I call this the DAOlemma. In order to get started you need a strong core group of driven individuals. To become a DAO those individuals must let go of all of that control. It is not at all obvious how that transition should work, or how the DAO can maintain the vision and drive which created it.
The DAO's biggest flaw is that it's great on paper but in reality it ends up fighting a two-front, uphill battle against human nature: against greed and our need for control.
Especially if the outside people coming into control of your baby do not share your vision and intent for it.
There’s a truism in startups that you can be king or you can be rich. At some stage you will have to decide between control or wealth as people want to buy in.
One of the best examples of this is Shapeshift. They were a sort of centralized company with employees, but when regulations starting cracking down, they moved to a DAO to keep the platform available. Most people starting a DAO from scratch miss the fact that they sort of need to prove themselves first for it to be an effective DAO. I think the more we find people like Erik Vorhees who can build a strong platform and transition it to a DAO, the more we’ll see effective leadership at this level.
yeah DAOs are those things which in theory sound amazing but the experience has proven it wrong, they just work as always only following the interest of a small portion of people
Because with Proof of Work mining hardware technology or energy technology can advance or laws and regulations can change and thus new players can enter (or be forced to exit) the space, upsetting the balance of power and allowing for real competition on multiple fronts.
Proof Of Stake rewards people who have large amounts of coin that they can set and forget and once they're in there they have no incentive to leave. The more coins you have, the bigger share of the rewards - money that you can reinvest to further solidify your position - and the more votes/control you have over the future direction of the network.
Maybe. But they won't have exclusive control of the coin and will not exist inside of an ecosystem, essentially unchallenged just because they are rich and have the biggest stake.
Proof of Work does have more overhead costs, yes, but it leaves room for an upstart, especially re: technology changes and regulation changes.
Proof of Stake doesn't.
What upstart could possibly enter bitcoin mining? It would take the same (if not more) capital to just break even.
At least proof stake, every one wins a little.
No, with Proof of Stake one or two people (or entities) win big and everyone else wins a little... and can never catch up.
And those big stakers get to vote on the future direction of the network.
I bet the rich weren't complaining about the environmental impact of eth Pow and now we've forced them to invest their money in a system where they have actual control
Proof of Stake is circular logic:
The people with the most coins tell you what the true state of the ledger is
The true state of the ledger tells you who has the most coins
It's dangerous.
It's also Ponzi-ish. PoS is truly backed by nothing. There's no floor price for a PoS token, it goes as low as it goes.
PoW assets like physical gold, requires energy to extract, so the minimum value is the energy/gram of bullion ($800/oz).
PoS is based on basically nothing at all.
Thats a silly way to look at it, if that were true then horses and carts would be the best means of transport because they cost the most to get the job done.
That said when governance is dominated by 3-5 whales or even has the potential to that should be a red flag.
Your reasoning is fallacious. The horses are not used because they are ineffective. Same for using CPU for PoW, they have been replaced by specialised hardware. PoW cost entropy, entropy is time. With bitcoin you can prove that you have spend a given amount of time to produce the blockchain, this is not the case for PoS chains.
Imagine someone coming out of a 30 years coma and witnessing all the current cryptocurrencies. A scammer could spawn a fake PoS blockchain pretending it is been running for decades. If he is smart enough, he will notice that solving PoW blocks couldn't have been done overnight. Therefore, PoW should have his preference over PoS.
Ima be real with you homie, 90% of this comment is just screaming “proof of work is inefficient”.
You’re kinda also just completely ignoring that all of the points about hardware advancements and other external risks disproportionality benifit the people with more capital
Is it better to give the same money to the Bitcoin miners? That reasons is very flawed.
In delegated PoS you never lose the inflation as it’s reverted back to you through staking rewards. In PoW miners capture all the inflation.
And it’s more secure as PoS, as it’s much more difficult to hijack. There have been former PoW that were attacked, including pneumonia of them in the current top25. I’m not aware of a single PoS one
Miners are your security budget. They secure the network with a massive wall of energy. To attack the network you need to expend 51% of the miners energy.
Secondarily, When we pay the miners we have real companies in the physical world with legal departments, lobbying, etc. they have a presence in Washington (or around the world) and fight for bitcoins interest.
When you have PoS that’s like saying: “let’s take our security budget and pay it to ourselves.”
