A Healthy Debate on the State of the DAO Ecosystem

There’s been a great conversation going on in the telegram channel that I thought would be good to capture here. I’ll paste it, in order, with attributes to who-said-what

Players: @Luuk, @Grace, @Eylon, @Eyal, @Felipe/@FelipeDuarte and Rubenrussel7 (not on this forum)

Luuk:
Hi GenDAO :raised_hands:

Hope everybody had a wonderful xmas :christmas_tree:

We just posted the second monthly DAOfest report on Twitter!

Thanks to your support we’ve been able to host 7 events, attracted over 270 attendees and grew the brand exponotionally! We’re super grateful :heart:

Check out the December and show some love here👇

Grace:
Can we also see costs, cost per attendee, and success measures such as new participants in Genesis or creators of new DAOs, and time those DAOs remain active/ membership? It is amazing to see such exciting events and I’m interested in the ROI for Genesis as a whole

Luuk:
Costs + Costs per Attendee should be do-able right away, I can create an overview after year’s end. Next week we’ll start working on a dashboard with all the numbers. # of Gen participants and creators of new DAOs and their activity is a bit harder to measure, we would need a good method and metrics to measure this.

Any suggestions how we could best quantify and present our data?

Grace:
Well, if they start a DAO on DAOstack, that’s the measure. If they are not using DAOstack in some way, it is hard to say we are accomplishing our goal. I’m a bit surprised to hear this was not a forethought. It feels like an irresponsible way to do marketing if we don’t even know what results we want. I know jer979 and his marketing DAO discussed this extensively. Did all that learning get lost?

Luuk:
Launching the DAO on Alchemy is maybe the 6th step in launching a DAO. With CuraDAO for example it took us 7 months to launch the DAO and now 12 months later we’re still in pilot phase.

We’ve already sparked multiple groups to create their own DAO for example JASONCHEWYL and vandigital, with the current tools available and the informational gap it takes some time to see the first DAOs to form

Good example is Youth for Climate Curacao, a group of teens on the island who organized a large clean up yesterday through a CuraDAO proposal. They are very interested in DAOs, but it will take a lot of effort and time until they would be able to operate as a DAO.

It might help to create somewhat of DAO launcher funnel and analyze the different stages

Grace:
To be honest, I don’t know how having a DAO helped them get the money than some other format. If it took 7 months to get this off the ground, and the result was 1 project which raised a few hundred dollars-- I would say that is very poor ROI and hasn’t proven in what way the DAO is a better fundraising mechanism than other formats. For example, if you worked the same hours at minimum wage in Holland, you would make that much money in a week, instead of toiling for 7 months…

I am not saying this to be contrary, but let’s look at the reality. We spent a lot of the DAO money on events, without a proven model for the funnel, without a proven model of our target customer, etc.

The research I did cost about the same as 4 events and proved that we don’t know the use cases yet, and that most of the DAOs have failed within a few months. It showed that the best use cases were for financial distribution of funds and yes/no voting cases (dOrg, Betoken, Nexus Mutual, Kyber). All the others were basically fails.

What caused us as an organization to ignore the research and go ahead and try to onboard people when we knew that most of the DAOs were not working? What caused us to try to use DAOstack for any use case outside of those 4 models that worked? If we were really acting in our own interest, we would have looked at the research we commissioned, created user Personas and then taken those Personas and done targeted events, specifically for those cases where we know that we as DAOstack can succeed.

Personally, following the research I have done, I have received several calls for consulting from people who are trying to figure out how to fit DAOstack or Aragon or GovBlocks onto their organizations – and most of them are not DAOs and have no intention of becoming DAOs. When I analyzed their needs, they were all clear cases where we have seen failures, or they didn’t need a DAO at all but it sounded good to them (or was pushed on them by one of the vendors).

