Unmanned DAO
Decentralized Autonomous Organizations (DAOs) have grown significantly with the rise of blockchain and decentralized finance (DeFi). DAOs offer distributed decision-making without a central governing body, making them attractive for various projects.
Many DAOs are operational today, with some achieving success and others struggling to maintain decentralization. Often, the core team turns a DAO into a business, prioritizing rapid growth over community, or selling it off!
Ultimately, the transition from a centralized top-down organization to a fully decentralized one is a challenging process, and failure to achieve this raises important questions about the future sustainability and integrity of DAOs in the evolving digital landscape.
This highlights that the social layer of a DAO is a crucial component of its success and effective governance. However, this layer also introduces risks. For example, individuals could gain disproportionate control by acquiring large amounts of tokens, allowing them to steer the DAO to serve their own interests, which undermines the community’s goals. Additionally, relying heavily on social dynamics can compromise stability, as people seek predictability, which is disrupted when protocols change through voting.
The importance of the social layer in DAOs is being studied, with projects like ALANA conducting surveys on its impact.
Let’s dig a little deeper and explore how we can address the problems mentioned above. First, let’s focus on the letter ‘A’ in ‘DAO’!
The “A” in DAO stands for “Autonomous,” meaning the ability to operate independently. What if a protocol could function autonomously, without human involvement, and remain relevant in real-time?
In heavy engineering industries, unmanned operations enhance safety by eliminating human error. Why not apply this approach to DAOs, creating organizations that function autonomously without human intervention? This could mitigate risks like core team misconduct or “whale” attacks, where large token holders manipulate governance. By removing the human factor, DAOs can achieve greater security and resilience, staying true to their decentralized nature.
This aligns with Shriti Appiah’s concept of the “Hyper-Organic System”, where systems function according to their original goals but adapt to changing conditions. Language serves as a prime example of such a system, evolving naturally while maintaining its core structure and purpose.
Many decisions can be made without community voting and governance processes. For instance, determining compensation levels for DAO members can be streamlined. With the assistance of AI agents, a DAO could establish a benchmark for compensation based on current market conditions and adapt as needed. This eliminates the necessity for voting when adjusting compensation levels.
Eventually, DAOs will interact with each other. For instance, one DAO may wish to procure services from another. This could be done without proposals or voting — much like how businesses use tenders. A DAO might specify requirements, and other DAOs could submit their bids. The winner is determined by price and other objective criteria, without needing a community vote. Such processes could be encoded into smart contracts, ensuring transparency and resilience.
To be efficient at any stage, the AI agents working for the DAO can suggest and modify requirements for tender purchasing to optimize processes while still aligning with the initial goals and mission of the DAO.
You might feel that this approach is not truly decentralized, as it may seem to overlook the voice of the community and resemble traditional business operations. However, I am not advocating for the complete removal of human involvement from the system and giving it away to the code and AI. The community will still play a vital role in establishing the mission, goals, and values of the DAO. Members will continue to make proposals and vote on them, but many routine processes can be delegated to AI agents, streamlining governance.
One of the key features that distinguishes a DAO from traditional businesses is its foundation on blockchain technology. This provides numerous advantages, such as
— permissionless access — allowing anyone to join and contribute regardless of nationality or background, rather than relying on personal connections.
—transparency of blockchain ensures that every action is recorded in an immutable database, fostering trust among members.
— non-stoppable execution of contract; for instance, if work is completed and verified, payment will be automatically released, ensuring that contracts are fulfilled as agreed.
Lastly, blockchain technology maintains a verifiable record of contributions for every DAO member, which can be accessed and confirmed by anyone at any time in the future.
The social layer in DAOs can be crucial, but it also introduces vulnerabilities that can compromise decentralization and stability. For some organizations, a shift towards autonomy may be a better approach. By having protocols self-adjust based on the DAO’s mission and values, and by using smart contracts to eliminate human intervention in areas like governance and inter-DAO interactions, DAOs can become more resilient and autonomous. This could lead to a future where decentralized operations thrive independently, without relying on individual influence.