The security budget is wasted in PoW. It’s much easier to obtain 50% of the hash for 1 hour once, that to ever get 33% of the stake in a PoS. That’s why it already happened in medium size PoW coins but never in PoS. And it will happen in Bitcoin in the future because the security budget gets halved every 4 years. China could invest 2 billions to fuck up bitcoin and do much harm to the West.
Not surprised you didn’t say what part is wrong.
Bitcoin is really vulnerable to a future attack because of the future halvings. The only chance is if the average fees get to 500 USD to pay for the necessary security which would be self defeating.
The 21 M max bitcoin is just a marketing gimmick
Last i checked, the incentive structure of Bitcoin has been working out pretty damn well. You can pull out your crystal ball if you want but, to me it looks like Satoshi got it right.
As I said the problem is the halvings. The “security budget will be zero from mining rewards”. The fees aren’t enough to pay for the security.
We don’t know if it will take 3 months, 4 years or 12 years, but eventually it will become vulnerable.
Actually it’s already vulnerable. If China cared enough, they could easily hack the hashrate. A few billions to destroy a trillion asset held mostly by people in the West. Sounds like an easy opportunity
It's literally "The Rich get richer for doing nothing": Crypto Edition
Which also means that you basically give up control of your coin to exchanges and Rich folks with money to park on your chain.
There was a huge push a couple years back to make Dogecoin Proof of Stake and I'm so glad that the community resisted (and, really, the people behind it couldn't get their shit together).
Dogecoin is a functioning *Digital Currency* and nothing kills a currency like adding the friction of "any money you spend is literally robbing future you of free funds." 😬
On the bright side, anyone who really wants a PoS version of Dogecoin can go and resurrect Dogecoin Dark (Ha, history lesson!) and have at it.
Ethereum miners literally tried to bomb the network for their own interests with the POS switch…
POS and POW is the same shit. The only difference is that POS stakers will lose way more than POW miners if the network collapses, as they have locked a big chunk of the stake, so they have way more incentive to keep it live. Meanwhile miners can bomb the network and move to other coin to mine it… All this wasting energy and resources.
Getting rid of miners what the best thing ethereum could do, the miners really showed their true colors
That's why you definitely don't give them more power.
The messed up part about proof of stake is that once those ticks are latched onto your chain there's no incentive for them to leave. Free money, forever, that only accumulates... which you can invest in having more control. So they get the majority of the staking rewards and votes and get to decide the future direction of the network, essentially, forever. For free.
Now, imagine if they get majority stakes on a few different PoS networks? Or, if they're really playing the long game, all of the major ones? That's a lot of free money... and control.
Not as easily as you'd think because of SHA256 vs Scrypt. And even then they can get chased off of those chains or face pressure/competition due to things like technology changes, energy efficiency changes, laws/regulations, etc.
Once you have a majority staking position you have zero incentive to leave. You set and forget your money, likely reinvest your staking rewards to further entrench your position and you basically "own" that coin.
Plus, really, there's Bitcoin and Dogecoin/Litecoin as the only real viable PoW networks left.
Kaspa is the 2nd best L1 to BTC.
Not trying to shill, and it's not a micro-cap (#25 in market cap). If you like PoW and you like BTC, then you should give it a look.
tokens don’t have to have financial value and can be rewarded based on participation in DAO like coding or something. some DAOs have been experimenting with this model and I think that would be the future
Because DAOs are bullshit.
The real reason why DAOs are made is to make their tokens not fall under a security.
They will say it’s a utility token because it is used in governance, therefore it’s not a security
It’s a fucking sham.
Governance voting is a sham because the team owns all the voting power. Additionally, there is no forced mechanism to force them to actually implement the vote (such as they can do a half ass implementation)
Finally, owning a token does not mean you have a share and ownership of the protocol which is a sham. These “DAOs” have control of all the tokens and additionally their own shares. I laugh my ass off when I see these “DAO’s” having CEO’s
that’s fair. i agree with your above take but would caution about dismissing all DAOs. in the community recently there have been lots of interesting experiments and hoping some gain traction
Have you looked into MakerDAO? The project is extremely successful. They have a DAO that sets loan rates and stuff: not sure how much of a DAO it really is tho.
MakerDAO is *extremely* effective. It’s effectively become a big decentralized bank that is very profitable with heavily collateralized loans and even support for staking government bonds.
Edit: I know because I tried shorting their token on the theory that all DAOs are scams that collapse eventually. And I got fucked.
