A Prehistory of DAOs

Transcript

so hey everybody welcome to lisbon i'm q cutler i've worked at gnosis for the last four years and right now i'm co-lead of the gnosis guild team that builds the zodiac tools for daos and my talk today is on a pre-history of dao's cooperatives gaming guilds and the networks to come you can find me on twitter at kia crutler and our team at gnosis guild so when i present dows to audiences that aren't familiar with them i usually present it as a chimeric term something that comes from imagining how features of decentralized technology like global digital assets censorship resistance and automated actions will

change how organizations operate and the term dao first appeared in the ethereum community in 2014 however there were earlier terms that we know less of now but decentralized autonomous corporation and decentralized autonomous company or dac that pre-existed in the bitcoin space prior and of course the dow experiment proved short-lived but since then many doubts have come in its wake which is something of an emotional timeline for many of us and in addition to more platforms and protocols related to dows coming to the fore i think also more imaginable qualities are qualities projected onto what dao's would be came to us

so auto-poetic they're self-making they're aligned they're co-owned and they're also mnemonic or they aspire to be mnemonic in the sense that they're institutions in which their institutional memory is automatically recorded through their operations and becomes public knowledge however i'd say that while the term dao is new the ideas behind it are not particularly in the discourse around networks a favorite term of think tanks in the 20th century and particularly seen in the 1995 brand report tribes institutions markets networks by david renfelt and this report says that there are

broadly four types of organizational forms through which humanity has progressed however key to the framework is not that one organizational form replaces the one that's prior to it but rather that they curtail and supplement them as they grow and a particular interest to dials is how the report represents networks so key distinguishing feature from organizational forms preceding it networks are described as multi-organizational and they facilitate the growth of distributed web-like global enterprises and increasingly so-called virtual corporations sounds familiar and neither public nor private the primary domain of networks in the report is a third autonomous social sector

which the report identifies as civil society and i'd like to bring up this report in the context of daos because i think knowingly or not we've inherited a lot of the discourse around networks from the 90s and how we talk about them and given it was published by the rand corporation which is a non-profit think tank that went on to advise the us military and government it's important that we realize the lineage of daos relates to a certain type of western liberalism as well as a kind of soft power that would be exported in the decades following it and it's easier to change lineages that you are aware of which is why i referenced the report in that light with the emphasis on civil society's three-letter acronyms for

organizations ngos npos and pbos a future one is naturally missing dows so taos today i would offer a working definition for dao as a voluntary association with the operating principles of digital cooperativism and what i mean by operating principles is not that taos have an organizational and legal structure that's one-to-one synonymous with cooperatives more than they embrace cooperativism as a kind of protocol a kind of set of economic relations between members that emphasize co-ownership and voluntary associations they are cross-jurisdictional way for strangers friends or unlikely allies to

pseudonymously come together towards shared goals often supported by a token model incentives and governance held in common and it's important to remember that daos are not just technical protocols for governance or reducible to the software that they use but rather that they're communities that coordinate through collective vibes and the dell landscape has really bloomed beyond the initial protocol dows to service dow social daos media dials and even collector dows and many make the joke that while dows are not reducible to their software today they're basically a group chat and a bank account which looks like a discord forum and often a notice of safe multi-sig and here is a screenshot of the popular

uniswap grants program multisig which has four out of six owners who are elected to the multisig to transfer grant proposals and additionally here's a screenshot of pleaser dow's multisig which is a popular collector dow that collects nfts of artists they admire they've also issued an internal governance token as well as an external fractionalization token so that members of the dow can vote on which net artworks they'll require and what i think from an institutional perspective that's the most interesting about things like pleaser dao is that they often invite the artists they collect to become members of the dao in turn which greatly challenges the traditional divides between artists gallerists and collectors and i would like to see more

institutional experimentation along these lines be brought by daos in basically every industry and along these lines because most daos represent governance rights through a token in some sense you could say tokens trojan horse principles of cooperatives directly into highly financialized spaces and while i think tokenization is far from the answer to the social media woes of web 2 i do believe for dows with the mission of economic value creation be it curation collection or software development a token becomes a useful mechanism on three fronts bootstrapping funding granularly and widely distributing governance rights and aligning an ecosystem of dows not only one

organization and the space is new which means that many norms around tokens have not yet been established i would offer one that as a guiding star web 3 applications could aim to introduce value in relations which have been historically denied it such as labor and environment rather than creating new financialized relations between its members and in this light daos could also learn a lot from cooperatives which can be defined as member-owned enterprises that are managed by their members as well and we can look to the 1844 rosteal principles for cooperatives they give a highlight and are actually still used by many cooperatives today and embraced by the international cooperative alliance and if you look at them voluntary and

