Note — Jul 25, 2021

A Prehistory of DAOs

I’ve mentioned a couple of times that NFTs and DAOs (Distributed Autonomous Organizations) seemed like they had interesting aspects but I had yet to be convinced. This one by Kei Kreutler goes a long way in explaining the potential. Anything blockchain related is often completely veiled by the financial side, like trying to see through smog, this piece integrates the financial aspect but gives a much, much broader, contextualized, and understandable view of other aspects, like forms of organisation, governance, distribution, why they make sense, how multiple DAOs could interact, etc.

The author weaves together the evolution of organizational structures, traditional coops and gaming guilds (the part on DKPs is especially enlightening) across the short history of the technology and, perhaps more importantly, goes beyond that technical aspect to show that the cultural and community building work is vital.

Another eye-opening component of the article is in recognizing the gap in language between current adopters, ‘classic’ coops, and the differences in perceptions and labels between the old and new. “Shadow economics may be an apt term for when a group operates through an economic form it would not label itself as: DAOs as cooperative protocols and gaming guilds as market socialism.” Part of the challenge is in finding ways to bridge that gap and connect these different audiences.

Finally, the distribution of tokens by giving them to resources the group needs, instead of functioning only by monetary transactions, is another piece worth reading through and thinking about.

In 2021, a DAO could be described as a voluntary association with the operating principles of digital cooperativism. As voluntary associations, they are a cross-jurisdictional way for strangers, friends, or unlikely allies to pseudonymously come together toward common goals, supported by a token model, incentives, and governance. Members of a DAO can have representative ownership of its digital assets through a token, which often simultaneously acts as a governance right. […]

DAOs begin to introduce new dimensions that exceed what the operating principles of a digital cooperative notionally encompass. For this reason, as much innovation and emphasis should be placed on token distribution mechanisms that identify broader stakeholder participation as on decision making mechanisms. […]

Tokens may be one key to unlock the ownership economy, but to reach a more equitable version of this future, we must participate in crafting the culture around token distribution, mediation, and governance now. […]

Often used as an alternative model to the plutocratic one token, one vote model, reputational tokens, earned through participation rather than purchasing power, provide greater voting power in DAOs that amasses over time. DAOs can learn from DKP, which in contrast, acts as a private money system based on participation that can be spent on other digital assets, instead of only amassing over time. […]

By learning from their prehistory, DAOs can move towards a syncretic theory of organizations, meaning a theory which incorporates a wide range of cultural patterns, practices, and influences while recognizing its inherited political biases.