Research Summary: What is a DAO? Conceptual Foundations

Hi everyone,

My question is how does DAO stay consistent with its inception? Overtime things changes and so does organizations and communities. How does a DAO stay in the lines of its constituents beliefs?

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Why do you think that’s important? change seems to me like a feature, not a bug

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From the DAOs as communication framing, the idea is broader and has far-reaching implications. As in, seeing DAOs as a process is meant as a complex process of evolution where every communication event is shaping the DAO. Then, communication events can be more or less organised into steps, workflows, structures, etc. But in practice, it’s somewhat chaotic and thereby lies the power of DAOs to innovate and adapt compared to traditional organisations that “constrain” the conversation.

We’re now working on a paper on how to evaluate community health in DAOs and are looking at the network structure of the communication between members as a key factor. (You can keep up with it here)

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I think its important as you don’t want a organization that always consistently changing without a good base or foundation of certain principles. Change will happen but will this change the DAO entirely of its original inception of ideas or form something entirely different?

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I love this summary. It’s simple and straight forward. Well done @danielo

Just a quick question. Do you think DAO at anytime can be discriminatory in its decision, especially against the minority votes and can they have a remedial action?

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DAOs can have all kind of governance mechanisms. Many ways to go about it although that’s a whole other conversation.

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ah yes, very interesting point. Usually, foundations are a cantilever for change (one enables the other, otherwise you face a rebellion by a pocket of the community).
In open organisations (including corporations) the challenge can be a takeover by newcomers “barbarians at the gates” sort of thing.

although this is also a whole other discussion

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Hi Danielo, your article is well articulated, i must say, i learnt something new today, from your summary, can i say that Decentralized autonomous organizations aren’t perfect because they are an extremely new technology that has attracted much criticism due to lingering concerns regarding their legality, security and structure. what do you think?

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Thank you for your response.

Is there a repo or major article on the various mechanisms?

Thanks for your response.

Can we say the network structure of communication between members refers to the decision-making models?

Well this is a very important question and I think I have some answers to it. The death of a DAO may be caused by competition in the DAO, Hacking (just like the case of Badger DAO when some funds in it treasury was stolen) & conspiracy. You can get more info
from my explanation here you’d see the reasons why a DAO may die.

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Consensus is required for DAO decision making.
The world has a long history of having difficulty modeling governance systems.
Most DAOs have developed a system of decentralized governance that uses user behavior as recorded on-chain to determine each user’s influence in deciding governance issues. This is intended to directly counteract the effect of whale activity in token acquisition on system governance.

This is significant because behavior-based voting cannot be easily attacked or influenced solely through the acquisition of tokens. Such an attack would necessitate sacrificing invested token value while influencing the actions, behavior, and time required to build weight in voting (including acquired skill to compete in contribution to the platform by which the behavior is measured).

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@danielo
According to our definition, SourceCred is still officially considered an organizational collective as long as there is communication taking place, decisions are being taken, and those decisions are attributed to SourceCred.
generally agree, but as we expand, things become more challenging? For starters, a handful of projects continue to use SourceCred to distribute substantial sums of money.
It will be quite interesting to watch what uses and applications ENSs enable, given they already seem to be confined only by human imagination. Even if the number of contributors has decreased, a core group has persisted in meeting and making decisions while taking part in discussions on discord and discussion topics like this one.

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great observation, @kingdamieth
In addition to your comment, DAOs make use of a homogenized set of tools to function in an efficient state. some of these tools can oftentimes be combined to form a multilayered structure. I will highlight just one tool due to similarity and just for brevity.
Off-chain snapshot: An off-chain platform to conduct token-weighted votes through signed off-chain messages, where a snapshot of on-chain proportions and addresses is taken to decide voting power. The results are used to impact ensuing actions as specified by the DAO. This approach is worthwhile because members don’t have to pay on-chain transaction fees to vote, thereby increasing the chances of more potent community participation.
In response to your question @Samuel94, this is a link from Aragon, it’s a DAO, gives a more elucidate response to your question, here’s the link: How do you protect minorities in a token-governed DAO? | Aragon Network Agreement Town Hall - YouTube,
i think this is a great great source of information to those who need a clearer and easy to comprehend response to @Samuel94 question, be sure to let me know if the video was helpful by via comment .
@Kingdamieth, thanks for your response, your comment is quite succinct, care to share your sources/source of information on the forum for research?