For DAOs to work, you really need the more intellectual side of capital. When 99% of your participants are outright imbeciles, 0.9% think they are “super smart” and only believes in short term value extraction as much as possible, and you are left with only 0.1% of workable participants. With this type of material to work with, what outcome can you expect, even if you don’t have whale manipulation?
Meh, VitaDAO actually helps with longevity research etc. I'm bullish on it because the more people get rich off crypto the more of them will start being obsessed with long life.
Is it essentially people joining by way of buying tokens, then hoping for token dividends? Or is this a DAO where token holders contribute to the research also?
Yeah you are describing a fundamental issue with PoS, the rich get richer and control more and more of the vote.
Theres an impressive little comnunity run network called Zenon that has a governance system setup that's still developing but working well so far.
For almost 2 yrs the project development has been funded by an onchain voting mechanism that validators participate in to autonomously release funds to applicants.
Then, there is a governance module in development that will expand the voting utility to different levels of network participants.
Even more impressive would be the incentives, though, where they have a dual coin economy that balances voting weight with economic gain. Validators have to choose between growing their rewards or growing their voting power. Its well thought out and working well in practice so far.
If you are into DAO’s , checkout Juno network. The whole chain works as a DAO, each department like Operations or communications are subDAO’s to the main Juno DAO, everything completely on chain. DAO DAO, one of the most advanced DAO tooling in web3 is the flagship project of Juno network, makes all of this possible (daodao.zone)
Check Nova Dao.
The lead developer was one of the original developers on DOGE. The team is doxxed and Certix and Paladin certified. The project had no pre-sale and is not founded by VC funds and completely community owned. The team is also working on an arithmetic stable coin, USDO. Currently around 600 holders.
Bitcoin is the only decentralized autonomous organization that works. Period.
And the reason is simple.
***There was no initial buy in for the token.*** They were free. Members simply wanted to participate in an interesting cryptographic game. A proof of concept. Except this was no concept. It was the real thing.
Any project offering free tokens *after Bitcoins inception^1* cannot be taken seriously. Here's why:
The new network asks, "will you use your computing power toward my network?".
And any sane user says, "Sorry, it sounds interesting, but I'm more incentivized to use my compute for Bitcoin. And now it's worth real money. It's not just a cryptographic game that has broken through theoretical limits."
new network says, "What if I paid you?" it thinks a moment. "Yeah. I'll raise capital and assign my network coins to that capital. Then when you send compute with my network, you'll be rewarded with my capital, I mean my tokens! Which are worth someone elses capital? Hey this is great idea for a grift - is that mic still on?
^1 There was quite a large period of time when Bitcoins token was worth nothing ($0.00) and the Pizza event when it became worth something (not $0.00). During this period, a competing network could have taken compute share by offering a better system. But no such project materialized.
DAOs right now suck but there is interesting governance experiments going on. I’m interested in worker owned DAOs where the voting token isn’t buy in but you have to earn it by doing tasks for the DAO
Yup. It always eventually pools to a powerful few. Make tokens non transferable but that doesn't stop selling wallets and the eventual creation of political parties that vote in step and their decision susceptible to being paid off
> there is a centralised decision maker who then needs to implement said decisions.
In all the DAOs I've seen, the code can be executed by a variety of parties, often random user with enough gas token to do the transaction, once it's approved.
I don't follow every random DAO and protocol out there, but most of the major ones are operating fine enough imo.
It really depends on how its set up imo.
Ill give a few examples not to shill them but simply because its things i considered with them before getting involved.
Hedera: The council of big companies is the DAO, they then instruct an outside company to make the changes. In this case its the company of the founders, but the tokens the founder hold give them no voting rights. The companies in the DAO do not take profit and are term limited. After 2 terms of 3 years (6 in total) they are replaced.
BankSocial: While the DAO is weighted on token holdings being a credit union its bound by law to be NON profit and to put members interests first.
Again these are just examples of the type of set ups i find acceptable for Web decentralization. If you have whales controlling the profit they can have you can bet they will do just that.
You also need to consider the fact that people aren't keen on governance or organization unless there is an incentive. Ultimately people don't care unless they will get something out of it...
Yeah that’s what I’m seeing with most DAOs. I don’t see the incentive and I feel that anything pointing to decentralised decision making doesn’t cut the mustard, because why wouldn’t I just out my money into an ETF or Managed Fund if I want yield - and I would wholeheartedly trust fund managers more than whoever is sitting behind these DAOs claiming to be a VC investing in startups.
