Main Value Proposition and Use Case

Q.) In the DAOstack community Telegram it was asked by Tigger: "hi team i know you are busy at the conference. i’m just wondering if somebody can explain the main value proposition and use cases of Daostack and why its important or unique? i have read the blogs and white paper but its still not easy to identify in one phrase what makes daostack important or what its biggest benefit is."

A.) Answered by @matan [DAOstack CEO / Architect]:

Thanks Tigger.

In one sentence: DAOstack provides the necessary technology and platform for the self-organization of large collectives around any shared goal or action

In some more details:

An organization is a toot to align interests of many “agents” in order to create a coherent, scalable joint action. The existing centralized and rigid structures achieve that to certain degree, but with the cost of rigidity (of the structure) which is in tension with adaptivity / agility (the ability to rapidly change w.r.t. to rapidly changing conditions) and scalability - the ability to grow the organization to an even larger action. In other words, the effectiveness of the organization, or its “value per person” constantly goes down as you grow the organization.

Free markets on the other side are highly adaptive and getting better and better with scale, but they cannot generate alignment of interests (rather the opposite) and coherent action (beyond means of economic growth).

DAOs are a new form of association, based on crypto-economic incentive at the individual level that generate large scale cooperation at the collective behavior (akin blockchain itself but around any general goal/action).** They combine the effectiveness, adaptivity and scalability of free markets with the alignment and coherence of startups.

For that DAOstack provides a general platform for governance on the blockchain; a full stack for easy integration and interoperability of collaborative DApps; and specific novel protocols (which we call Holographic Consensus) for the scalable, effective and resilient (safe) coordination of any large number of people around any action.

The result is a new type of organization that becomes more and more effective as it grows (as much as the internet is, but that can organize around more general goal/action).

The value proposition is the ability of large crowds to self-organize very effectively and reach level of co-creation/action never seen before. For example, the ability to align the interests of thousands of open-source developers to work together on fixing the scalability problem of the blockchain.

There’s large body of materials that have recently went out (including papers, blogposts and videos/talks) and many more that will come out soon.

I hope that gives you a starting point, and you’re welcome to ask more questions (as concrete as possible) and I’ll do my best to give you the complete answers.

Q.) Tigger followed up with the following:

"Thank you Matan for the answer. 3 followups:

1. Is this possibility achievable only with DAOStack or is just more likely: “They combine the effectiveness, adaptivity and scalability of free markets with the alignment and coherence of startups…and reach level of co-creation/action never seen before.” - or is DAOstack simply making it easier to create a DAO and not necessarily make that DAO more effective and sustainable?

2. if DAOStack is fundamental to effective, sustainable DAOs who are your main competitors in achieving that goal?

3. The open source example is a good one, but can you give me relevant usecase examples from A). Global scale and big business - private organizations converting to DAOs and B) Local community scale and public organizations. IMO real world and relevant usecase examples is whats missing from your message. The “What does it mean to me, or us” qustion [sic]."

A.) Answered by @matan [DAOstack CEO / Architect]:

  1. DAOstack makes it easy to build any organization on the blockchain. But it is also designed particularly to build these “Market Organizations” (or DAOs) that become more effective as they grow. This is achievable via:
  • a.) the ecosystemic vertical design — the stack.

  • b.) the ecosystemic horizontal design — the Arc framework, with its extreme modularity (it’s build of the tiniest logical building blocks), extreme adaptivity (it can be combined to build anything), and extreme upgradability (it can easily evolve)).

  • note that both a) and b) are designed for interoperable and rapidly evolving ecosystem of DApps and DAOs

  • c.) the special holographic consensus protocols that make large-scale cooperation possible.

  1. I don’t like very much to speak about competitors. DAOstack, by definition, is a platform for global cooperation. Any project that means to do the same (and thus would be called in the legacy world “competitor”) can (and perhaps should) integrate with the DAO stack and become a collaborator. We want to create the basis for an anti-rival economy. But if you insist, then somewhat similar projects (though with probably very different design philosophies) are: Aragon, Economic Spaces, Colony, and a few others.

  2. You can apply it to any field or example (all of which, including the open-source dev one, are real). It can be large-scale decentralized network for insurance, global media / journalist / writers / content organizations, collective investment funds, decentralized space or cybersecurity programs. It can also be applied inside existing large-scale incorporations such as Google, Amazon or Facebook.

Hey @Eyal do you think this seems like a good place to continue discussing use case and MVPs of DAO?

Hi @Kate, sure. Are we in a chat here, or is this a post? Anyway, off the top of my head here are a few use cases I know of:

  1. Fund management (the original DAO, Alchemy)
  2. Collective book, or any other product publishing (no implementations I know of)
  3. Collective intelligence, i.e. a doctors DAO, used for giving patients advice after a consultation of several doctors, potentially with different specializations. The DAO is used for sorting through each diagnosis, or consultation, and selecting the best one(s).

Regardless of use cases, I think we could map DAOs according to several parameters:

  1. Type of asset (fungible, non-fungible, what else?)

  2. Who holds execution power. This is a tricky one. Consider Alchemy, where theoretically rep holders hold the power to decide what to do with the money. But the money itself comes from DAOStack, which is to say from outside of the DAO. So who has the power here?

  3. How easy is it to betray the DAO. For example a political DAO with elected state officials, i.e. a member of parliament. Here I think it’s pretty easy to betray the DAO. The MP is bound to the DAO morally, and maybe with other mechanisms, and the threat of being pushed out. But at any point s/he can ditch the DAO and use his/her power as an MP to gain benefits.

  4. Optimal size. For an internal group in a company 50 rep holders may be plenty. For a political DAO 100k may not be enough.

  5. Probably many, many more.

Oh I see that this is a thread Pat started. @papa_raw maybe it could also have the research tag?

I’ve added the tag – this is a great discussion.

1 Like