How will DAO develop after analyzing the status quo of decentralized organizations?
原文标题：《 DAO 可道，非常 DAO 》
原文作者： Mia Bao，Founder of Beep Crypto/ Chief partner of WHALE
Thanks to Alex Yung and Summer Zhao for proofreading this article
directory
Dao's past and present lives
What is the DAO
The organizational shape of the DAO
Incremental decentralization
Weighted by the spectrum and extreme transparency
Today for NFT and tomorrow for DAO
Dao's past and present lives
On April 30, 2016, blockchain company Slock.it launched The first DAO project --The DAO, which is an early decentralized autonomous organization (DAO) and venture capital fund. At that time, 11,000 people invested 11.5 million ETH, or 14% of Ethereum's total supply, worth about $150 million. This also made The DAO The largest crowdfunding project at The time, and The degree of FOMO exceeded many people's expectations, including The project owners themselves.
"The DAO is a paradigm shift in The concept of economic organization. It provides complete transparency, complete shareholder control, unprecedented flexibility and autonomous governance."
However, extreme happiness begets sorrow. "Stop trading. We're under attack." On June 17, 2016, hackers took advantage of The DAO's "Recursive Call" and "Call Transfer Avoiding Destruction" vulnerabilities and carried out more than 200 attacks, stealing 3.6 million Ethereum in total, more than a third of The total Ethereum raised by The project.
However, The hackers were not able to cash out directly. Under The terms of The smart contract at The time, The money was held up for 28 days, giving The DAO and The Ethereum community nearly a month to figure out what to do with it. Later, as we all know, the Ethereum community hard forked into ETC and ETH to save the day. The Ethereum core team can't force the community to move, but people voted with their feet, answering the question: do the benefits of eliminating hackers outweigh the costs of human intervention in trust in Ethereum? For most people, it is.
If it weren't for The fork, The Ethereum (ETH) hackers stole from The DAO on June 17, 2016 would be worth $6.6 billion today.
Today, five years later, the DAO debate is back, and the DAO has a number of use cases. I can see that some of the smart people around me have started to talk about DAO. The DAO native state now has a taste of NFT at the beginning of 2020.
When we first laid out NFT, we thought of it as "the closest entry point to a real-world blockchain", and it proved to be very easy to generate some significant attention: In just three days, the total turnover of Meebits on the secondary market reached as high as 12,000 ETH ($42 million), a pair of Uniswap socks sold for $160,000, Jack Dorsey's five-word tweet sold for $2.5 million, Nynt Cat's first work sold for $656,000, and Beeple's NFT at Christie's sold for $69.35 million...
But today DAOs seem much more obscure, so what exactly is a DAO?
What is a DAO?
In Out of Control, Kevin Kelly describes the behavior of a swarm of bees: When a swarm of bees wants to move, the queen bee does not directly make the decision, but a swarm of bees go to spy on them, and when they come back, the scouts dance to the swarm to show the result. The more dramatic the dance, the better. When the swarm sees this, it sends other bees to follow. And if they feel good, they'll come back and dance with them."Through this repetition, the sites that people like will attract more visitors, which in turn will attract more visitors."
The biggest colony wins and the queen moves in. In this process, the queen bee does nothing but follow the largest swarm. No bee makes the "final decision," but almost all bees participate in the decision.
This is hive thinking,"The magic of the 'hive mind' is that there is no single bee controlling it, but there is an invisible hand, a hand that emerges from a large number of dull members, controlling the colony."
This is the native DAO.
Considering the definition of DAO, DAO (Decentralized Autonomous Organization) is a Decentralized Autonomous Organization, which is a group organized around a task to coordinate autonomy through a set of shared rules executed on a blockchain.
DAOs "decentralize" decision-making by giving it to stakeholders rather than executives or board members; Autonomy means that an application running on a publicly accessible blockchain by a user through a smart contract automatically triggers actions and results if certain conditions are met.
