The Intricacies of Decentralized Projects: Unpacking da0's Current Structure and Challenges
Opinions abound when it comes to defining a Decentralized Autonomous Organization (DAO). While views may vary, a common consensus remains: DAOs must embody decentralization and autonomy. Let's use this as our starting point.
At its simplest, decentralized autonomy refers to individuals self-governing their activities without any overarching authority. For a group to function as an 'organization', there must be a unifying force that binds all members, usually defining the core of the DAO.
For traditional companies, this unifying factor often lies in the intentions of resources and funding. Employees adhere to the organization's rules largely because they are compensated for their work, at least in most cases.
However, the cohesive element for DAO members must differ. Having a core element remains crucial, which could be virtually anything. But, to foster a better world, values or missions should probably assume centrality.
At this stage, I perceive DAOs (or impact DAOs) as a collective of individuals who unite because they share the same values or mission. They aim to ensure these shared principles are not swayed by capital and resources and can act on these values per their interpretation, with like-minded people around to assist.
Interestingly, many NFT/Token DAOs (though not all) did not originate with this approach. Most DAO members are united by a singular goal - profitability. This resemblance to the core of centralized companies diminishes the uniqueness of DAOs and can lead to issues when a "decentralized" team fails to manage capital "efficiently", an area in which DAOs typically do not excel.
To address these concerns, I have outlined a structure intended to prioritize people and values over resources and capital (without neglecting either). This structure comprises three layers: the social value layer, the action layer, and the resource layer.
The Social Layer - A Playground Where People Converge and Values Forged
The social layer arguably stands as the most critical layer. It should also ideally serve as the starting point for all DAO activities. It's the nexus where people converge and values get forged. Many DAOs have their roots in study groups, content translations, or even book writing. Through the exchange of knowledge, participants gain a deeper understanding not just of the subject matter, but also of their peers. Relationships are built, and implicit consensus is achieved (for example, da0 members believe in the value of public goods). These values are explored, communicated, and debated. Most leaders in the social layer are either online or offline event organizers, who facilitate the creation of the right relationships and conversations.
da0 has exceptional leaders within its social layer. da0 c0w0rk is a bi-weekly physical gathering where members work at the same location without specific agendas, recently partnering with BZD to extend their respective networks and shared values. da0 Learning organizes monthly study groups (in collaboration with the fantastic Web3 For All study group), focusing on governance, public goods, innovative societal possibilities, and more.
Despite the vibrant social layer of da0, which has successfully brought together a remarkable group of individuals, challenges persist. A primary challenge lies in broadening the playground, involving more people who care about our shared values, and enhancing diversity. The other challenge is linking this shared knowledge to tangible actions to realize the impact we aspire to make. These are perhaps the most crucial priorities for da0 at the moment.
The Action Layer : The Explorations That Build Trust & Demonstrate Possibilities
da0 is currently home to approximately a dozen initiatives, each displaying varied levels of activity. While some are immensely active, others might be awaiting the right moment to make more substantial moves. It's important to provide sufficient space for all projects to progress at their own speed.
Not all of these initiatives are resourced-backed; some might be personal passion projects. If the individual behind it continues to receive valuable feedback and connections, the project would likely remain within da0's domain. Conversely, if a project no longer finds value in staying within this framework, moving on is equally acceptable.
It's crucial that these projects feel both comfortable and meaningful within da0, achieved through connecting with like-minded individuals. These projects are not only exploratory, demonstrating the various possibilities within this framework, but they also offer individuals the chance to collaborate without having to commit excessively. For instance, The G00D Class, a class we organized at National Taiwan University, is a prime example. We enlisted various da0 members to give talks and engage with young talents interested in the field, and we explored how da0 could function as an educational entity without demanding an inordinate time commitment from anyone.
The g0v tradition of hosting bi-monthly hackathons presents a great opportunity for individuals to showcase progress and articulate their beliefs, also attracting a wider audience. However, we recognize that da0 hasn't yet successfully replicated this model.