I do believe there will be a time at which DAOstack or other DAOtech can solve all of these issues – but the technology right now is good for some very specific problems and use cases. That’s why you commissioned me… so I could find those problems and use cases. I did that, and then the research was thought of as “interesting” and “great”, but not as a tool to inform our marketing effort.

rubenrussel7:
Hi Grace, i’ll have to correct you and Luuk if you both don’t mind. CuraDAO didn’t take 7 months to get it off the ground it took a month or less. The clean up project is one of the dozens of proposals that have been proposed through the pilot period. There will be a report soon (couple of days) with the results on this DAO pilot and our learnings. And you could probably make that amount of money in a few days in the Netherlands.

I agree and share the same feeling around a community asking for research and then not using it to create effective designs, processes, methods or decisions.

Eylon:
Hey Grace I don’t fully agree on this.

  1. The experimentation is good and welcome, I believe we have to try different things and see if they get traction and involvement and by that decide whether to continue funding / working on them.

My personal belief is that DAOs are not a b2b product. Inherently, I don’t see why would an existing organization, with an emphasis on the executive level decide to actively reliquish power. There are a lot of organziations today who are interested, but from my ancedotal conversation with such C level people, 90% of them are interested in this for the sake of marketing with no real intention to step down.

This leads me to a half baked conclusion that most organizations that will use a DAO do not exist yet. They will be different and 100% community owned and managed, and the tools any DAO offers today are not even remotely close to be able to sustain such organzation, but I do believe we are on the right track, we need more experimentation.

  1. I do believe what is completely lacking is actionable metrics (a nice introductionary article about this (https://blog.leanstack.com/3-rules-to-actionable-metrics-in-a-lean-startup-7cf483b0a762))
    The simplest actionable metric right now is “Joining the GenesisDAO weekly call” which esseentially means onboarding to the community. Each project/DAO/Experiment will have different goals and parameters.

  2. I would argue that it would cost a lot more money and effort for any organization to run 7-8 meetups worldwide. On the flip side of that no organization would spend $10K+ on meetups without having a clear set of goals and KPIs from the spending of these funds.

Personally I’m still missing summaries, lessons, and what can be done to improve reaching a certain goal of user actions.

Grace:
I love a good debate! I agree on a lot of the issues you are raising. There are many, many cooperatives, permaculture groups, and urban commons emerging with the real need for DAO structures as they grow–but they are not so concerned with voting and allocation of funds, so the current tech needs to improve before they can use it. I think that in the search for “business model” we are missing the real needs of these communities. These meetups are generally targeted at tech companies. Tech companies are exactly in the situation you describe–not the right types of companies for DAO.

Right now, I see applications of DAO for a few things: blockchain governance and some DeFi applications. Secondly, when the technology improves; cooperatives, urban commons and permaculture groups.

These groups exist, but they generally aren’t businesses.

Eyal:
Grace how do you mean “they are not concerned with voting?” These organizations – which I agree need DAOs – have to make decisions all the time.

Grace:
In most communities (and most companies) (and most governments), most decisions do not include voting. Voting is used for something like 10% of the decisions in most organizations.

Most of the communities I talk to are looking at how to create things like community currencies, better support for local businesses, trade and swap between people in the community, better access to international markets for small crop growers… etc. First, they are looking to rebuild their economy in a variety of ways. That is done by a group of enthusiastic people who want to create community cohesion where it has been destroyed. A good example is a group I was talking to in Columbia. They are trying to restore community after the end of war, convert people from coca to cacao, and reach international markets with their cocoa. AFTER they get enough people on the platform and have an economic system that will have people trading, doing business together, and joining more communities, they will reach a scale where community organizing will start to become an issue. Then, they will be looking for governance systems. I have seen this pattern repeatedly with cooperatives, urban commons, and other groups. They are first focused on using an app for some other thing.

You could think of Extinction Rebellion or the Taiwanese freedom movements. They first are concerned with taking action and getting organized. After some time, they will have more formal processes… but not at the beginning. At the beginning everything is a “doocracy”. Another example is the Seeds (Joinseeds) community, which is building its own DAO technology. At the beginning, there are just a few people–maybe 100 people, so whoever comes to the meeting makes the decision. It is only after they reach a certain scale that formal decision-making structures are important.