This is the "organizational form" of the change and renewal.
I loved Jesse Walden's previous summary of DEFI and NFT:
Defi: Money Legos
NFT: Media Legos
I think the DAO is probably the top layer on top of NFT. DAO can own NFT and create NFT, and can hold a lot of non-NFT things.If NFT is "Media legos", DAO is probably "Corporate legos", which is in line with Santi's view.
"Much like creator fan communities today, each 'company' or project will become more like a tribe, driven and defined by the stories and symbols that bind its members together, and led by those who can best weave its narrative."
While DAO is a process of "decentralization," there can be no "power center." The criticism that a project or organization is ultimately controlled by a small group of people is not a weakness of DAO. For any organization to keep its decisions and tasks in order, there must be someone making decisions, whether it is early or late, whether it is visible or invisible, whether it is group or individual.What DAO needs to solve is the "decentralization" and "fluidity" of power. The former enables project participants to have the right to speak on the project, while the latter ensures the constant change of leaders who play a decisive role.
In my last article,After the age of NFT", I mentioned the Social Money effect,If Social Money is more about the "Monertization" process of individual influence, DAO is about the grand proposition of how many things we can accomplish together.
The organizational shape of the DAO
As of early May, the total assets under management of the DAO ecosystem (according to DeepDAO data) exceeded $1 billion, and this figure does not count encryption protocols that do not operate as DAOs or use separate DAO architectures. "Total assets managed by DAO ecosystem" has a similar meaning to "asset scale managed by company system" in market economy, except that the vast majority of assets under market economy are managed by companies. Therefore, it is not convenient for us to directly compare the scale. However, as a new organizational governance model, The size of "$1 billion" is enough to be an indicator of the evolution of the DAO ecosystem itself.
DAO total assets under management ranking
"DAO is the future of venture Capital," said Olaf Carlson-Wee, CEO and founder of Polychain Capital, earlier. "DAO is on the verge of becoming the second major blockchain breakthrough after digital cash."
Of course, the DAO division here may be too narrow. Not all DAO ecosystems are related to "managing assets." DAO organizational forms also include "infrastructure", "asset management category DAO", "governance DAO", "aggregator", "Yield DAO", "Guild", Eight categories of "Creator&Media DAO" and "DAO Adaptor" are described.
At the infrastructure level, DAO has gradually become an important part of the Web3 infrastructure. The continuous development of DAO protocols like Aragon, Daostack, Moloch, etc., has provided great convenience for organizations that want to initiate, govern, and manage DAOs. Aragon, for example, provides a one-stop shop for tools and services to turn communities, businesses, and so on into an economy, releasing a long-tail DAO organization. In contrast to the complexity of Aragon, Moloch was built with a "brutally minimalist" design philosophy, aiming to create a "minimal viable DAO" that would allow people to actively minimize adverse factors while allocating shared resources for a common goal.
At The level of asset management category, Venture DAO, which refers to "investment-oriented" DAO organizations, such as Metacartel, The Lao, etc., is occupying a large share of The current DAO market. However, there are also "Grant" investment organizations, such as Moloch. The Marketing DAO, etc.
Unlike traditional funds, where institutions and high net worth individuals (limited partners or LPs) put money into the fund and others (general partners or GPS) put money into the company, investors in Venture DAO will be able to vote on proposals based on predetermined rules set in smart contracts. Each person's vote is weighted by the number of tokens they hold, which is based on how much they have invested. If a proposed project gets enough votes, The smart contract automatically triggers The DAO's money to be invested in The ETH wallet of The project. This is of course The ideal Venture DAO form, as many DAOs are still in a state of "progressive decentralization" (see The next section).