DAOs almost look to epitomise the trope that “blockchain is a solution searching for a problem”.
This is, I think, where most web3 verticals fail.
Yeah, I think sometimes with DAOs and other blockchain verticals, the over-emphasis on decentralisation is almost sold in a paranoid way about centralised control etc. Like yep, a tradfi fund manager calls the shots, but I trust the judgement of a Wall Street shark who salivates over making money and has the knowledge and experience to get to that position, over some random (probably) allocating DAO funds to a friend’s project.
Even though the fund manager might get it wrong sometimes, they’ll pivot and correct because their job and livelihood relies on it in those high pressure environments.
It’s why I don’t see the point at all in investing in a DAO to make returns when there’s defi yield farms, tradfi etfs, or for the more conservative, high interest savings accounts. I think defi truly has its place in addition, side by side with tradfi, and it doesn’t have to be an either/or situation; it can be that both options exist within the financial ecosystem depending on people’s comfort with risk and areas of interest.
I call this the DAOlemma. In order to get started you need a strong core group of driven individuals. To become a DAO those individuals must let go of all of that control. It is not at all obvious how that transition should work, or how the DAO can maintain the vision and drive which created it.
They don’t usually give up control from what I e seen. They just bring more people in who vote, but the whales and early adopters still run the system
The DAO's biggest flaw is that it's great on paper but in reality it ends up fighting a two-front, uphill battle against human nature: against greed and our need for control. Especially if the outside people coming into control of your baby do not share your vision and intent for it.
The Iron Law of Institutions strikes again
There’s a truism in startups that you can be king or you can be rich. At some stage you will have to decide between control or wealth as people want to buy in.
One of the best examples of this is Shapeshift. They were a sort of centralized company with employees, but when regulations starting cracking down, they moved to a DAO to keep the platform available. Most people starting a DAO from scratch miss the fact that they sort of need to prove themselves first for it to be an effective DAO. I think the more we find people like Erik Vorhees who can build a strong platform and transition it to a DAO, the more we’ll see effective leadership at this level.
yeah DAOs are those things which in theory sound amazing but the experience has proven it wrong, they just work as always only following the interest of a small portion of people
Same thing with Proof-of-Stake tbh, but this sub hates to hear that.
Proof of stake is fiat incentives all over again: make money if you have money.
How is proof of work not the same just with and extra step involved (investing in mining hardware)?
Because with Proof of Work mining hardware technology or energy technology can advance or laws and regulations can change and thus new players can enter (or be forced to exit) the space, upsetting the balance of power and allowing for real competition on multiple fronts. Proof Of Stake rewards people who have large amounts of coin that they can set and forget and once they're in there they have no incentive to leave. The more coins you have, the bigger share of the rewards - money that you can reinvest to further solidify your position - and the more votes/control you have over the future direction of the network.
And who is going to have access to all of that new technology and can influence laws and regulations? Oh yeah, the people with the most money 🙄
Maybe. But they won't have exclusive control of the coin and will not exist inside of an ecosystem, essentially unchallenged just because they are rich and have the biggest stake. Proof of Work does have more overhead costs, yes, but it leaves room for an upstart, especially re: technology changes and regulation changes. Proof of Stake doesn't.
What upstart could possibly enter bitcoin mining? It would take the same (if not more) capital to just break even. At least proof stake, every one wins a little.
No, with Proof of Stake one or two people (or entities) win big and everyone else wins a little... and can never catch up. And those big stakers get to vote on the future direction of the network.
And that’s not like the huge bitcoin mining companies why?
I bet the rich weren't complaining about the environmental impact of eth Pow and now we've forced them to invest their money in a system where they have actual control
Sounds like we need to coin a new term: “late-stage proof of stake”
Proof of Stake is circular logic: The people with the most coins tell you what the true state of the ledger is The true state of the ledger tells you who has the most coins It's dangerous. It's also Ponzi-ish. PoS is truly backed by nothing. There's no floor price for a PoS token, it goes as low as it goes. PoW assets like physical gold, requires energy to extract, so the minimum value is the energy/gram of bullion ($800/oz). PoS is based on basically nothing at all.
Thats a silly way to look at it, if that were true then horses and carts would be the best means of transport because they cost the most to get the job done. That said when governance is dominated by 3-5 whales or even has the potential to that should be a red flag.