That’s why the DAOs I interviewed were so tentative – they weren’t really DAOs yet. They were a group of 5-12 people who wanted to do something together. You don’t need online voting for that. You just get in a room and raise your hands (or more often, come to consensus on 95% of the stuff.)

Eyal:
Yeah, you don’t need a DAO for anything under 20-50 people. Maybe as a joint bank account or sorts, but not for decision making.

I think you start needing a DAO even before you grow into a larger group. It’s probably a requirement, because if you attempt to keep the doocracy (nice touch here) power quickly becomes centralized and new people get discouraged. At least from my personal experience in two such groups.

The larger NGOs, cooperatives etc. perform well without a DAO, but could do much better with one, and my theory is that they are a prime candidate to try and bring into the adoption circle.

Felipe or FelipeDuarte:
Happy to see our heads are very much in sync in 2 sides: The tokenomics of the future festDAO is aimed at the first need (creating a tokenized inner economy for group xyz) and the curation of DAOfest Denver is targeting directly at connecting DAOs with the platform coop movement.


@IvanThinking I hope this conversation can continue here…

1 Like

Well… I guess naming the monster straight up killed it. Well done!

1 Like

I agree with this.

Due to DAOStacks modular approach, I think we should recognize that GenesisDAO is the pacemaker for ecosystem growth.

The more mechanics (schemes) that are created for GenesisDAO, the more capabilities DAO’s within the ecosystem will have to utilize for their own use cases.

In addition to creating new mechanics, we need to see them perform, and begin building trust and familiarity for potential DAO Creators, so they are able to evaluate the needs of their particular DAO.

I think that this also brings up an issue of whether or not GenDAO should develop/implement mechanics that have great value for potential DAO Creators, but not necessarily GenDAO itself.

1 Like

Hello @Grace, hello @IvanThinking,

a really exciting conversation. This is a very very very important discussion and in my eyes crucial for the future of the DAO idea. I am extremely enthusiastic about this idea and have been working on it for over 2 years now. I came to DLT just for the DAO. In particular I am trying to recreate the DAO with today’s legal possibilities in reality for B2B and B2C - or whatever. Here I have concrete suggestions. At the moment only in German.

However, I see a few things that could hinder the further DAO space development.

  1. I am of the opinion that the DAO concept is based on a new type of organisation that is technology-neutral. This view is - so my awareness - not shared by many. However, opportunities are lost through this. Here I take the opportunity to refer to my last article. https://medium.com/@markus.buech/true-or-not-true-dao-resist-the-beginnings-and-consider-the-end-5ba20c9ccac

  2. In order for the DAO idea to change the world, it must be transferred to real life. Today’s DAO world is a bubble. 99.9% of the people in the rest of the world do not know the concept. If this is to remain so, there is nothing to be done. Otherwise, the borders of the community must be crossed.

  3. The DAO idea must be tested on real things. I have had a few thoughts on this as well. https://medium.com/@markus.buech/dao-ready-steady-go-d3b6fe8edba

  4. In Germany - where I come from - , for example, the German Purpose Economy Community has written a policy paper explaining the Purpose idea and also made a proposal for a new legal form. This has now been taken up by the German government. Unfortunately I have the paper only in German. But we need something like that. It is always better that we propose something than that the regulator thinks up something.

  5. As strange as it sounds, but in my opinion we need a central point of contact for the public, politics and the old economy, where information about DAOs, references and perhaps a kind of DAO register and perhaps also contact persons are filed. A kind of superordinate DAO, which, on the one hand, acts as a global umbrella organization, as a lobby and as an information portal.

BTW: Peter (@pet3rpan) from MetaCartel and I will draft something for a kind of that umbrella organization and want to start a campaign. So we are two in moment.

So what are your thoughts?

mb

Hi @MarkusBuech, you’re welcome to read my take on it on DAOTalk, it represents a step towards implementing DAOs for existing organizations.

1 Like

Thanks for your reply, @Eyal! What is your opinion on this topic? Frankly, I don’t know whether DAOTalk is the right place for such a discussion of principles. But I got the feeling from this thread that there are a few challenges of a general nature.