The action layer faces several challenges. When the expansion of the social layer stagnates, it often leads to a similar stagnation within the action layer. Without an influx of new people, perspectives, or energy to explore new frontiers and build relationships, progress is likely to stall.
Another challenge is that not all projects can count on consistent resources, despite the community's best efforts to support each other. In theory, it should be easier to find support from like-minded community members within the organization. For example, Blocktrend, recognizing the value of public goods, directed traffic to da0 podcasts. However, resources driven by connection are never guaranteed. Rather than individuals seeking resources independently, resources are sought as a collective community intent on aiding each other's causes.
This leads us to one of the most significant challenges confronting this type of organization.
The Resource Layer: A Closer Look at Funding
While conversations can serve as the foundation for consensus and relationship building, they often fall short without actions, as they tend to devolve into unidirectional criticisms. Actions, on the other hand, provide the context necessary for informed decision-making.
However, actions without resources tend to be inefficient or unsustainable, often both. Meanwhile, actions backed by resources not only facilitate progress, but also expose the true character of the individuals involved, further strengthening relationships or leading to their dissolution.
Nevertheless, resources, particularly funding, can be a complex matter. Resources usually come with specific directions or objectives, whether for profit or philanthropy. Even crowdsourced funding operates on this principle. For instance, Bored Apes NFT holders aspire to profit from their investment, as evident from the current sell-off.
Therefore, it might not be feasible for a decentralized organization to maintain a single treasury. When sources of funding have specific intentions, it's challenging to secure funding without a clear understanding of how the money will be allocated and who will be held accountable for the results.
However, resources remain a critical component to fuel actions. The norm should be to prioritize actions based on values, and with a proven track record, resources can follow. This is why retroactive funding seems to fit better in DAOs, although it remains nearly impossible to not secure at least some proactive funding.
Funding from a single source often carries a singular intention, which leads to centralization. My personal take on resource allocation in decentralized organizations revolves around not eliminating resources, but diversifying funding sources. That's why the coordinators roles at da0 is open to anyone who can bring resources into the organization. With a variety of funding sources and a strong value system, da0 could potentially evolve into an action-oriented DAO that adheres to its core values, without being subservient to a single source of funding or a singular intention. It also empowers individuals within the organization to reject one source of funding while having access to alternatives.
When resources flow in, it is my personal belief that a centralized taskforce with clear accountability is required. Someone has to be held responsible; otherwise, funding might not be secured, and the desired goals may not be achieved.
Despite these considerations, da0 still faces significant challenges. One challenge stems from the perceived centralization of the resource-driven taskforce. This often leads to a lack of understanding about why certain projects are privileged over others, particularly during the early stages, when sources of funding are hard to come by without good enough credibility.
Another challenge is the inadvertent emergence of leadership. The initiation of any organization necessitates a driving force for momentum. In the case of da0, Noah is the example. In an organization where actions are prioritized, the leading individual might inadvertently create a disparity between their influence and that of others. This becomes particularly problematic when there are apparent conflicts in values.
A Plea for Re-establishment
In the quest to remain faithful to the values of a decentralized organization (whether it utilizes smart contracts or not), there may be a necessity for a reset mechanism.
The order of priority should be: values first, actions second, and resources last. In the event of an intentional or unintentional creation of a power gap, the community ought to invoke a reset. It is crucial to initiate a process to re-evaluate and redefine the consensus on core values. In these discussions, the core values and principles should be clarified or adjusted, the code of conduct should be re-established, and these processes should not be led by the existing leadership.
Rooted in these fundamental values, communities like da0 or others may choose to decline resources, disassociate with current projects, and provide future actions with direction.
My primary concern, however, is the potential blanket rejection of all resources. The absence of resources leads to inaction, regardless of our perceived identity as an organization. We must find ways to coexist with resource providers, as this coexistence is what will enable us to effect meaningful change.
Returning to its roots, the fundamental values of da0 should be established through a decentralized process, where actions are autonomously driven without unnecessary dictations. Meanwhile, resources should serve as catalysts for actionable outcomes. This approach ensures that da0 operates as a DAO that successfully executes tasks and achieves its objectives.