Is there hope for the DAO? -- Mable& Devcon CAI

Original title: Is There Hope for the DAO? - Devcon Osaka Notes
Zen and the Art of Cosmic Repair

The author   Blockchain Economics Studio node Mable  &   CAI. BES is an open source organization incubating blockchain economic and social experiments

Devcon 5 Osaka, which lasted for 4 days, came to a successful conclusion on the eve of Typhoon Hauser. The four-day conference brought together thousands of blockchain enthusiasts and practitioners from all over the world, including professionals from academic circles and research institutions. The information density of the 4-day conference is extremely high. A dozen rooms in the packed ATC hall are filled with all kinds of speeches and workshops from morning to night. A total of more than 200 agendas include the hottest cutting-edge topics at present. After FOUR DAYS OF HIGH-DENSITY KNOWLEDGE BOMBING in the DAY and soul party in the night, the two earth signs were very tacit in the following weekend, quickly sedimented, again without pressure to get the praise of the air sign.

The whole conference can be summarized as the following five parts of the theme content, respectively:
DAO & Governance
Blockchain Philosophy
DeFi & Finance
Token & Incentivization
The ETH 2.0 & amp; Technology

Of these issues, opening up the financial sector was probably the one that saw the most progress and attention at the conference. There is a lot of interest in the progress of MKR and how it will help third world countries further participate in the financial system. So why is BES most concernedDAO (Decentralized Autonomous Organization)? We've actually studied all of these topics in depth, but in the endIt is believed that governance is the basis of economy, which contains more low-level human nature and organizational rules, and is easier to conduct small-scale experiments.

By illustrator Anton Gudim

DAOSo far, where has it come from? By CAI big

Since the development of ETH DAO in 2016, the decentralized autonomous organization has mainly formed two directions: underlying protocol/real organization. The two best known examples of the underlying protocols are Genesis and Moloch, which were built on DAOStack. A detailed introduction to the two DAO mechanisms is available online, with links at the end of the article. Here are some basic features:

Genesis DAOThe interesting part is hisVoting mechanismWhen a motion is submitted, a motion based on the motion is generated at layer 2Prediction markets(a platform that predicts at any given moment what the probability of an outcome X, Y%, is by gathering as much insight as possible into various matters), the prediction market predicts whether the bill will pass or not, which in turn determines how the bill will actually pass. Sort of like the House/Senate or upper/lower house voting system.

Moloch DAOThe interesting part is his Rage-Quit. Moloch DAO exists under the mechanismshare and capitalTwo concepts.Shares only vote and other management rights, cannot transfer and cash. Assets have a real wealth value, but can be realized if and only if the member decides to quit. When members are dissatisfied with a proposal, they will choose "angry withdrawal", destroy their existing shares when they exit, and obtain the assets of DAO in equal proportion at that time. Of course, there is also a mechanism for rejoining after quitting, which provides flexibility.

In Devcon 5, two workshops directly related to the DAO, Beyond DAOs: Evolving Human Organizatio and Taxonomy of DAOs.Beyond DAOsThis workshop extends beyond blockchain to discuss the governance issues of human organizations, such as how to collaborate, how to efficiently utilize common property, and what is the fundamental purpose of DAO.

And in theTaxonomy of DAOFrom the "dimensions" and "features" of DAO to launch a more practical discussion. As for the four dimensions listed in the above table, these dimensions can be extended, such as: member entry method, member exit method, number of active members, whether members are required to have legal entities, dispute resolution method (internal or external), whether members need to do KYC, etc. For each "dimension", there are several possible solutions. In this way, several organizational structure forms of DAOs can be arranged and combined by brainstorming.

The governance mechanism of the DAO itself has been designedBeyond the technical boundaries of blockchain, and return to the thinking of governance and the origin of human organizational form. Just as Defi's mechanism design borrows heavily from real-world financial models, so does DAO. In the implementation of DAO mechanism, in fact, the forum management mechanism in the Internet era has provided a very rough prototype: member's admission, member's honor system, member's incentive system, member's token's function and finance.

Devcon 5's most amazing talk about DAO comes fromSimon de la Rouleviere's New Markets in The Arts, the theme of which is to discuss the possible exploration of DAO, cryptoeconomics and tokens in the broad scope of the art field. And one of the projects that I find most interesting is Abraham AI. Let's start with a picture:

In short, Abraham AI aims to create an AAA (Autonomous AI Artist) that is autonomous, unique, and original. The core mechanism of AAA art creation is several iterative generative models based on massive data supply. The source data of such artistic output can be pictures, sounds, images, words or other carriers. The process of creation and evolution of AAA subjects comes from the collective contribution of a group of people, including data contribution, content incubation and so on.