open membership democratic member control autonomy and independence and perhaps most interestingly cooperation among cooperatives we see a list that easily could have been drafted by many dows today though not all and we could see something like cooperation among taos as one of their chief concerns and props where cooperativism most strongly intersects with the dao space is through the work of nathan schneider and others particularly his 2019 essay startups need a new option exit to community where he highlights a third way for startups to evolve their ownership rather than doing an ipo or corporate acquisition they could share the value of what they produce with those who value it most so that's the users and members of the platforms they've created

and also in a great paper by marcia manan called fostering worker cooperatives with blockchain technology he highlights three dilemmas that cooperatives currently face so fundraising international governance and alignment bootstrapping initial funding international governments in the sense of scaling across jurisdictions as well as bureaucratic and cultural coherence as cooperatives grow and as seen before these are dow patterns that could be while not a panacea for cooperatives greatly helpful in their scaling and becoming a global movement again because they help with bootstrapping funding granularly and widely distributing governance rights and aligning not only one organization but potentially a network of cooperatives

similar to the mondragon cooperation we see today andels can learn a lot from cooperatives and their long-termism both around economic assets as well as the well-being of their members and the environment that surrounds them deaths can also learn a lot from gaming guilds so in massively multiplayer online games players are mostly free to set their own goals loosely guided by the game world narrative and broad referred to broadly as guilds clans or alliances these groups average in size between 40 to 150 participants but sometimes up to a thousand and their goals could include defeating difficult enemies or constructing useful tools basically any goal that's out of the

scope of a single player acting alone uh and these could include things like mega projects like building a titan class warship and eve online and what gaming guilds have really noticed is that it's important for the same players to work together again because they've established cooperative patterns as well as the fact that most players have complementary skill sets so different in-game characters that mean that they complementary work together well and key to gaming guilds and the same players working together again is the distribution of loot and its perceived fairness so loot are in-game items that are often dropped at the end of a successful battle or mission and um loot is a quite loaded term in the

crypto space today that i think we've learned can spawn its own type of worlds and to deal with the perceived fairness of loot distribution in games many systems have developed one is dragon kill points originally developed in 1999 as part of the everquest mmo dkp act as a private money system separate from any existing currency in a game world and they're distributed to guild members based on their participation in raids and guild members can then use these points or this private money to spend for the loot items they most would like and it's out of the scope of the talk today but uh there's a great work called dragon kill points a summary white paper that talks about a specific instance of dragging kill points on a world of

warcraft server that's in practice today and highly relevant to crypto and so these guild patterns of say dkp dragon kill points autonomous dispute resolution so being able to solve in-game disputes in-game or at least online as well as the market allocation of publicly owned goods that you see in many dkp systems could be massively helpful for what i see as dow dilemmas today so i think there's a huge crisis about how to track meaningfully contribution participation and reputation and dowse especially as they go across discord forums and in this light it's also difficult to then distribute resources on these faulty records of reputation and also dials could learn from the type

of small team trust and coherence that gaming guilds build another insight from gaming guilds is that as researcher joshua citarello points out many dkp systems resemble a form of market socialism in which goods are publicly owned but allocated by markets and i would think that shadow economics could be an apt term for when a group operates through an economic form it might never label itself as were there dows as digital cooperatives or gaming guilds is market socialism and i think here and lies the crux and the opportunity that we have as a community because i think in dao's ambiguity and it's a historicity so in some sense it's kind of ignorance of its lineage there

is opportunity for collaboration across existing ideological divides and polarization we have the freedom to experiment with different economic forms without worrying about their labels and so for the dells to come what would they look like based on this it's my opinion that dows will not be the uniformly non-hierarchical network some imagine instead they will coordinate across different levels of coherence and trust despite some pockets of flat hierarchy and from this you could sketch about three layers of a dow you could say there's a token that there are teams guilds and squads that are then represented by that token ownership and that there are missions milestones and raids financed by token ownership

and often chained together to do more large-scale public works and from these layers itself a hierarchical network emerges hierarchical here meaning an organization that possesses the ability to be ranked in multiple ways so looking at an ecosystem of daos from one perspective dow b we could see the dow b token and the teams distributed in one way but from the perspective of another dow we could see similar teams and similar goals but still a differently ranked organization and in this light one of the promises of dao's that i think is still far from achieved but on the table is that because programmable assets or tokens can be distributed in a more

