Why use a DAO in your organisation
Why Do DAO
People often ask “why use a DAO or a blockchain in an organisational context”? It’s a good question.
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 have benefits we don’t get from other setups, such as decentralised control, transparency, anonymity, and deep customisation of financial and governance mechanics.
To study this a little more, I’ve drawn up a chart of different organisational toolsets, what they offer, and what they lack.
Here are the features we’ll consider for each system:
- Decentralisation, i.e. less or no dependency on centralised entities like banks.
- Direct member 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 enable group decisions on different subjects to emerge from wide-ranging discussions?
- 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”.
- Privacy Does the system allow people to partake who may have reason to shield their identity?
- Reputation Ensures people can trust others to help the organisation thrive?
- Resilience Can the system withstand attack or sabotage from opponents?
Here are the organisational toolsets we’ll consider - each is considered to be required for a group of people to discuss, agree on and fund complex activities.
- DAO (on DAOHaus) with Discord and Snapshot for cost-free voting
- Slack with poll options, formal co-op structure with roles such as treasurer, and a traditional bank account.
- In-person discussions, co-operative or similar format, traditional bank.
| Metric | DAO | Slack co-op | In-person |
|---|---|---|---|
| decentralisation | yes | no | yea |
| direct control | yes | no | yea |
| transparency | yes | no | yea |
| complex decisions | yes | no | yea |
| conflict | yes | no | yea |
| errors | yes | no | yea |
| programmability | yes | no | yea |
| privacy | yes | no | yea |
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This chart gives us a sense of the strengths of different systems. There’s still a lot of scope for uncertainty, both because every 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…