In response to the conversation about DAOs in ep. 4 of many such cases: https://warpcast.com/ted/0x63192c8c
A few weeks ago, I attended the kick-off of The Generosity Collective, a new program through the Community Foundation of the Ozarks (CFO). The idea is simple but powerful: if we all donate individually, we can have a limited impact, but if we pool our donations, we can have a much bigger impact. Everyone donates an equal amount and gets one vote on how the funds will be distributed.
Our first vote was to narrow down the themes for which we will solicit grants (think "mental healthcare" or "early childhood education"). That will result in four areas, and we'll solicit grants in each area. A grants committee will review those and then send a selection for each of the four areas to GenCo members. Members will vote, and four non-profits will get a share of the funds. The CFO retains 10% of the fund to fund future GenCo initiatives and cover overhead.
While sitting there, I started thinking about how we could manage this on-chain. We could make it something like a DAO, control the funds via smart contracts, and have submissions come in and distributions made on-chain. It'd be neat, right?
But setting that up seems complex. What we have right now is people handing checks to the CFO. There's a CEO and her staff who will manage stuff, and then we vote, and the CFO writes checks to the non-profits. The amount of engineering complexity is next to nil.
One of the promises or benefits of a DAO is to reduce corruption. But there's not much opportunity for corruption in this system. If the CFO doesn't distribute the funds, we'll see that.
So, I guess a DAO would be necessary if you were trying to organize something similar but with strangers and without a CEO or staff. In which case, you could probably just use something to facilitate voting (a token-gated vote on Farcaster exists now) and then Fabric for the crowd-financing piece.
I ended up in the same place I often do when thinking about blockchain solutions. I struggle to think of real-world needs. What problem does this new blockchain thing solve, and if we can think of one, does it solve it better than existing lower-tech methods? Does it solve faster, simpler, or cheaper?
Let's pretend that we wanted to set up a GenCo but worldwide, which means we don't have the same trust established that I have with my local hometown community. A DAO or Fabric might be the solution, but I've got to ask: are we trying to solve something that maybe we oughtn't solve? Too often, we don't know how to solve problems far away in other people's communities, and our attempts make things worse. And there's no real way to ensure no corruption after the financial transfer; everything might have looked good on paper such that we vote to award funds, but the funds may not be used well, and since the organization is Over There, none of us may find out.
I like tech and exploring novel solutions, but I'm struggling to think of something that DAOs solve. Even the assertion that they can reduce corruption is suspect to me; just give this a read: DAO Decentralization: Voting-Bloc Entropy, Bribery, and Dark DAOs.
Like Ted and Jonny, I'm here to learn more. If there's a case study or example of a DAO solving an otherwise unsolvable problem or solving it cheaper/faster/simpler, then I'm keen to learn about it. I want that to exist. I'm just not sure that it does.