A: Collective Creation is the result of crowdsourced wisdom. A: Autonomous Artificial Artist.
DAO Member's Role: Providing training data, optimizing models, incubating content
Output: The art produced by AAA based on the input and contributions of its members
Funding Source: the sale and display of artworks
Incentive Distribution & Governance (incentive mechanism and management) : DAo-based member management mechanism, through art sales profits, in the form of tokens back to different participating members in the whole chain.

In this scenario, there are visible sources of income to support the entire ecosystem. The ecosystem relies on the crowdsourcing wisdom of all its members, similar to the hive mind in the animal world in nature, and finally returns the benefits of the ecosystem to everyone in the organization. The core AAA of the ecology is not owned by any entity, and its self-running mechanism depends on the DAO. Of course, this is just a discussion of the concept, there are countless practical holes to be covered, such as how to avoid AAA duplication, how to prevent malicious actors, how to design the model, and so on. However, this is a very exciting direction to explore. This project is currently in alpha, and interested readers can follow the attached link at the end of this article.

  What exactly is a DAO? What can be done? by Mable

I want to go back to the original definition and ask a more basic question:Does the "A" in DAO mean "autonomous" or "automatic"?At a roundtable on DAOs in Berlin in August, the ultimate fear of DAOs was mentioned -- that when a system is too automatic to be manipulated by humans, someone is bound to exploit the system's flaws to weaponize enormous power, even if the system is designed with incentives and punishments in mind. Because organizations are ultimately made up of people, any "automatism" will have certain defects once humanity interferes with it.

soHow to balance "Automatic" and "Autonomous"", is probably the discipline of governance in the next need to consider a problem.

enforce is an autonomous organization that operates within the system based on common contracts, trust, and incentive designs within the organization. Automatic means that it can be a group of people or one person who make the rules and enforce them through an automated means such as a smart contract.. When people talk about DAOs, they probably mean organizations of both kinds.

Many open source organizations find the right common goals and incentives for each participant to collaborate and work toward a common goal. This kind of participation without automation can be considered as the basic form and prototype of DAO. Such as "billboard" BES experimental project (http://anadvertisementboard.com/#/) is an organization "self-governance", but it's limited to everybody to maintain mutual enthusiasm to complete this project, and each person's perception of self ability to complete the division of labor. Its advantage lies in that the participating contributors have no pressure and can do what they want to do. The disadvantage is naturally in the contract between people: when the organization becomes larger, it will be more difficult to comprehensively manage, which will lead to low efficiency of the organization.

What about a more flexible application scenario?Can DAOS be used to temporarily integrate organizations with a specific group of people at a specific time for a specific purpose? Some of these people are leaders/initiators, and some are people who are interested in participating but don't want to do much planning. This is an autonomous organization that has a certain governance function, but the rules are mostly set by the organization leaderThere it is.

The autonomous organization can pass some auxiliary tools to run more smoothly, more transparent, such as the BES designed a financing tool class based on the agreement of nonprofit organization: the initiator has a lot of permission to determine many parameters, such as total tokens, slope, etc., which in the late will affect every participant motivation. This financing tool is not a mutual contract formed through the wisdom of the crowd, but a case of one or two people initiating the design and then forming a better trust and stickiness organization through the automatic execution incentive of the smart contract. The people who have the organization token can discuss and vote on basic matters under this framework, and the overall incentive model has been designed at the beginning of the formation of the organization, and no one can change it.

In fact,Human organizations have always oscillated between fully democratic and very centralized poles. Can autonomous organizations integrate the best of both worlds, allowing those willing to lead to design the incentives at the bottom, while those willing to make only part of the decisions have the votes at the top to actually run things?This is a problem that needs to be considered more deeply.

Another conversation that took place at devcon gave me new ideas about the financing of certain Defi projects (which have decentralized finance, open, no-access, transparent, low counterparty risk, etc.) : Could a project like uniswap be financed through a DAO? uniswap is considered by many investors to be a 'value-through-but-not-capture' target, and there is no clear valuation method and estimated return on investment. But if it is now regarded as a public good, is there any change in the appropriate financing method?