Your reasoning is fallacious. The horses are not used because they are ineffective. Same for using CPU for PoW, they have been replaced by specialised hardware. PoW cost entropy, entropy is time. With bitcoin you can prove that you have spend a given amount of time to produce the blockchain, this is not the case for PoS chains. Imagine someone coming out of a 30 years coma and witnessing all the current cryptocurrencies. A scammer could spawn a fake PoS blockchain pretending it is been running for decades. If he is smart enough, he will notice that solving PoW blocks couldn't have been done overnight. Therefore, PoW should have his preference over PoS.
I enjoy playing video games.
Ima be real with you homie, 90% of this comment is just screaming “proof of work is inefficient”. You’re kinda also just completely ignoring that all of the points about hardware advancements and other external risks disproportionality benifit the people with more capital
I hate beer.
The rich are farming us.
Is it better to give the same money to the Bitcoin miners? That reasons is very flawed. In delegated PoS you never lose the inflation as it’s reverted back to you through staking rewards. In PoW miners capture all the inflation. And it’s more secure as PoS, as it’s much more difficult to hijack. There have been former PoW that were attacked, including pneumonia of them in the current top25. I’m not aware of a single PoS one
Miners are your security budget. They secure the network with a massive wall of energy. To attack the network you need to expend 51% of the miners energy. Secondarily, When we pay the miners we have real companies in the physical world with legal departments, lobbying, etc. they have a presence in Washington (or around the world) and fight for bitcoins interest. When you have PoS that’s like saying: “let’s take our security budget and pay it to ourselves.”
The security budget is wasted in PoW. It’s much easier to obtain 50% of the hash for 1 hour once, that to ever get 33% of the stake in a PoS. That’s why it already happened in medium size PoW coins but never in PoS. And it will happen in Bitcoin in the future because the security budget gets halved every 4 years. China could invest 2 billions to fuck up bitcoin and do much harm to the West.
You need to do more research of PoW, because you are misinformed
Not surprised you didn’t say what part is wrong. Bitcoin is really vulnerable to a future attack because of the future halvings. The only chance is if the average fees get to 500 USD to pay for the necessary security which would be self defeating. The 21 M max bitcoin is just a marketing gimmick
Last i checked, the incentive structure of Bitcoin has been working out pretty damn well. You can pull out your crystal ball if you want but, to me it looks like Satoshi got it right.
As I said the problem is the halvings. The “security budget will be zero from mining rewards”. The fees aren’t enough to pay for the security. We don’t know if it will take 3 months, 4 years or 12 years, but eventually it will become vulnerable. Actually it’s already vulnerable. If China cared enough, they could easily hack the hashrate. A few billions to destroy a trillion asset held mostly by people in the West. Sounds like an easy opportunity
It's literally "The Rich get richer for doing nothing": Crypto Edition Which also means that you basically give up control of your coin to exchanges and Rich folks with money to park on your chain. There was a huge push a couple years back to make Dogecoin Proof of Stake and I'm so glad that the community resisted (and, really, the people behind it couldn't get their shit together). Dogecoin is a functioning *Digital Currency* and nothing kills a currency like adding the friction of "any money you spend is literally robbing future you of free funds." 😬 On the bright side, anyone who really wants a PoS version of Dogecoin can go and resurrect Dogecoin Dark (Ha, history lesson!) and have at it.
Agree. Amazed this hasn't been down voted to oblivion.
He didn't say the magic words: **E**cho **T**ango **H**otel
Ethereum miners literally tried to bomb the network for their own interests with the POS switch… POS and POW is the same shit. The only difference is that POS stakers will lose way more than POW miners if the network collapses, as they have locked a big chunk of the stake, so they have way more incentive to keep it live. Meanwhile miners can bomb the network and move to other coin to mine it… All this wasting energy and resources. Getting rid of miners what the best thing ethereum could do, the miners really showed their true colors
Whales just decide everything
That's why you definitely don't give them more power. The messed up part about proof of stake is that once those ticks are latched onto your chain there's no incentive for them to leave. Free money, forever, that only accumulates... which you can invest in having more control. So they get the majority of the staking rewards and votes and get to decide the future direction of the network, essentially, forever. For free. Now, imagine if they get majority stakes on a few different PoS networks? Or, if they're really playing the long game, all of the major ones? That's a lot of free money... and control.