It is worth mentioning that Venture DAO is currently playing well on the NFT track. The following chart lists Whale, Flamingodao, PleasrDAO, Jenny Metaverse DAO and other DAO groups that focus on investing in NFT assets. On April 19, Pleasrdao beat competitors with 2,224 ETH to win Snowden's first NFT title "Stay Free." Jenny Metaverse Dao also recently raised $7 million. Whaleshark, the founder of Whale, has repeatedly stated that his one-to-one philosophy for Whaleshark is "Whaleshark out, DAO up!" ", all this seems to be gradually confirming Matt Huang's sentence that "The next Berkshire Hathaway will begin as a DAO."
The Governance type DAO is an extremely important part of the investment type DAO. As mentioned above, the DAO is a process of "decentralization" of the organization, in which the voting weight is determined by the proportion of assets held by users. Voting weights, in turn, directly influence the direction of decisions (decisions about DAOs are discussed in the next section, "Dependability Weighting and Extreme Transparency Imagination"), and this decision is implemented by governance tools such as Snapshot, Tally, and Gnosis SAFE. Of course, a project may have multiple attributes and labels, such as Aragon being a governance tool in addition to infrastructure. DAOs in the "aggregator" category also tend to have voting governance capabilities.
As for the latter organizational forms, Yield DAO is a class that aggregates assets to collectively earn the benefits of DEFI, and Barn DAO, Piedao, and BadgerDAO are among the top groups of DAO asset precipitation categories.
Guild DAO is a kind of Guild governance, such as Yield Guild Games (YGG), which is a game Guild where players from all over the world can get together and earn money through the play as you go mechanic of various Games. In traditional blockchain games, especially NFT games, users are usually required to hold NFT assets before entering the game. However, guilds like YGG can help users avoid the process of purchasing assets and separate the ownership and use rights of assets to achieve a win-win situation for all parties. Raid Guild and Rabbithole are similar to "task crowdsourcing" organizations, where blockchain professionals are aggregated to provide "consulting", "PR", "design", "development" and other services, while the latter are C-side organizations where users can earn money by playing tasks such as dApps. Metafactory is a business-oriented DAO, focusing on digital & Incubation platform for physical fashion brands.
Creator DAO and Media DAO are newly born DAO organizations. Since millennials have become the main force of society, Passion Economy and Creator Economy have gradually emerged. From the perspective of Capital, there is also a trend from VC to Community Capital to Solo Capital, which is actually the result of the fermentation of "personal influence". Emerging communities of creators like Mirrior are minimizing modules, but maximizing personal impact, radiating from personal impact to NFT (merchandise), or Crowdfund (crowdfunding), which I think is also very avant-garde.
To sum up, in essence, any autonomous organization with DAO governance and management can be called a DAO, so a DAO is more like a "composable module" that can be integrated into a variety of projects. This ecological component is defined here as a "DAO Adaptor," among which well-known projects include Uniswap, MakerDAO, Aave, Compound, YFI, Aavegotchi, Decentraland are all pioneers of DAO organization.
Instead of a top-down hierarchical structure, DAOs use Web3 technologies and rapidly evolving governance and incentive systems to distribute decision rights and financial rewards. The various organizational forms mentioned above may be too complicated. I think that simply speaking, apart from the category of infrastructure,The DAO is actually a new combination of a Venture DAO, a Governence DAO, and a Value Sharing DAO.
Incremental decentralization
When the author studies NFT, DAO, Social Token, Passion Economy and Creator Economy, Often watch the opinions of Notboring Packy McCormick and Variant Fund Jesse Walden. When I first read Packy's article, my best friend and I said "Shit, he is literally reading my mind..." Howe is literally a treasure trove of bloggers I'd like to keep to myself, and Jesse's post is a more divergent inspiration (highly recommended by both). "Progressive Decentralization" is a concept proposed by Jesse Walden, who believes that:"Cryptocurrency companies don't have to be, and generally shouldn't be, a DAO from day one. They can evolve."
Too much adherence to the original form of things often fail to truly understand the nature of things, whether packaging or classification of the "definition" is to serve to "better describe the product itself", rather than to limit the "product itself". The same goes for DAOs.
