The Obvious Series: DAOs

There are two parts to The Obvious Series:

  1. Simple explanations for newer entrants

  2. Abstract wtf are we doing here reflections

Decentralized Autonomous Organizations (DAOs)

An attempt at innovating the company model.

The Simple

The standard public company model is as follows:

Shareholders are legally at the top of the pyramid, yet functionally impotent. The real utility, and access to capital, begins at the Board of Directors and quickly lessens the further down the org chart one is positioned.

DAOs are an experiment in large scale coordination. The company model for this experiment is:


Here the shareholder are not only functionally active, they are the company itself. Holders of DAO shares (known as tokens) are the only ones with access to company funds, proposal of corporate actions, and ability to veto, hire, and shift company focus.

The Abstract

DAOs are an egalitarian experiment in company coordination. We’ve already covered why decentralized access to liquid-markets are needed.

Now we examine access to liquid- cooperation. How does one gain access and mobility in a world of network-nepotism? How often does middle management ascend to the executive team? And speaking on executive teams, why are the termination of their salaries bullish news for quarterly reports?

A company is just a group of people. And in a group of people, there are politics; this is an inescapable part of human nature. DAOs bring a technological innovation to this.

The rules of this new game are simple:

  • access to shares of the company = access to the shares **in **the company

It is not a one-size-fits-all remedy to corporate governance. But it is a way to provide economic opportunity to self starters and underrated talents.

The best case study at present is Nouns. Where else in the world does owning two shares grant you access to a $50M+ treasury? Where else can you vote on everything the company chooses to do?

DAOs are networks for the new age. If successful, they will radically shift the creative, corporate, and commercial landscapes of the entire world.

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