We embarked on a research journey to understand how we could meaningfully define DAO communities and assess their health. This article is a short summary of our findings. For those interested in the depths of this rabbit hole, here's the full paper.
Much like traditional companies, historically, the medical field focused on treating illnesses. Little action would be taken to care for people until something went wrong and immediate actions were needed. As time has passed, we've learnt the hard way that being proactive and preventing is cheaper, more effective and enjoyable than curing.
In web3, where many tokenomics designs depend on network effects, healthy communities can enter a positive feedback cycle of talent attraction, valuable contributions, value creation and advocacy. While unhealthy communities can quickly enter a death spiral.
In this paper we propose conceptual foundations for defining a DAO community and propose how a DAO community’s health can be measured.
Specifically, we seek to answer the following questions:
We begin very broadly, explaining how we understand what a community is, and what its central features are. We conclude that it is a system of individuals at the micro-level. However, it has several subsystems and communities themselves belong to the larger ecosystem. This nested systems or network science perspective on communities guides our work, in addition to a social identity perspective. We also note that there is a dark side to communities (e.g., negative views on outsiders, group-think, etc.)
Creating and running a DAO Unit is a challenging task. Our research, in partnership with Sobol, identified 9 key challenges of operating DAO Units (DAO Teams, Guilds, and Pods). We researched the problems in adding Units to DAOs. We spoke with multiple DAO builders to ensure representativeness and validation of the problems that arose.
Throughout this work, we use “DAO Units” in a broad sense - any time a DAO forms a smaller group of contributors within the DAO, with a distinct purpose and independence to act. We did this because we heard many different terms and definitions from our participants and felt that “SubDAO” implied something specific but their definitions varied significantly. So think of DAO units as a large and diverse family, with a few distinct variations (common patterns).
This article presents the conclusions of a research project between RnDAO and Sobol. In this research, we attempt to define groups within DAOs- what we call DAO Units. We also explore the definitions used by members of a range of popular DAOs, determine their motivations and approaches in creating DAO Units, and identify a series of common challenges when setting up and operating different kinds of DAO Units.
RnDAO is an innovation center funded by DAOs to serve DAOs, with a mission to empower humane collaboration. We help projects deeply understand DAOs and user challenges, so they can build tools that make decentralization fluid and natural, thus facilitating mainstream DAO adoption.
Sobol is a collaboration platform for autonomous and decentralized teams. Sobol’s mission is to accelerate the transition to decentralized and humanistic work by making it easier to operate effectively as a DAO.
We formed this partnership to understand the context of DAO Units, prioritise problems that block success for DAO Units, and help the DAO tooling ecosystem become more strategic.
At RnDAO, we delved into the question of 'What is a DAO’ and frame 5 conceptual lenses that enable us to leverage the existing body of research on coordination and organisations:
🌐 DAOs as Organisational collectives
Let's bring it back to the people. If you've ever been in an executive position, been an influential DAO member, or founded a new organisation, you'll likely viscerally know the weight of responsibility. There can be so much work, so much uncertainty and yet such a pressing need to make big, complex decisions, often with long-lasting consequences. It's exhilarating, but it's also exhausting if not downright nerve-wracking. Conversely, being in a disempowered position can quickly become frustrating, if not depressing. And the difference is often touted to be: leadership.
We're told that there's a mindset and a set of skills that leaders have, that if we master those, we can make things right. Countless researchers have followed this path, compiling theories and models. Meanwhile, the pressure on 'leaders' has continued to grow to master and exhibit these traits - leaders are meant to be visionaries, strategists, motivators, servants, coaches… the list goes on.
With all the work happening on leadership, and all these expectations, why should we here, talk about leadership?
Coin Voting has got a lot of bad press recently. It has been criticised for aiding plutocracy and being vulnerable to attacks by large token holders (i.e. whale attacks). Less talked about, but probably more impactful is that Coin Voting also enables all token holders to participate in decisions, and more often than not, the token holders are not particularly known to the core team (a common result of attracting token holders through high APYs or other profit-oriented motives). In many DAOs, token holders are not a community but a group of strangers.
