DAOs: The operating system of communities

Metis
9 min readSep 5, 2021

By Alphonso de la Rocha

Everyone is excited about NFTs and the market cap of cryptocurrencies these days, but you know something I think people will be increasingly excited about (again) in the next few years? Decentralized Autonomous Organizations (DAOs). It seems like no one talks about DAOs anymore, as if they were only a crypto trend that ended up passing us by. But the truth is that DAOs are alive and well, and many teams are already leveraging them to govern their blockchain projects, with many more to come. We should expect DAOs to become first-class citizens for blockchain’s future and, hopefully, for the broader future of work.

A gentle introduction to the problem and the concept

So what exactly is a Decentralized Autonomous Organization, or DAO? Governance at scale has always been a really hard problem for the blockchain industry and society as a whole. Especially when it comes to fostering fairness for all participants. Traditionally, we have relied on a set of centralized entities to manage the resources of a community, and make decisions on behalf of all the participants of a system. The reason for this has been the inability to scale a governing system to allow the involvement of every member willing to participate in decisions, fairly resolve conflicts, and distribute the influence and power of each member.

From governments to corporations, we have historically relied on centralized governance. Many of the richest countries in the world have a representative democracy, where citizens are allowed to vote every four to six years for whichever party or candidate they want to delegate decision-making to for that period of time. A representative democracy is not a pure democracy, because citizens don’t have the ability to get involved in every single decision the government makes. Nonetheless, representative democracy has always been regarded as the fairest way to make the system scale.

Something similar happens in corporations, where usually shareholders and the board have final say on the decisions that impact the company, while users and employees also have huge stakes in the corporation. Ideally, all of them should have a say according to their power and involvement in the organization. The problem is…

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