DAO Tokyo is probably the most locally-styled blockchain event I've ever seen. The taxi doesn't arrive at the grand entrance of the Four Seasons Hotel, but instead stops under the solemn red torii gate. Instead of billboard advertisements bought by exchanges for large sums of money, we see delicate white cherry blossoms hanging above people's heads as we enter the venue. The event space is adorned with neatly arranged Japanese wooden chairs and round cushions. Even the bell sound that signals the end of the forum imitates a temple ceremony. It's hard not to admire the cultural and aesthetic depth of the Japanese people.
The event brought together many leaders from decentralized exchanges and foundational protocols to discuss DAOs, including Aave, Lens Protocol, Uniswap, and more. Only a few DAOs start from something other than Treasury and resource allocation. Jacky, a good friend of da0, is one of the relatively few that start with a vision and mission. The difference between the two can be clearly seen in the way they answer questions: one seeks to balance profit motives, while the other aligns with people's passions.
Of course, sometimes the boundaries are not so clear-cut. What is clear is that DAOs have diverse approaches without much consensus, but they all face similar challenges. Below are a few questions that were repeatedly explored in multiple presentations (regardless of the topic):
Should DAO operations prioritize effective collaboration or decentralization? How can efficiency be improved?
Why can't DAOs completely eliminate the need for trust in people? How can contributions be incentivized?
Is a DAO a profit machine or an experimental field? What is its goal?
How transparent should decentralized organizations be? Is salary transparency helpful?
To what extent should "code is law" be implemented? What level of decentralization is considered sufficient?
Back to the hypothesis…
Whether it's a DAO or a company, both are just mechanisms for people to collaborate. Vitalik's "DAOs Are Not Corporations" explains this clearly. However, digging deeper, there should still be some differences in the core philosophies between DAOs and companies. The Web3 generation seems to have specific and predetermined expectations for DAOs, such as:
DAOs must have voting
DAOs must issue tokens
DAOs must strongly lean towards using smart contracts to address governance issues
I'm not sure whether these "musts" are directly related to the goals of decentralized organizations, but perhaps by clarifying the advantages of decentralized organizations and turning these "must(s)" into "may(s)," we can think more clearly about the necessity of these mechanisms. Taiwan's famous decentralized organization "g0v" has successfully operated for ten years and has produced many globally renowned successful projects. During this time, they have maintained a relatively decentralized operation without ever voting or using smart contracts. Perhaps DAOs can learn from this alternative philosophy of organization and form a more flexible operating model for themselves.
How to set goals based on DAO's strengths? Or what kind of goals are more suitable for DAOs?
Decentralized organizations have some inherent, irreversible characteristics. Since they are decentralized, it means that divergence is a strong feature of such organizations. Divergence can never be efficient, but it has its advantages. Instead of thinking about how to make decentralized organizations more efficient, it's better to consider their greatest strengths and make uses of them.
In design thinking, if you want to find solutions to certain problems, you first diverge and then converge. During the divergence process (brainstorming is an example), there's no criticism or instruction, not because all ideas are good ideas, but because even the worst ideas serve a specific purpose. They can increase the group's sense of security and may open the door to new possibilities. Each bad idea is a stepping stone for good ideas, moving toward broader possibilities. The purpose of convergence is also clear: we need to focus our attention to do something well, a timeless fact.
Whether in brainstorming sessions or decentralized communities, more ideas or projects can play a role in inspiring a sense of security and creativity. However, there is a key factor: ideas or projects must be able to build on each other in order to open up more possibilities. There shouldn't be "my" ideas in brainstorming, and "open source" in decentralized communities can maximize the efficiency.
The innate nature of DAOs is exploration, with the ideal of blooming and stacking together.
The inherent nature of centralized communities is efficiency and execution. If you want to do something predetermined and clear, decentralized organizations are far less effective than centralized organizations. However, for relatively open problems, the range of answers that centralized organizations can provide is often much less extensive in exploration than decentralized discussions.
You might still have some questions in mind. It's easy to understand brainstorming, but if projects are blooming everywhere, doesn't that require costs? This will be addressed in the following paragraphs.
Does DAO need voting? Without voting, does the governance token have a function?
