There’s a lot of talk about DAOs and what they could be in the future but very little writing about how to actually launch one. This absence is partly because the subject is nascent but also because it's hard to separate the substance from the hype. No one wants to admit their DAO is terrible and not working. I hope to buck that trend.
DAO tooling is the business infrastructure of the 21st century. This category includes anything that enables collective ownership and management of digital assets. The future of business is onchain.
Decentralization is about preventing the exploitability of valuable systems. It's about removing single points of failure by eliminating intermediaries. Decentralization is not an end in itself. You can smash a mirror into pieces to "decentralize" it, but this doesn't make it more valuable.
In Protocol-first DAO Strategy, I argued that DAOs should build on value-generating protocols before cultivating broader community engagement. Specifically, I endorsed the advantages of framing DAOs as governance-minimized platforms. This advice may have sounded irrelevant to DAOs operating in non-protocol settings, but we may need to expand our imaginations.
One of the big promises of DAOs is data transparency - the idea that every person, every decision, and every resource could be crystal clear on an open programmable ledger. This level of visibility is the dream, but what's the reality?
How and why DAOs came about will inevitably influence how we think we can and should use them. If they came about exclusively as a response to oppressive and extractive corporations, it's unlikely that we'll envision them as potential complements to traditional businesses.
Public goods are excellent, but who funds them? Are all DAOs public goods? How can a DAO be autonomous if its continued existence rests on charitable grants from others? Is profitability "extractive" at best and a blatant violation of the hyperstructure thesis at worst? When faced with the rhetoric of the current Web3 ethos, these are the questions you must ask yourself.