Rabbit Hole #5: DAOs
Hello from Texas! I’m in the countryside near Austin for a month to work on my projects, mainly the Journal of Actually Well-Written Science (which I really enjoy calling JAWWS). It’s incredibly beautiful out here. I’m living in this cool cabin made of containers:
I’m here thanks to the patronage of Creator Cabins, who have invited me and three other cool people to work on our personal stuff for four weeks. This turned out to be fairly complicated to explain to the US border official at the Montreal-Trudeau airport. They had me undergo secondary screening and asked me a lot of questions about the residency, how it works, and why I was invited. It was all fine in the end, though stressful.
Good thing I didn’t mention that Creator Cabins is a DAO — I don’t know how I could have explained that.
Wait. What’s a DAO?
“DAO” stands for decentralized autonomous organization. It’s a crypto thing.
I can imagine the weary look some of you have right now — “oh no, crypto, I don’t understand anything about any of that.” Well, worry not: we’re in the same boat. Crypto is something I never looked into very much. It has always seemed daunting, with no obvious entry points.
But now I’m part of a DAO, so I should probably understand what that is. So I’m going to make my own entry point.
A Very Shallow Introduction to DAOs
So, what’s a DAO?
The easiest way to start is from the acronym. It contains “decentralized,” “autonomous,” and “organization.” What do these words mean?
The organization part is straightforward. A DAO is a group of people who want to achieve some goal. It is like a company or a non-profit organization. Starting a DAO is like starting a startup. But of course, DAOs differ from companies and non-profits thanks to those two adjectives.
The decentralized part comes from the blockchain. The blockchain is something I need to spend more time understanding, but broadly it’s a public record of transactions that can be trusted thanks to cryptography. All transactions that a DAO does are on the Ethereum blockchain, which means they can be trusted without supervision from an external authority. Hence, “decentralized.”
DAOs are also decentralized in the sense that decisions are taken by anyone holding a piece of the org (a “token”) rather than some central executive team.
The autonomous part comes from smart contracts. Smart contracts are contracts embedded in code. You could, for example, write a program that makes the DAO automatically purchase some amount of cryptocurrency once a sufficient voting threshold among members is reached. There’s no need for administrative support employees to oversee the transaction — it can be done without human intervention. Hence, “autonomous.”
(I expanded these two definitions from a paragraph in Packy McCormick’s pretty good introduction to DAOs, which is goes much more in depth than mine.)
In other words, DAOs are a type of organization that differs from other organizations due to the relationships between its members and to the way it sets its rules. It’s hard to be more specific than this, since DAOs can be used for virtually any purpose, just like a company can do things as varied as selling insurance to providing cleaning services to building spaceships.
Compared to traditional organizations, DAOs have both advantages and tradeoffs. DAOs allow experimentation in governance, which may end up creating much better models for some use cases. For example, they can provide a decentralized way to fund artists. But they can also make it difficult to get anything done — the dreaded “death by committee” — and it’s unclear how much legal recognition DAOs will have.
(This beginner’s guide to DAOs by Linda Xue has a good overview of the potential issues.)
Creator Cabins, also known as CabinDAO, exists to give a space for people to create stuff. It’s about one year old, so it is still experimental. It came into existence as a way to crowdfund creators — everyone who donated got some $CABIN tokens, and can now influence the decisions taken by the organization. As of yesterday, I have my own one $CABIN token, so I’m part of it, too. (One token is not a lot, though.) CabinDAO is a bit special among DAOs because it has a very physical presence, which I am currently sitting inside of — a lot of DAOs are mostly virtual, happening between Discord servers and a bunch of new tooling platforms across the web.
(This post by Paul Millerd describes some of the early history of CabinDAO.)
DAOs might turn out to be very important as new organizational models. They allow a wide variety of projects — and they’re just getting started. It’s hard to predict what DAOs will be used for in the future.
DAOs and JAWWS
As I begin working on my science publishing project, I can’t help but wonder: would DAOs help with fixing science?
I’m not the only one wondering:
Interestingly, that thread spawned a few skeptical responses. Some are about how it’s really difficult to increase the efficiency of academia, due to the incentives that exist. Others point out that it isn’t clear that more democratic processes to allocate research effort would do anything better than the current mechanisms.
Yet, at the very least, it seems like the potential of DAOs to enable exploration of organizational models is a very good thing. Science is stuck in its ways — because it is globalized, because it happens in universities, because it is funded by governments, and so on. Not any change would make the institutions work better, but change would at least unstuck them, and allow them to grow into something better. Escape the local maximums.
Should my own project, JAWWS, be structured as a DAO? I have no idea. It’s easy to think yes, because I’m surrounded with people who dabble in DAOs and web3 here. It’s easy to think no, because DAOs are confusing and why would I want my project to not be controlled by myself? Maybe it should just be a company?
It’s a bit too early to even think about those questions. JAWWS is not even close to being an organization. It may never be, depending on what is the best way to achieve its goals of changing the writing norms.
But if it becomes one, I’ll need to do some more thinking about the shape it takes. I’d love to discuss this with as many people as I can, by the way, and find people to collaborate with. So please don’t hesitate to reach out or share this.