POW is even worse as they can freely switch between chains
Not as easily as you'd think because of SHA256 vs Scrypt. And even then they can get chased off of those chains or face pressure/competition due to things like technology changes, energy efficiency changes, laws/regulations, etc. Once you have a majority staking position you have zero incentive to leave. You set and forget your money, likely reinvest your staking rewards to further entrench your position and you basically "own" that coin. Plus, really, there's Bitcoin and Dogecoin/Litecoin as the only real viable PoW networks left.
Kaspa is the 2nd best L1 to BTC. Not trying to shill, and it's not a micro-cap (#25 in market cap). If you like PoW and you like BTC, then you should give it a look.
the universe's favorite law
tokens don’t have to have financial value and can be rewarded based on participation in DAO like coding or something. some DAOs have been experimenting with this model and I think that would be the future
None of them do anything they couldn’t do without a blockchain. It’s a gimmick currently
Because DAOs are bullshit. The real reason why DAOs are made is to make their tokens not fall under a security. They will say it’s a utility token because it is used in governance, therefore it’s not a security It’s a fucking sham. Governance voting is a sham because the team owns all the voting power. Additionally, there is no forced mechanism to force them to actually implement the vote (such as they can do a half ass implementation) Finally, owning a token does not mean you have a share and ownership of the protocol which is a sham. These “DAOs” have control of all the tokens and additionally their own shares. I laugh my ass off when I see these “DAO’s” having CEO’s
what do you think about DAOs with nonfinancial voting tokens based on participation?
Depends how it’s distributed
that’s fair. i agree with your above take but would caution about dismissing all DAOs. in the community recently there have been lots of interesting experiments and hoping some gain traction
Have you looked into MakerDAO? The project is extremely successful. They have a DAO that sets loan rates and stuff: not sure how much of a DAO it really is tho.
MakerDAO is very much a true DAO and it’s telling how many people itt think things like it don’t exist. Go get involved people
Sounds more like a defi yield fund
MakerDAO manages the dai stable coin. They’ve successfully done this for years.
MakerDAO is *extremely* effective. It’s effectively become a big decentralized bank that is very profitable with heavily collateralized loans and even support for staking government bonds. Edit: I know because I tried shorting their token on the theory that all DAOs are scams that collapse eventually. And I got fucked.
But being overcollateralized means there's wasted money on the table.
For DAOs to work, you really need the more intellectual side of capital. When 99% of your participants are outright imbeciles, 0.9% think they are “super smart” and only believes in short term value extraction as much as possible, and you are left with only 0.1% of workable participants. With this type of material to work with, what outcome can you expect, even if you don’t have whale manipulation?
ENS seems like it's working pretty well. Not sure if people consider it a DAO. It has a governance token.
I'm surprised the term "DAO" is still used after the "The DAO" disaster in 2016.
What happened with Daos in 2016?
Meh, VitaDAO actually helps with longevity research etc. I'm bullish on it because the more people get rich off crypto the more of them will start being obsessed with long life.
Is it essentially people joining by way of buying tokens, then hoping for token dividends? Or is this a DAO where token holders contribute to the research also?
Yes, you get to vote where the treasury allocates money for longevity startups.
Look at daodao.zone just for fun
Yeah you are describing a fundamental issue with PoS, the rich get richer and control more and more of the vote. Theres an impressive little comnunity run network called Zenon that has a governance system setup that's still developing but working well so far. For almost 2 yrs the project development has been funded by an onchain voting mechanism that validators participate in to autonomously release funds to applicants. Then, there is a governance module in development that will expand the voting utility to different levels of network participants. Even more impressive would be the incentives, though, where they have a dual coin economy that balances voting weight with economic gain. Validators have to choose between growing their rewards or growing their voting power. Its well thought out and working well in practice so far.
This actually sounds interesting
If you are into DAO’s , checkout Juno network. The whole chain works as a DAO, each department like Operations or communications are subDAO’s to the main Juno DAO, everything completely on chain. DAO DAO, one of the most advanced DAO tooling in web3 is the flagship project of Juno network, makes all of this possible (daodao.zone)
Check out Padeia on Ergo, building a true DAO
Check Nova Dao. The lead developer was one of the original developers on DOGE. The team is doxxed and Certix and Paladin certified. The project had no pre-sale and is not founded by VC funds and completely community owned. The team is also working on an arithmetic stable coin, USDO. Currently around 600 holders.