Do decentralized organizations need to make overall single decisions? The g0v community from Taiwan has not voted nor made single decisions as a whole in the past ten years. The closest thing was a discussion on whether g0v should establish a political party (perhaps misheard), but once a political party is established, decentralization is impossible, so it doesn't work in principle. But even if it's not this issue, the only centralized decision that most decentralized organizations should make is the overall vision of the DAO and its resource allocation.
One problem with voting by everyone is that, regardless of the consensus reached, the decision-making and actions for achieving consensus are generally disconnected. Even with the automatic execution of on-chain smart contracts, the execution prepared in advance is disconnected from the consensus (and inefficient, although this may not be the most important thing). There might be gaps in expectations between those who give opinions and those who execute, as well as risks in execution. In any case, the two sides may not match, especially in decentralized organizations, where the differences in expectations for execution results are naturally greater (because not only the boss is imagining). Can you imagine what problems might arise in execution if you were originally a member of a DAO core team, and after a vote by everyone, the consensus was to move towards a vision you don't agree with?
Another problem is that in many executions, consensus often does not represent the best result for everyone. We won't go into detail about Vitalik's article, but Ricky from SeeDAO recently shared various aspects of MakerDAO at da0, showing that financial decisions made by everyone often lead to higher risks and lower profits. If a DAO has profit as its single goal, this is not ideal.
Action is voting, and time is the token.
“Put your hands where your mouth is.” The original English phrase was not about hands, but money, but I freely modified it. If we replace voting with actions, the above problems will not occur. Under this premise, decision-making and actions will not be disconnected, because if an individual thinks a direction is really worth exploring, he or she will do it. Then others will learn from it, see the results, and let others build on it openly. Of course, you may ask how to do things without money or how it would be better than a decision made by everyone. I will explain that in the next paragraph.
If action is voting, what do I need governance tokens for? What I spend is my time, and action has another advantage: no matter what, the organization is always learning and building, never stagnating.
Action without money? How?
There is no doubt things can be done without money. Facebook was created by Mark Zuckerberg in his dorm room, and Apple was put together by Steve Wozniak in his garage. You might say that these are lower-cost stuffs, but what about those with higher entry barriers? I would argue that those tasks that require more resources to start should be left to centralized organizations because not only do they have higher execution efficiency, but they also have higher fundraising efficiency. Decentralized organizations should do things that are easy to stack, things that can be completed with time, and use the power of everyone to build up, rather than break through with the power of one person.
Attributing incentives retrospectively, allowing people to come and go freely.
Decentralized efforts cannot be supervised; it should expand infinitely. If we limit the possibilities of expansion, we limit the space for exploration and the real advantages of decentralized organizations. On the contrary, if we expand supervision, our personnel and trust costs will also expand infinitely, which is a dead-end, so don't go there. Assuming we do not supervise or guide, how can we get the community to complete tasks aligned with the vision? The answer is the post-event rewards we have been talking about. If an open-source project obtains more resources within the DAO afterward, and a closed project does not obtain any resources within the DAO, then more projects or individuals will strive toward the open-source direction. Of course, mechanisms such as quadratic funding or voting can also play a significant role in this framework.
At the same time, in decentralized communities, people's coming and going is a common occurrence, and we must get used to and understand this.
Reward continuous and long-term contributions with trust.
However, understanding does not mean that we should reward or encourage such behavior. Continuous and stable contributors will naturally gain more trust and recognition within the community, while individuals who disappear without reason will not accumulate good relationships and trust in the community. Due to the fluidity of personnel in decentralized communities, we should emphasize and highlight those behaviors that strive to build trust.
How can I motivate DAO contributors?
As mentioned earlier, it is impossible to control the unlimited expansion of direction. Without preloaded resources, how can we know that contributors will do their work well? My answer is actually quite simple: let them do what they are passionate about, and if their passion aligns with the DAO's vision, provide incentives afterward.
No one should be a supporting character; let the central figures follow their passion in the infinite garden.
If you have read the Japanese manga "Blue Lock," you may have heard of the concept of "protagonist consciousness." People have the strongest motivation and energy to complete tasks when they believe they are the protagonists and are creating their own stories. Passionate individuals do not need supervision; they will achieve results beyond expectations and continue to move forward. The task of DAO leaders is not to supervise and control, but to inspire their imagination, find relevant resources to start with, and pay attention to whether they have enough energy and health to continue pursuing their dreams. The task of a leader is to be the supporting character in their stories.