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Thank yo @GloriaOkoba for linking me up with a youtube video on minority versus majority protection in aragon network. It’s interesting to learn that DAO can institutionalise minority protection clauses . However, video didn’t explain how this clause (s) works…I know a response suggesting placing limit on budgeting so that rate of change is bounded by time instead of specific decision, but was just a mere suggestion. I will appreciate your response as to how the clause will work without affecting governance decisions since it may not be totally desirable to limit governance decisions

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This is a beautifully written summary. I would like to add that in my opinion, DAOs are from one perspective more akin to transactional spaces governed by a defined dynamic. Transactional spaces are not necessarily organisations although they may be such where they have members and not just participants. They are even more so where there is a procedure for acquiring and relinquishing membership status. The distinction between membership and participation is key. For instance, anyone who transacts in a market is a participant in that market but not everyone who makes use of an organisational service is a member of that organisation. A point here is that under conventional arrangements, transactional spaces are governed by regulatory organisations, whether public or private.

From a more robust perspective, DAOs involve the convergence of an organisation and a transactional space. The organisational element is found in the governance function of DAOs, where members collectively participate in governance through consensus-based procedures. Having said that, DAOs also have other features like a common goal that make them look like organisations.

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I adore this topic and the thought-provoking discussions it has generated. The debates that take place on the SCRF forum will be essential to the expansion and development of the blockchain ecosystem.

My question, however, is “can a DAO be created to be truly decentralized and autonomous to achieve its objective?” I ask this question because the known DAOs are not truly decentralized as they still seem to be a central source of authority. For instance, the oldest DAO members will always have more authority than the newest members of a DAO

SourceCred is implied to still be alive by @Tolulope’s statement that “DAOs die when their mission comes to an end” and as communication and interactions are elements of DAOs, they never truly die but they can deteriorate.

I guess DAOs die when the final member of the DAO stops using it or passes away

@BenjaminMukoro 's opinion that DAOs should be viewed as transactional spaces with participants rather than as membership-based organizations has also challenged my perspectives on what DAO should be. This means that for the continuity of a particular DAO to be ensured, more participants who believe in the vision of the DAO should be added. It also thus implies that the DAOs ought to have robust goals that can outlive the participants.

Welcome @BenjaminMukoro to the forum

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hi @Samuel94, glad you found the video helpful,however, i don’t know about how the clause will work without affecting governance decisions but i will be sure to find resources that can give you a profound answer to your question as soon as possible .
@forum feel free to answer this.

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thanks for the addition @BenjaminMukoro , very enlightening and welcome to the community. from your comment i can tell you are definitely in the right community. will love to see more comments or possibly a summary from you .

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Minority protection is hard when taking into consideration that almost all DAOs exist in a legal gray zone in terms of organizational practices even when legally registered as either LLCs or Coops. Also, because of the “code is law” culture of DAOs, speaking in terms of a legal documents outlining clauses won’t apply to the great majority of them. Instead, automatically executable smart contracts, protocols and mechanisms take the place of clauses and conditions.

The most characteristic example of a mechanism for minority protection is MolochDAO’s ragequit, where a party can withdraw their proportional share from the pool of commonly staked resources at any point if they feel like they are misrepresented by the final outcome of an important proposal. Ragequit is a modular function inside of the original MolochDAO smart contract and has been replicated by other orgs such as Gnosis Guild (Exit Module) and 1 Hive’s Dandelion Framework. There are probably other such solutions being developed at the moment but ragequit is the most established.

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