It is a mismatch to let private money invest in public goods. It has no investment value for private investors, does not mean that there is no value; It should be funded by whomever it is of value to -- in this case, users. Of course, after I mentioned my idealistic idea, many people were skeptical that even users would donate money for no reason (it could be designed so that donors could withdraw at any time, but it would still be idealistic). To further support my theory, I can only quote Jade and Mikko's discussion of "school vs. company" on the Night Wind podcast:

"Be a sustainable product, based on the existing system of company is very difficult. Two days before a friend and I were discussing schools and companies, the company's life is very short, your purpose is not a product, is to make a profit. We are curious point is why schools can live so long time? And you don't know who is the founder of Oxford harvard, of course it doesn't matter at all. There's something about it that goes against the common sense of capitalism: nonprofits like schools depend on donations, which are not controllable or predictable. And yet, amazingly, historically, donations have been the most stable source of income, which is very, very different from our understanding of human nature."

The last thing I'd like to discuss is that during devcon, I felt that there was a perception among some people that no DAO, no DeFi -- from DeFi to DOpeFi -- is DAO as a tool to help implement open finance. One example I like to use is Betoken (https://betoken.fund/), which uses DAO as an incentive implementation tool for decentralized customer finance. It the core of the governance mechanisms (https://medium.com/graphprotocol/betoken-a-new-hedge-fund-dao-7abbfe53ab51) mainly embodied in the asset managers hold it Kairo tokens, The AUM of the asset manager is linked to his ROI through a formula to effectively motivate the manager to achieve better performance.

  What does the future hold for the DAO? Is there any hope for us?

CAI: Personally, I'm not particularly optimistic about the mapping of real-world governance/decision-making mechanisms to blockchain, However, Quadratic Voting/bonding curve/anger withdrawal, which can experiment only by relying on the technical features of blockchain, have greater expectations. I prefer to believe that the fundamental purpose of DAO is to significantly reduce the cost of organizational collaboration by means of technology, so as to produce a new model of human collaboration that cannot exist under the boundary condition that the cost of collaboration is less than the value of collaboration.

After all, since 17 years, the story of our internal and external brainwashing has been the theme of blockchain changing the relationship of production. And DAOs are certainly best suited to the blockchain's native genius of changing production relationships.

Mable: A lot of people say they think DAO is a long way off, but just like Web 3.0 didn't just snap our fingers and say we're moving on from 2.0, DAO isn't just going to suddenly all click and run automatically. Although DAO is criticized for its slow progress and often uses governance tools to find the content to be governed by "taking a hammer to find a nail", I think the Betoken example above has already reflected the point CAI Da mentioned about changing production relations.

I prefer to believe in the bottom-up logic of the DAO (with at least a few success stories to guide the thinking framework). While it's true that many people who participated in devcon 5 were somewhat disappointed and thought ETH 2.0 was a long way off, these developments are grounds for hope.

 Related References

The original intention of making this list is to have more articles to help our readers understand and think, but in the process of rummaging through the records, we found that there are very few Chinese materials worth recommending, which is probably a point worth reflecting on.

1. The State of the DAOs, in English, about the origin of DAO and various practical examples, recommended
 https://hackernoon.com/the-state-of-the-daos-b7cba318460b  

DAOstack White Paper, DAOStack White Paper
https://daostack.io/wp/DAOstack-White-Paper-zh.pdf  

3. The Story of the DAO its history and consequences (English), the past and present lives of DAO, which became very popular in 2016 and then disappeared after being attacked by hackers, is worth reading
 https://medium.com/swlh/the-story-of-the-dao-its-history-and-consequences-71e6a8a551ee  

4. The molochDAO collasping, English, some thoughts of Simon de la Rouleviere, who proposed the joint curve, extended from molochDAO
 https://medium.com/@simondlr/the-moloch-dao-collapsing-the-firm-2a800b3aa2e7  

5. Operational framework of a decentralized autonomous organization, Chinese, a blog from ETHFans community
 https://ethfans.org/topics/52  

6. Rise of the YangDAO, in English, published by US presidential candidate Andrew Yang for his campaign
 https://medium.com/@yangdao/rise-of-the-yangdao-a3fbc60d415b  

7. Moloch Summoning Guide, English, MolochDAO Overview
https://medium.com/molochdao/moloch-summoning-guide-12a2a288e0ff  

8. How to use the alchemy dapp and the genesis dao, GenesisDAO Overview
 https://forum.ethereum.org/discussion/19083/how-to-use-the-alchemy-dapp-and-the-genesis-dao

9. Artist in the Cloud, English, the idea of DAO's application in the field of art and AI, highly recommended
https://medium.com/@genekogan/artist-in-the-cloud-8384824a75c7 

10. Recommendation of books
The Meaning of Money -- James Buchan
Debt: The First 5000 Years -- David Graeber
. and Forgive Them Their Debt -- Michael Hudson

Original address:https://mp.weixin.qq.com/s/xLP6mRMfKKRirfxidydF1w

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