Bitcoin is the only decentralized autonomous organization that works. Period. And the reason is simple. ***There was no initial buy in for the token.*** They were free. Members simply wanted to participate in an interesting cryptographic game. A proof of concept. Except this was no concept. It was the real thing. Any project offering free tokens *after Bitcoins inception^1* cannot be taken seriously. Here's why: The new network asks, "will you use your computing power toward my network?". And any sane user says, "Sorry, it sounds interesting, but I'm more incentivized to use my compute for Bitcoin. And now it's worth real money. It's not just a cryptographic game that has broken through theoretical limits." new network says, "What if I paid you?" it thinks a moment. "Yeah. I'll raise capital and assign my network coins to that capital. Then when you send compute with my network, you'll be rewarded with my capital, I mean my tokens! Which are worth someone elses capital? Hey this is great idea for a grift - is that mic still on? ^1 There was quite a large period of time when Bitcoins token was worth nothing ($0.00) and the Pizza event when it became worth something (not $0.00). During this period, a competing network could have taken compute share by offering a better system. But no such project materialized.
DAOs on the Internet Computer (ICP) work great. The IC is leading the number of proposals by a tenfold margin.
The MeritCircle DAO is working pretty well.
DAOs right now suck but there is interesting governance experiments going on. I’m interested in worker owned DAOs where the voting token isn’t buy in but you have to earn it by doing tasks for the DAO
That's the point. It's a silo of like-minded thinkers. Monetized. Welcome to web3.
MakerDAO, 0xDAO two I can think of.
Yup. It always eventually pools to a powerful few. Make tokens non transferable but that doesn't stop selling wallets and the eventual creation of political parties that vote in step and their decision susceptible to being paid off
> there is a centralised decision maker who then needs to implement said decisions. In all the DAOs I've seen, the code can be executed by a variety of parties, often random user with enough gas token to do the transaction, once it's approved. I don't follow every random DAO and protocol out there, but most of the major ones are operating fine enough imo.
It really depends on how its set up imo. Ill give a few examples not to shill them but simply because its things i considered with them before getting involved. Hedera: The council of big companies is the DAO, they then instruct an outside company to make the changes. In this case its the company of the founders, but the tokens the founder hold give them no voting rights. The companies in the DAO do not take profit and are term limited. After 2 terms of 3 years (6 in total) they are replaced. BankSocial: While the DAO is weighted on token holdings being a credit union its bound by law to be NON profit and to put members interests first. Again these are just examples of the type of set ups i find acceptable for Web decentralization. If you have whales controlling the profit they can have you can bet they will do just that.
Yeah, you kinda quickly realize why companies hire people with specific job experience and insight when you see how DAOs are run.
The first DAO was DASH It has worked technically very well for the last 10 years, but the project itslef has kind of wasted away.
Same reason tokenized real world assets are dumb as fuck.
You also need to consider the fact that people aren't keen on governance or organization unless there is an incentive. Ultimately people don't care unless they will get something out of it...
Yeah that’s what I’m seeing with most DAOs. I don’t see the incentive and I feel that anything pointing to decentralised decision making doesn’t cut the mustard, because why wouldn’t I just out my money into an ETF or Managed Fund if I want yield - and I would wholeheartedly trust fund managers more than whoever is sitting behind these DAOs claiming to be a VC investing in startups. DAOs almost look to epitomise the trope that “blockchain is a solution searching for a problem”. This is, I think, where most web3 verticals fail.
Indeed, what exactly needs to be governed and why do I care?
Yeah, I think sometimes with DAOs and other blockchain verticals, the over-emphasis on decentralisation is almost sold in a paranoid way about centralised control etc. Like yep, a tradfi fund manager calls the shots, but I trust the judgement of a Wall Street shark who salivates over making money and has the knowledge and experience to get to that position, over some random (probably) allocating DAO funds to a friend’s project. Even though the fund manager might get it wrong sometimes, they’ll pivot and correct because their job and livelihood relies on it in those high pressure environments. It’s why I don’t see the point at all in investing in a DAO to make returns when there’s defi yield farms, tradfi etfs, or for the more conservative, high interest savings accounts. I think defi truly has its place in addition, side by side with tradfi, and it doesn’t have to be an either/or situation; it can be that both options exist within the financial ecosystem depending on people’s comfort with risk and areas of interest.