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ImagineDAOs

DAOs are a brand new form of organisation.

They inherit many of the capabilities of classic decentralised organisations: they increase localised autonomy, achieve scale, align with context and enhance creativity and innovation. DAOs extend beyond these classic organisational structures by leveraging crypto and blockchain technology, principally to create genuine autonomy.

Using decentralised technologies, allows us to create organisational structures the world has never seen before. Truly digital organisations, where privacy and personal sovreignty are paramount. They are truly ground breaking.

This document is designed to help you imagine a DAO idea. The book on DAOs has yet to be written so these are pure guidelines. There are no rules.

Enjoy.

D

What is Decentralisation?

We conceptualise Decentralisation as: “the process of diffusing power”.

The important notion here is that decentralisation is a process.

If we imagine decentralisation as a continuum from A, one person controls all the power, to B, every actor in a system controls the power perfectly equally. Then we can imagine that A is easy to achieve and B is practically impossible to achieve.

So decentralisation becomes the process of moving from A to B.

We pick diffusion because it reflects an often messy process of moving from a higher

concentration to a lower concentration. A fully diffused system is purely isotropic. Perfectly distributed power means nothing gets done, death.

A

What is Autonomy?

We consider Autonomy to be: ”the ability to self-govern”.

The notion of the self is important here, it can be viewed at any unit of analysis from the individual to the nation state.

DAOs champion the extreme ends of autonomy. They leverage decentralised technologies to create autonomy. The autonomy created in DAOs forms credible neutrality, a system that does not care who (or what) you are. Consequently, they are (or can be) censorship resistant meaning that all speech and action, not matter how ethically or morally challenging is possible. This creates its own new set of problems.

Autonomous work, autonomous budgeting, autonomous action all of these are features of DAOs. By affording the ability to self govern DAOs can scale to systems not possible in centralised form.

Autonomy is antithetical to centralised control and angers the gods, use with caution, attempt only if you are genuinely decentralised.

O

What is Organisation?

We consider organisation: “any collective, or group of agents acting to produce a goal”

We have been led to believe that only “organisations” taking on legal, or fiat form are classed as organisations. This is false.

Anyone can form an organisation anywhere at any time. They are characterised by coordination and action. Inaction is the death of organisation.

Organisations can take any form or scale and by leveraging decentralisation and autonomy can achieve any goals that choose. They can be truly OFF/GRID.

What is a DAO?

We encourage everyone to deliberate their own definition of a DAO, and to resist the authoritarian notion that they can be neatly defined for the purposes of appeasing a centralised authority.

We have many definitions, however this is our current working definition at FactoryDAO:

“DAOs are sociotechnical systems that use decentralised technologies to achieve autonomy and social coordination around digital assets.”

They are “sociotechnical systems” because they exist as a hybrid of human and technological form.

They are differentiated from classic decentralised organisations because they utlilise decentralised technologies to achieve autonomy and utilise some form of digital asset to either fund its activity, or to unify its participants via a shared digital object.

When is a DAO,
not a DAO?

To exist a DAO must exist inside the DAO trilemma, that is, they must have some degree of all three of decentralisation, autonomy and organisation.

The ‘D’ in your DAO disappears when the DAO operates as a single mind. This does not mean that a single person has assumed control, but one group or collection of agents acting in cohort can materially shape the direction of travel. For example, a 5-of-7 multi-sig where at least 5 of the members operate as a team following a clear chain of authority.

The ‘A’ in your DAO disappears if your DAO is successfully captured by an individual agent or group of agents and can no longer claim to be self-governing. In that sense, autonomy can only be really tested in practice and one can only prepare for such an attack. In theory, almost all DAOs could be captured regardless of their resilience; it is simply a question of the resources required to do it.

The ‘O’ in your DAO disappears when no action occurs. Simply put, when nothing gets done, your organisation is over. You can be considered more organised, the more you get done. The more action, the more output, the more organisation. Additionally, the more this action is aligned to the collective will of the members of the DAO, the more you can be considered a coordinated whole.