Hand-picked articles to understand the current state of the DAO ecosystem

1. There is no agreed definition of decentralization

2. There are 4 key principles to consider when decentralizing your DAO
Be careful not to over-index on being permissionless.
DAOs must engage the community throughout the process.
DAOs need to codify core activity and engage community members.
DAOs need to be mindful to balance engagement with delivery.

3. Tools and processes will define effective power transfer in DAOs

4. DAOs should not underestimate leadership accountability, continuity, and off-boarding

• Set up a minimum viable DAO.

• Spin up versions/fractals of DAOs from amongst themselves.

• Be constantly forming, deforming, and reforming.

• Give contributors the ability to use the token within the DAO and with other networks.

1. Prioritization: The skill of distinguishing the most important from least important is one you must possess as a contributor. It helps you cut down on time spent in DAOs to develop yourself. Using time trackers like Toggl Track and setting due dates to tasks helps bring this skill to life.

2. Self-direction: You need to be confident, creative, and have an understanding of what the DAO needs. Set daily, weekly, monthly goals. Having a yearly theme is also a bonus as it helps you keep track of your approach to each year.

3. Nonviolent communication: You need to know when and how to speak. Rather than blaming people, use “I feel” statements. If offended, pause and take a breath before responding. The book, Nonviolent Communication, is a good way to get up to speed.

4. Self-awareness: Knowing when to take a break and when to work is vital to living healthily as a DAO contributor. Put down your thoughts and feelings on a paper regularly, go for walks, optimize one thing at a time.

5. Team building: Bringing people with different skill sets to work on a project while maintaining peaceful co-existence is team building. It helps move the DAO forward. Observing great leaders, building on a small scale first, and reading books on team building are ways to get started.

1. Calm

2. Slow

3. Abundant

4. Playful

5. Connected

🔥 and 🧊 insights from across the DAO ecosystem

• DAOs are novelty search engines which can more efficiently explore a search space by enabling many cooperating teams to collect and integrate stepping stones.

• Companies are a convergent tool for pursuing singular visions.

• The strength of the company’s hierarchical model is the ability to pursue singular visions arising from a leader, by aligning the work of many individuals towards a convergent outcome.

• DAOs are a divergent tool for exploring the territory and are networks that are defined by nodes and links, corresponding to people and relationships. DAOs have the ability to self organize, like a democratic nation state composed of many individuals and organizations all contributing to its growth and change.

• DAOs are not suited to pursuing one vision. They are optimized for exploring many divergent visions simultaneously, emerging from individuals making decisions based on their local context.

• DAOs can be conceived as containers for many weakly-aligned hierarchies. Rather than replacing hierarchies, DAOs create a mechanism through which a single organization can allow many hierarchical teams to explore different directions simultaneously.

• Volatility will increase as collective human progress increases in velocity and solves more problems. This leads to an abundance of hype and drives talent to solve the problem, creating a bubble. The swarm of labor will gravitate towards problems that need to be solved, and these problems can attract people based on a variety of factors:
Total Addressable Market (TAM)
Economics
Visibility of the Opportunity
Technical Difficulty of the Problem
Market Structure / Barriers
Impact
Sexiness
How Solved the Problem Already Is

• Web3 has a variety of qualities that attract “The Swarm”. It’s especially suited for solving problems with no clear, first-order economic opportunity, because it has economic incentives built-in. (Regenerative Finance, Public Goods Funding, etc.)

• As researchers at McKinsey put it, organizational health is “...more than just culture or employee engagement. It’s the organization’s ability to align around a common vision, execute against that vision effectively, and renew itself through innovation and creative thinking. Put another way, health is how the ship is run, no matter who is at the helm and what waves rock the vessel.”

• Although the degree of decentralization and autonomy may vary, as human organizations, most DAOs operate similarly. For example, the use of Discord as the dominant communication medium, is standard practice for most DAOs.

• Contributors provide talent, the collective human capabilities that add value to the organization and make up the working groups of the DAO, also referred to as 'guilds' or more generally, 'teams.’

• Both Co-ops and DAOs have a culture that prioritizes collective control and the creation of shared goods. They also both seek to expand collective ownership and governance of digital infrastructure.

• When a business chooses a governance model, it conveys the objective of the organization. It signals the desire for maximum alignment with an organization’s community of users. Similarly for DAOs.

• Each governance model comes with its own decision-making framework that determines who makes decisions at every level. Decentralized governance hands over decision-making and execution powers to its community at every level.

• Protocols are designed to be the lowest-common-denominator abstractions that other products can leverage. A successful state for a protocol is to become a standard with network effects.

• It may be controversial, but non-protocol web 3 projects may find decentralized governance unhelpful. As a non-protocol, the project objective is growth which occurs by servicing more users and different use cases with additional product functionality.

• Choosing the right governance mechanism is a strategic advantage for any organization, and deciding to decentralize is no different.

• Users owning tokens do not make a project sustainable. Value needs to be provided for users to stay.

• To encourage user retention, new token administration designs are implemented. We can see from the play-to-earn mechanism deployed by the Axie Infinity team, and the bounty programs carried out by DAOs.

• Permissionless access to networks allows for the development and growth of ecosystems of projects as well as contributors. The emergence of CC0 (no copyright reserved) has seen a great number of projects developed.

• Participation in value creation was made possible as a result of users becoming owners earlier. Being involved early makes contribution much more easy and smooth.

• As ownership is becoming more adopted, we are certain to see more participation across the varieties of software products.

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