DAO Governance Tools

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Kei Kreutler:

"At a closer look, effective DAOs start behaving much more like networks of teams, like the MONDRAGON Corporation network with 100 affiliated cooperatives, rather than the loosely coordinated swarm intelligence that they might appear as from a distance. Inspired by Rawson’s analysis, we can roughly sketch three layers of a DAO:

  • Token: Multi-organizational networks aligned by token ownership
  • Teams: Teams, guilds, and squads represented by token ownership
  • Missions: Missions, milestones, and raids financed by token ownership

From these layers, a heterarchical network emerges, meaning an organization that possesses the ability to be ranked in multiple ways.

In ecosystems that prioritize distributing ownership, tokens encourage DAO networks to be managed by their members. Tokens, teams, and missions are not confined to the quasi-institutional boundaries of a single DAO but can and, in order to meaningfully decentralize the control network, should be represented by token ownership in multiple DAOs. An ecosystem not unlike the control networks of transnational corporations emerges, but importantly, one without monocentric command and with reduced transaction costs across different levels of trust. As Rawson writes, “As long as the collective memory freely circulates within a given [DAO network], discovered solutions to problems can be reused.” When we view DAOs as multi-organizational networks aligned by token ownership, the purpose of DAO tooling becomes not only to support the operations of one team but to facilitate collaborations across many. Funded by PrimeDAO, DAO-to-DAO (D2D) collaboration mechanisms appear the most forward thinking work along these lines, which may eventually overtake traditional business-to-business (B2B) products. A new squadlike entity emerging from stealth mode, the Gnosis Guild team embraces a similar emphasis on DAO-to-DAO tools, with a new constellation of DAO tools launching in early August.

Revisiting the promise of DAOs, their potential to incorporate deeper practical knowledge in governance does not mean that decision making must involve an ever-larger number of members in every proposal, but rather that within a DAO network, teams who possess the most relevant expertise can easily share it with the ecosystem. When we view DAOs as constellations of teams, not monoliths, DAOs become networks to allow collective memory to flow freely."



Kei Kreutler:

Returning to their origin, DAOs today resemble The DAO in their emphasis on open participation and economic value creation, while their culture has shifted more toward specific niches and social connection. In the examples above, one term has been left intentionally vague: governance. Many DAOs today use the lightweight Snapshot platform for governance (13). On Snapshot, DAOs each have a space to create and vote on proposals. For example, both PleasrDAO and PartyDAO have a Snapshot space, on which they hold public votes for collective decisions. Snapshot weights votes by the amount of DAO-specific tokens an address holds, such as $PEEPS tokens in PleasrDAO.

The topic of governance has its own history within the crypto ecosystem that won’t be fully expounded upon here. Notably the initiative MolochDAO, which uses the classic font Papyrus and heavily references gaming guilds, rekindled the fire of decentralized governance after The DAO hack. MolochDAO went on to inspire a legion of new DAOs, many direct forks, in its wake.

This essay’s history of DAOs is far from complete, as other projects like Aragon, Colony, DAOhaus, and DAOstack continue to develop their platforms for DAOs and modular initiatives like Block Science and Commons Stack arise. These projects offer DAO tools supporting many governance mechanisms. However, a prehistory of DAOs is also incomplete without its less frequently mentioned relation to Platform Cooperativism."