The key to moving from centralization to decentralization is whether the innovation helps the product itself, and whether the current stage of the product is suitable for such innovation. If the answer to both is yes, then it's worth going ahead. In the process of starting a business, we should constantly communicate with users through testing and forming a good feedback loop, so as to continuously improve the product itself. A good product needs testing and feedback, rather than the founder watching Out of Control at home, predicting the strategic situation of the next 50 years, and then talking on paper. A good product has to coevolve with the environment it's in.
How do you step up a decentralized governance framework to "build a sustainable, compliant, and community-owned product"?
Walden gave us three steps that I think you should discuss together:
1. Product and market fit
The early days of a cryptocurrency startup should look like the early days of any startup: a small, polished team focused on building, learning, and iterating until it finds the right product for the market. If the product sucks, it will eventually become detached from the community.Web3 startups actually have the advantage here, by integrating existing smart contracts, code, and products into new contracts to quickly build and test, allowing for an extremely fast trial and error process. Defi is called "Money Legos" because whenever someone builds something new, it becomes a module that can be used by others. Magic comes not only from creating Lego, but also from reconstructing Lego combinations.
Aavegotchi is one of the most DAO-based teams in my contact. From proposals, to votes, to social network graphs of Discord/Twitter and other social media mapped to the contribution weight value of the project, DAO is implemented without exception. But it is also inescapable from the process of "progressive DAO" : the initial tone is set by the team, and the major decisions are made by the community. I remember very vividly that after the first portal release, everyone voted on the second portal release after Snapshot was delayed, and even the team was surprised at the "no second portal until rarity mining in phase 1" result, but shouldn't the creation of a good product be determined by the "market"?
2. Community involvement
Once a company has achieved a product and market fit, it should start trying to get more stakeholders involved more directly. Walden likens it to "open source development," inviting community participation, offering bounties, grants, and other incentives to grow in an open environment, build communities, and reach initial consensus on decisions.
My favorite domestic team in this regard is Conflux, which, while they haven't made the transition to complete decentralization, has done a very systematic job of "original task crowdsourcing." Their Bounty Plan, according to the dimensions of "technology", "brand", "community", "resource" and "other", invites people of insight from the open community. Each task is clearly listed, and relevant personnel can claim it directly, so that more stakeholders can participate in the ecological construction.
The voxel creator community of The Sandbox is also a "native DAO". Artists will form several groups according to The corresponding themes in each period of time, and each group is integrated into a group leader according to The weight of previous works. The group leader will guide members and ensure The steady progress of The creation process. But power is fluid.
The above example is in fact consistent with the Guild classification in our DAO classification at the beginning, but due to the gradual process of DAO, the project is still running in a "class primitive" manner, and the scalability will increase exponentially after the transition to full DAO governance.
3. Full decentralization
The first two steps are followed by "complete the DAO decision and execute it automatically." One of the things that we're going to focus on after that is Voting power and the other is automatic execution. Voting Power is currently largely determined by the number of coins held. However, there are many complaints in this section that the core team or large households may influence decisions based on their status in the community or the number of tokens held. The issues and solutions regarding this will be discussed in detail in the next chapter. Automatic execution creates and distributes tokens by triggering preset rules in smart contracts that determine who gets what from today, how tokens will be distributed in the future, and so on.
The future of the project is in the hands of the community, which is the key reason why so many projects need "progressive decentralization" the most. When I asked Whaleshark earlier, why Whale's DAO solution is still launched in Discord, rather than deployed on any DAO infrastructure, His answer is that the current DAO solutions are not perfect, and the content of many DAO solutions is complex. At present, there is no product on the market that can allow the solution to be passed without manual automatic execution. Voting power also has many of the problems mentioned above.
A loyal community combined with effective governance will effectively promote a perfect fit between product and market, which is probably the most effective way to accomplish DAO innovation.