Naturally, any core team would feel uneasy with this situation, and many chose to delay decentralising governance. However, the desire to decentralise is still there (whether for regulatory risk, idealism, or scalability), and so different alternatives to Coin Voting have been popping up, mostly around NFT-based governance.
One of the best things about web3 is the freedom to experiment, and I think looking for alternatives is great. But when it comes to Coin Voting, I feel we're rushing to throw away the baby with the bathwater.
As humans, we tend to like simple systems. They’re easy to understand and make us feel in control. Unfortunately, most simple systems are counterproductive as they fail to account for reality's endless nuances and complexities.
We spend most of our lives in teams and organisations. And anyone who’s ever led one has spent dozens if not hundreds of hours wondering: How do I make it great? What will enable us to do great work together and adapt quickly when a challenge comes our way? How do I keep the community happy and engaged?
Historically, most advice on organisations has originated from observing 'good’ teams and contrasting them with ‘bad’ teams. Naturally, that approach leads to generalisations about how successful teams look, but not necessarily to an understanding of why they look that way, or what it takes to go from ‘bad’ to ‘good’.
Thankfully, Web3 gives us an excellent opportunity to think from first principles, so today we’re taking it beyond buzzwords like accountability or psychological safety. Instead, I’ll give you a framework you can use with any DAO to understand where to focus your attention.
At first glance, Purpose Statements are a great thing. They serve to articulate a company (or DAO’s) reason for being, beyond maximising profits for investors. But these seemingly innocuous positive statements are a double-edged sword, carrying the potential to enable megalomaniac tendencies, fanatic tunnel-vision and purpose-washing.
Now, I don’t mean to demonise the Purpose Statement. If we take a quick detour into how Purpose Statements came to be, we’ll see they are but one step in the history of defining an organisation’s Identity. And they've been a good step. But this certainly shouldn’t be the end of the story.
This article traces the trajectory of the Purpose Statement, and carries us forward to a new framing for Web3 organisations: the Guiding Question.
Web3 has brought a host of new possibilities for business model innovation, including commons-economies, meme-tokens, NFT-creators communities, and many more. This article explores how Web3 fundamentals could refresh a somewhat unusual model I discovered years ago and supercharge it.
Let’s start with a Web2 example of an expertise-focused business model, and then we’ll go into how Web3 can improve upon it.
I started my career in the world of high-end cuisine, and after a couple of years working 14-18 hour days in the kitchens of world-renown restaurants, I got a lucky break and managed to join what at the time was my dream job: being a development chef at the Fat Duck Group.
**This article represents my views exclusively, and should not be assumed to represent the views of any other team or organisation. A few friends and acquaintances have provided feedback, please attribute any genius to them and any lapses in thinking to me**
In web3, bounties and grants have proliferated as reward mechanisms for contributors. This was partially due to both bounties and grants being relatively simple from a technical perspective: they are a one-off transfer. However, there could also be a cultural reason at play, inherent to the Germanic or Anglo-Saxon cultures (like the US) from which many contributors come and also biased by a certain comfort that wealth and social capital provide. Here we seek to provide a broader model for DAO design, one which seeks to enable a broader group of humans to participate comfortably thanks to a key innovation: Minimum Viable Salaries.
Studies on cross-cultural work relationships have shown that one of the key differences lies in how we build trust. Generally speaking, cultures tend to be either relationship-oriented or task-oriented. For example, Latin, Middle Eastern, and East Asian cultures value personal relationships. They build trust at work through shared meals, evening drinking, and generally bonding. On the other hand, North American or Germanic cultures tend to be more task-oriented and build trust at work through learning about the other person’s skills and qualifications.
When we look at the recent history of these regions, we can see a tendency where in more stable environments (where we can trust the rule of law and enforcement by the stat)e, has generally led to more task-based cultures, while more unstable regions tend to have more relationship-oriented cultures (see the work of Erin Meyer, professor at Insead, for more on this topic).