01 May 2023

Why Do DAO

People often ask “why use a DAO or a blockchain in an organisational context”? It’s a good question. The tools we use play a decisive role in outcomes.

Related questions include:

  • what could you use instead of a DAO?
  • can DAOs give us something that we can’t get elsewhere?

Some people think that DAOs do give us options we can’t get from other setups, such as decentralised control, transparency, and programmability of financial and governance .

To study this comparison a little more, I’ve drawn up a chart of different organisational toolsets, what they offer, and what they lack. The comparison is tricky because DAOs can substitute for a whole stack of things, so there’s no one-to-one matchup, but we’ll try.

Here are the features we’ll consider for each system:

  • Decentralisation (less or no dependency on centralised entities like banks)
  • Direct member’s control of resources and decisions
  • Transparency of resources and decisions Members and external parties, like potential funders or collaborators, can see the DAO’s assets
  • Ability to reflect complexity of organisational decision-making needs Can the system
  • Conflict resolution If people are unhappy about situations arising in the group, what tools are there to resolve things?
  • Fixing errors Can the system let us revert mistakes such as erroneous payments?
  • Fine-grained programmability of organisational mechanisms Customisability of the system to achieve specific needs e.g. “We want two-rounds of voting for certain decisions”.

Here are the tooling arrangements we’ll consider. If you know of other options, please let us know.

  • DAO (on DAOHaus) with Discord and Snapshot for costless voting
  • Slack with poll options, formal co-op structure with roles such as treasurer, and a bank account.
  • Messaging group

This chart gives us a sense of the issues at play. Clearly there’s a lot of scope for uncertainty, both because each project has different needs and because we’re still learning how DAOs work.

#Is a DAO right for you?

With the above in mind, how do you decide whether to use a DAO for your project?

Post tbc…