Weighted by the spectrum and extreme transparency
There is a problem left over from the previous chapter: "Currently, most DAO governance determines Voting Power through the number of tokens held", but this can easily fall into the centralized control defect of large or small number of people.Some people call the decision-making mode of "one vote with the same power" as "single-cell democracy", which is pseudo democracy. The pursuit of individual absolute democracy is not necessarily the optimal solution for decision-making, so how to guarantee the balance between democracy and independence and maintain the uniform-Nash balance of strategy?
"My goal is to do meaningful work and build meaningful relationships with the people I work with, and I know that only extreme transparency and algorithmical decision-making can help me achieve that." ---Ray Dalio
Believability -weighted and Radical Transparency are derived from the decision-making model of Bridgewater Fund. Although Dalio is not a big fan of Bitcion, But Bridgewater's corporate decision-making model is surprisingly simple.
One of the most common objections I hear in DAO decisions is, "A group of people can't make decisions."Apart from the "stake" represented by the token, are there any "dimensions" that can be weighted? Or is the number infallible? Does Big House/Whale mean Absolute Right? The answer is obviously no, but can it be improved with the idea of "reliability weighting"?
Depend on the spectrum of weighted, in simple terms is that if you rely on this person, then you say the weight of the opinion on a bit heavier; If you're unreliable, it's less important. This may seem simple, but it is not easy to implement, which is why Bridgewater is often referred to as a "cult culture".
A "Dot Collector" is a tool for bridging water to achieve degree-weighting, allowing employees to score others using different dimensions, such as strategic thinking, dealing with ambiguity, and ambiguity. The score is on a scale of 1 to 10, with 7 being average.
All comments, such as the rater's ID, score, and additional postscript comments, are permanently saved. Each comment is called a DOT, and a person may have more than 11,000 dots on him or her, such as Bridgewater's co-CIO. The dimensions ultimately integrate into your 'believability'. And in the decision-making process, we can be weighted by reliability.
(Each person is painted in color according to the weight of accuracy)
"Creativity = extreme truth-seeking + extreme transparency + credibly-weighted decision-making."
Back to our DAO governance, let's take Venture DAO as an example. The simplest "reliability weighting" is to track an investor's investment decision each time to form his "investment reliability", which will form different weights in the next investment (this part should be extended to the discussion in the Did section if it is to be derived).
This is the "idea meritocracy" advocated by Hashimoto. To achieve the best decision, 'radical transparency' was achieved through the method of believability-weighted.
Of course, there is more to the success of a DAO decision than just "reliability weighting," as Charlene Li writes in Open Leadership: Explaining, Updating, Conversing, Open Mic, internal Crowdsourcing. The six aspects of the unified information Platform explain the behavior characteristics and implementation methods of open communication within enterprises, which I think are also of reference significance (I will not elaborate more on the issues in the chapter).
The process from enterprise to DAO organization is a process from closed to open from the above dimensions.
Today for NFT and tomorrow for DAO
Like NFT, the DAO's early experiments now may represent only a fraction of its future potential. As more DAO tools become available, it becomes easier to try and innovate, and DAO Legos continues to fill in, not only in the application layer, but also in the governance of DAOs.
In April this year, the Wyoming Legislature passed the proposed legality of DAOS by enacting the Vermont Bill For Blockchain legislation, which would allow DAOs to be established as limited liability companies. This is potentially a huge step forward for DAOs, and the bill will allow DAOs to operate on chains, broker assets, and manage their transactions, which will undoubtedly pave the way for DAO extensibility.
After going into the DAO Rabbit Hole, I was looking forward to seeing what other interesting ideas were coming out of the space and how the above motivational model would feed back into the project itself.
"The next big thing will start out looking like a toy", I believe today of NFT will be tomorrow of DAO.
Welcome to join the official BlockBeats community:
Telegram Subscription Group: https://t.me/theblockbeats
Telegram Discussion Group: https://t.me/BlockBeats_App
Official Twitter Account: https://twitter.com/BlockBeatsAsia
Related Articles
