proven time and time again that specialization is a better way to split an organization’s “workload” and divide tasks into manageable projects. Continuing this idea, these groups will be assigned to different important areas of the DAO. Just like departments in a company, there will also be “marketing groups”, “business development groups”, “QA testing groups”, etc.
Just like in a traditional company with different departments, the challenge knife for the marketing team for example can be responsible for developing and executing the marketing strategy, without worrying too much about the tokenomics of the project for example, the same can be in the DAO responsible for a completely different lineup.
The establishment of the working group achieved two important results:
- Increased speed of governance – by directly removing voting overhead, empowering teams to execute directly without voting on every decision
- Extended operations – simple division of labor, allowing many tasks to be performed, solving more problems at once
Working Groups can be used to motivate and appropriately guide DAO members by developing a clear list of “similar tasks” that can be accomplished quickly to move things forward in a productive manner.
More recently, we’ve seen the rise of DAO tools – ad hoc frameworks that allow DAOs to improve community governance, accountability, and overall productivity. One such tool is DAOnative, a startup from Berlin.
DAOnative – Gamified DAO Participation
DAOnative is a community growth platform designed to solve the real problem: What does a DAO need? Any platform looking to grow using web3 primitives can use DAOnative to attract and reward its members.
DAOnative introduces “challenges” – think of them as tasks in mmorpg – which, upon completion, reward the achiever with EXP (experience points).
This level of abstraction, while very simple, is necessary to lower the barrier to entry for newcomers to the DAO while simplifying the experience for others, with the ultimate goal of increasing engagement and growing the DAO in a sustainable manner.
An optimistic version of the future of DAO tools will enable everyone to work more their own way on meaningful projects, allowing them to express their different interests.
On the other hand, the pessimistic version is that humans become cogs in the DAO machine. Call it the gig economy 3.0. Use DAO tools to fully dehumanize collaboration by assigning reputation scores to humans and automating every aspect.
What is the biggest hurdle facing DAO tool builders right now?
“There’s no clear consensus on what a DAO is, and we’re building tools for something we don’t fully understand yet. DAOs evolve with tools, which means that the tools we build will affect the form and possibilities of DAOs. It is difficult to find a balance point during the provision of templates under restricted circumstances.
Many builders have not been involved in DAOs before entering the field. While it may be nice to enter with a blank state of mind, it is difficult to build the right tool without experiencing the issues faced in many DAOs.
Scaling a DAO is a challenge
In conclusion, we can make it clear that successfully scaling DAO/DAC is a challenge we are currently working on. Governance is a great start, but how to effectively scale operations while incentivizing participation and effectively directing resources into a DAO with thousands of members remains an open challenge.
Once web3 resolves these initial hurdles, we can expect the rise of DAOs with productive organizational structures to have a huge impact on web3 and the real world.
Kevin Owocki, the founder of Gitcoin and the de facto authority on decentralized coordination, also stated at the ETH Amsterdam conference in April that DAO coordination and communication will have the most profound impact on our lives (he specifically used the term “” impactDAO”), as shown in the following figure:
As we witness the optimization of communication and collaboration across DAOs, we will see how the growth of these ecosystems eventually converges into the defining force of web3.
At this point, let’s JUST DAO IT
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/dao-revolution-or-the-future-of-web3-dao-tools/
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