granular way than traditional corporate interest memberships or shares the possibility for an entirely new type of token holder company formation comes to the fore which can incorporate greater practical knowledge and governance without increasing transaction costs or in other words without decreasing organizational efficiency as doubts grow and key to the promise here is the idea of tacit knowledge being embedded in governance tested knowledge meaning informal practical knowledge that can be surfaced to make better decisions on the whole and i think one of the best examples of blockchain governance that's trying to incorporate tacit knowledge is the regen network a public blockchain for ecosystem services that has set aside 30 of their tokens

for climate scientists land stewards and indigenous peoples to both manage the value generated by the network as well as decide on protocol governance decisions and so far we've seen tokens primarily build worlds around speculation and exit however as fundamentally new types of tokens emerge they will build worlds around entrance too and for better or worse attached to how physical resources are governed and looking beyond token voting governance which has become a recent topic in the space i would say that while tokens can distribute governance rights we should also move beyond token voting as the first solution to decision making so from vitalik's recent piece instead we can look to approve a personhood

participation in retroactive public goods funding to deal with plutocratic issues however i think what's missing in the critiques of token voting is the insight that tokens are in some sense a new form of digital objects that will take time to establish norms around or in other words we don't yet know what tokens can do and they don't look like traditional governance rights shares or currencies and this is why as a team we're building zodiac the expansion pack for dows it's a composable design philosophy for dows and a collection of tools built according to an open standard because dows are not monoliths they are constellations and zodiac launched with a collection of

tools including exit delay and bridge as well as reality which some of you might know as safesnap and they can all be equipped through the zodiac app on the gnosis safe and you can plug and play different features so things like the exit module bring molok dao's rage quit function to the safe the reality module can take off chain boats on chain and execute them by the safe in a decentralized community way there's also custom modules bridge modules across any ibm chain and more and in one sense zodiac mods are designed to take decision making beyond token voting looking to hybrid models using time delays and anti-collusion signaling methods

and at their core they decouple avatars or accounts from decision making meaning the practices surrounding governance membership and treasury management can be customized independently of the affordances of a tool a dow uses and in short this means that dials can now be living breathing evolving organizations with a programmable account like the gnosis safe at their core and tools built on the tools built on the zodiac open standard support unlike other dial platforms today organizations that can evolve over time and incorporate multiple teams and different types of tacit knowledge and their changing governance structure so in summary

we have gaming guilds we have cooperatives using software and we have group chats and many of us in the dow space are like oh my god is this an entirely new organizational forum in the history of humanity and while i think it's definitely not today it has the opportunity to be so i think with the networks to come their digital primacy meaning the fact that they primarily deal in digital assets as well as usually start as internet native organizations allow some not to take seriously the fact that cooperative principles gaming guilds and other odd imaginaries like dao's present an emergent organizational form with legitimate political relevance and i think why it is important to grant

dow's legitimacy as political forms today is because those on the other side of the digital divide will be at a further disadvantage when stakeholdership has not been actively cultivated among them and this becomes potentially protocol governance becomes one of the main forms of political participation in the next century which is a partial chance so to end on a more speculative note um i'll read part of a paragraph from my essay of the same name as this talk that that presents a kind of speculative way in which jazz can participate in the political sphere more explicitly so to call attention to the terms failings at seriousness many return to its misnomer the a endow does not live up to its autonomous

reference and while others like researcher adenae invoke the political rather than the technical spirit of autonomy endows even though the term now means poetically correct in my opinion we could propose an occasional replacement decentralized avatar organizations which would take their political stakes both lightly and heavily and as politician and digital minister of taiwan audrey tang notes the days of avatar politicians are already here they are virtual beings that represent rally and advocate on behalf of political platforms a decentralized avatar organization would recognize the coming virtual zeitgeist this could look like a collectively managed cyborg like little michaela or an entire environment

shaped by its members like trust moving castles and decentralized avatar organizations will have collectively developed interoperable game worlds engines or virtual being mascots at their core which co-creates the culture around which their members organize and as is the case with mmos or massively multiplayer online games dells are less technical protocols for governance and more high-stakes game worlds that interweave because we might see something like dow vs pack political action committee as soon as 2024 or as soon as tomorrow and for this reason rather than just code we should aim for rough consensus and running worlds um so thank you so much if you're

interested in continuing the conversation i recommend that you would join our team the nurses guild discord follow us on twitter or check out our blog for a longer more nuanced take on this presentation and i would love to talk with you all soon thank you