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A [[DAO]] is a [[group]] that moves in line with a software [[record]] using computer money.
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- For example, a [[software]] [[protocol]] (a record) may be used to decide how a group automatically gives money to its members.
- Using a software record to put an if-then statement that can be used to decide how a group sorts money led to thinking that it could be possible to put what a group wants into software that will shape it to keep doing what it wants.
- When the first [[DAO]]s came along, people pointed out that a DAO could be hard for a bigger outside [[group]] to put in order (or [[censor]]).
- The first popular [[DAO]] was called The DAO. It raised lots of money but people broke into it and robbed it, which broke it.
- DAOs were first popularly described in detail by [[Vitalik Buterin]], of [[Ethereum]]. Maybe because of this, they continue to be most associated with Ethereum.
- In 2021, [[DAO]]s are mostly used to get people together by having software describe how they get money and how to choose how people get money within the DAO.
- Most [[DAO]]s are attempts at making sure members of groups own the group, instead of one person or a little group within the group owning everything that the group does. In this sense, it is hoped that DAOs are a midwife for whole, strong, and healthy groups. That is, if DAOs do really well, people will simply have strong groups and they will mostly forget about all the software stuff.
- For a group, [[culture]] is bigger than [[structure]], since [[culture]] is the structure of how people are together.
- Sometimes, [[DAO]] tools are thought of as a chat and a bank account. In 2021 people typically use Discord and a Gnosis Safe Multisig, which is [[software]] that allows people to require more than one key at a time to open digital locks.
- Many DAOs are like the first popular [[DAO]], but they focus on a specific [[niche]]. A lot of them use Snapshot [[governance]] to decide how to choose how people get money within the DAO. With Snapshot, decisions are voted on publicly and weighted by the number of tokens used in a vote.
- A lot of people want to use [[DAO]]s to find ways that the people in a group can control the fruits of that group, instead of just one person or a few people in the group or people outside the group controlling the fruits of the group. In this way, DAOs are the heir to Cooperatives, which are a type of business organization.
- Most [[DAO]]s use one token for one [[vote]], however, this places more votes in the hands of people who have more money to buy tokens. So some DAOs give [[tokens]] to people who appear more connected to the mission of the DAO.
- [[Tokens]] often emphasize [[relationships]] of [[money]] instead of relationships of world or [[people]].
- [[Tokens]] are used to get [[money]], to give people a way to join in the discussion of how to choose how people get money, and to help decide what a [[DAO]] wants.
- Since [[tokens]] make who controls a [[group]] more explicit, using tokens may be a way to sneak what Cooperatives (the business type) want into corporations. Since tokens could be sold to anyone, this leaves [[DAO]]s more open to change than a normal company.
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When [[guilds]] in [[MMORPGs]] had to figure out how to distribute loot from killing bosses like dragons, they came up with a random method, a random method with participation, and then they used something called Dragon Kill Points- which was basically a money that you got for doing things that the guild felt was necessary for its flourishing. A social credit system.
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- Let’s not forget that we in the FCC simply gave things to whoever we felt needed them without using any of these systems.
- The Leftovers DKP was one such guild social credit system from World of Warcraft. Some players came up with databases for what loot cost in Dragon Kill Points, and included the transactions and bids in public for that database. All the DKP spent is then given to everyone who went on the specific raid that got the loot.
- [[Tokens]] that follow the Dragon Kill Points model essentially use a distributed social credit system- turning reputation into a legible collectible, as opposed to using one-vote-for-one-token-bought.
- Shadow economics is when a group uses an economic structure it will not identify itself as.
- A lot of people feel that [[DAO]]s will beat regular companies by being more cooperative than regular companies.
- [[Ronald Coase]] theorized that companies formed because exchanging things has hidden costs in communication and that companies fill this gap. [[DAO]]s may be able to reduce these costs- by doing things like removing the need for a [[bureaucracy]]. For example, Gnosis Safe allows people from all over the world to move and manage money in minutes, while doing the same thing with a regular bank could take days, weeks, or months.
- A weakness of many [[DAO]]s is that they get together to promote a way of accomplishing a mission rather than for a mission.
- [[Culture]] is bigger than tooling.
- Instead of [[swarms]] of individuals, it’s likely that effective [[DAO]]s will simply bring together small teams to work together, like the [[tumens]]. This means that the network will be one of a more dynamic, multi-layered ever-changing [[hierarchy]], rather than one without a hierarchy. A [[heterarchy]].
- DAO-to-[[DAO]] tools aim to help this heterarchy happen.
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- In Dune, they slow down their cuts with their blades to penetrate the kinetic shields. This is what Karuhat does in Muay Thai- he slows down the strike to pass the defense formed by expectation.