From Managers and Directors to Inspirers and Supporters, being a supporting character in the stories of contributors.
What should DAO organizers focus on?
The difference between centralized organizations and DAOs is that the leaders should not be the organizers of the DAO. Instead, DAO organizers should ensure that those who share a common vision have room to contribute and can help each other, like the Ethereum Foundation's Infinite Garden, continuously nurturing new possibilities.
The foundation of a DAO is human relationships.
The most important thing to understand is that the foundation of a DAO is human relationships. Decentralized organizations will have high and low energy moments, and during high energy moments, they need to know how to use that energy to support more people to showcase their expertise. In low-energy times, they must maintain hope and keep taking action. The most important focus should be on building good relationships among the group members so they can encourage each other during low moments and spark ideas during high moments. This way, the Infinite Garden can continue to thrive.
Who sets the vision?
I briefly mentioned in the voting section that setting the vision could also be a decision that the DAO as a whole must make. A centralized organization typically has a clear goal, as they need to execute and align results. However, the vision of a decentralized organization may be better when it is broader. Instead of describing a single goal, the vision of a decentralized organization may be more like describing a world. It must be broad enough to allow everyone to play an essential role within it.
A compromised vision is dull and uninspiring.
I often tell this story: my former professor used to say that if we decide to stand in the middle of the road, we will probably get hit by cars from both sides. A compromised vision and world are usually realistic, while a utopia is a place we most likely will never reach. However, that "No place" (a direct translation of "utopia" from Greek) is often more attractive and inspiring than reality. Although we may not be able to reach the other side, we all believe we are moving in the right direction.
DAOs scale with leaderships
Audrey Tang once said that decentralization is a tendency, which has left a deep impression on me. A completely decentralized organization has experimental significance, but if the organization is not born for experimentation, but rather to achieve a certain vision or goal, complete decentralization will only cause complete chaos and disorder, and the worst-case scenario is probably eternal tranquility.
If a DAO wants to scale, there must be more individuals initiating leadership and execution. These leaders do not necessarily have to start a brand new project; they can stack existing projects, connect projects to each other, or dock various types of resources into existing projects. These are all performances of leaders within decentralized organizations.
Decentralized organizations need multi-center leadership to blossom everywhere and guide various passions towards a common vision.
The true purpose of smart contracts and tokens
I have briefly described how a decentralized organization like g0v or da0 can operate without voting, smart contracts, and governance tokens. Although these governance technologies can sometimes be helpful, they are not essential for decentralized organizations. DAOs are more like experiments in leadership philosophy, rather than arenas for utilizing technological tools. If we can change the way we collaborate with people, we have the opportunity to explore more possibilities.
Contrary to the current blockchain philosophy, I believe that smart contracts are most effective when trust cannot be established with the other party, such as one-time platform users. Within organizations, we should be more proactive in building trust and understanding each other. After all, people with a shared vision are rare, and we should cherish each other and try to break through the boundaries of reality together.
Alternative DAO philosophy list
The nature of a DAO is to explore, blossom everywhere, and stack upon each other.
Action is voting, and time is the token.
Attributing incentives retrospectively, allowing people to come and go freely.
Reward continuous and long-term contributions with trust.
No one should be a supporting character; let the central figures follow their passion in the infinite garden.
From Managers and Directors to Inspirers and Supporters, being a supporting character in the stories of contributors.
The vision of a decentralized organization is more like describing a world; it must be broad enough to allow everyoneto play a role within it.
The foundation of a DAO is human relationships. the stronger they are, the better the organization can overcome difficult moments.
A compromised vision is dull and uninspiring.
Blockchain is most effective when trust cannot be established with others; we should actively engage with people who share our vision.
DAOs scale with leaderships.
By adopting these alternative philosophical ideas, a DAO can create an environment that fosters exploration, trust, and collaboration. Emphasizing the importance of human relationships and valuing the unique contributions of each individual can help decentralized organizations overcome challenges and work towards a shared vision. By remaining open and embracing a broader vision, DAOs can inspire members to pursue their passions and create a thriving, sustainable community.