A potential issue we may face as a community is that our focus has been on DAOs when many of the organizations in this space are not DAOs rather they are a new type of digital entity. We take what Vitalk outlines in his 2014 post as a Decentralized Community and embed a DAO within the community to add structure that enables self governance and the ability to deploy capital as a community.
A DAO is a logic based system that combines technical infrastructure with people within a protocol. In DAOs the people are operational elements that have no preference for outcome rather they execute their protocoled tasks. If the DAO needs support completing a task that the protocol can not achieve then it contracts work from people to make achieve it. The core of these systems are that people don’t make decisions rather the protocol does which allows DAOs to achieve its objectives.
DAOs are logic based systems which are fundamentally different from what has generated from what we call NFT based “DAOs” as these communities form without common objectives established around a central element like a NFT collection. It is the abstract sociological elements like social identity and culture pulled these groups together FIRST then they established a DAO to help them operate and establish objectives as a community.
As these communities now have internal capital they are able to deploy it in whatever capacity the group agrees to even if it’s not in line with the any established objectives of the community. This also creates a new incentive structures based on social needs like friendship, intimacy, recognition/reputation. I am defining these new communities as Decentralized States (DSs) as they have the ability to self-govern and deploy capital as a community.
These DSs are what will be the building blocks of a potential Decentralized Autonomous Society as DAOs perform only programmatic and operational activities but can not operate outside their set protocol. However, as DAOs are a core element of the decentralized world they require people to operate. To realize the full potential of DAOs we need to establish systems that sustain the human needs of the ecosystem. DAOs enable these communities ability to self govern, collaborate and execute on those activities.
The primary barrier to scaling these DSs becomes based on sociological elements that hinder greater forms of collaborations amongst members. The importance of DSs scalability comes from the ability for communities of people to achieve more working together and is the reason corporations and co-ops form to create a business that small groups of people couldn’t be successful in achieving.
On-chain solutions establish a trustless system but a society is not built through the establishment of technical infrastructure rather its how we as a society use that infrastructure. We now have a set of trustless tools but our social interactions still require trust as we use these tools. How we use these this infrastructure and our intentions have dramatic impact on our ability to operate as a society and establish the vision of the NEAR Ecosystem.
With recognizing this we need to take a new approach to how build the ecosystem with investment and research into social development and scalability at the same level and priority as we do technical infrastructure scalability. If we do not do this the rate limiting step to realize the NEAR Ecosystem vision will be based on our ability to uses these systems to operate as a successful large scale society.
The anatomy of the Decentralized State at scale would potentially look similar to this. As the DAO would not only sustain the operational activities it would also need to invest and support the socialization side of the community. Several Solana based DS are operating or building to a similar model.
Interesting post, welcome to the forum @LtLollipop
Thanks for sharing your perspective and contributing to the discourse around decentralisation. I would love to learn more about your views, please schedule some time on my Calendly and let’s discuss all things NEAR and DAOs.
Hey, your models look amazing and really helps to understand the possibilities for large communities or clusters of communities. I’m trying to launch a project that consist of a DAO that give support, governance and treasury to a social initiative 100% IRL, but the expectation is to reach more communities on one hand and on the other more experts (or communities with X expertise or knowledge) to join the DAO and serve as mentors. In time (hopefully about a year) move into a metaverse or VR platform to host events, marketplace, seminars, etc while being a game. Would you allow me to share this with my team? and hopefully little bit later give us some consultation? Thanks!
Absolutely feel free to share. I posted here as I am working on a more robust whitepaper on this topic and wanted to get feedback as I believe there is an approach we can take as an ecosystem to enable this form of social scalability. But instead of building for the barriers we face today with DAOs and decentralized communities, we leverage the understanding we’ve built in the traditional world and start outlining higher level plans with the holistic system we can enable a new form of decentralized interaction. But this takes an ecosystem level approach of collaboration and NEAR is in the right position to do this with the design of the protocol and the vision they had for it.
To expand further I wanted to give more concrete definition to what these different groups are in relation to each other. What makes a Decentralized State vs a Decentralized Autonomous Society in the context of human interactions and collaboration and I distilled it down to three main elements.
If the group is accessible to anyone or restricted
From these elements I highlighted the different permutations of types of human based groups that form based off these elements. These can be applied to both apply to physical / digital groups or centralized / decentralized groups.
The key differentiation to the ecosystem level and what I call the Decentralized State relates to access. A Decentralized Autonomous Society does not have restricted access and anyone by simply joining the network can be a part of that DAS. It has capital as an individual can stake their NEAR and get something of value back for doing so.
A Decentralized State adds further structure and organization by gating access, be it token based or an approval process. Access as a member has scarcity and that scarcity gives the ability to get through the gate value. NFTs formed a good mechanism for this gating as tokens are not a divisible unit and there is a pre-defined and limited supply. Through the perception of value being a member of the DS has and the scarcity of the NFT is how people determine value of the NFT. This perceived value also creates some of the unique sociological issues present in some DS today as its highly variable and part of a broader macroeconomic system.
DAOs also fit within this definition as a DAO established for a purpose can also be restricted or unrestricted based on the type of DAO you set up. As an example lets say you want to set up a DAO to provide legal guidance for specific areas of law. You may not want someone unqualified providing that service so you establish a process to vet and verify their credentials. This would fall into the traditional business category as to do work for this DAO you must first get through the gating. This may be different than a DAO that needs support in transactional activities where no specialized skillset is needed and in these cases the activities may be open to whoever wants to do them, which would fall into the Crowdsourced Business category. This however isn’t a rigid model as a DAO could have both within it where some activities require gating and others don’t.
Understanding these variables could have major impact on how we design the systems as from them we can better tailor incentive models that are not based purely on capital. We can establish new prestige based models where contributions within DS or DAOs could give gate access to new opportunities or communities that were inaccessible to the user before.
I’ve gone through my prior posts and made some updates to the graphics to make them a bit clearer to understand.
One big question on all of this is “Why?”. Why does it matter to have clear definitions of DAO vs Decentralized State/Guilds? Grants and Funding. What we require is a shift in perspective of what we are investing in and a clear business case for why it’s worth the cost. To bucket funding into a DAO bucket or governance bucket may make it appear that the ecosystem is building the core elements for community scalability but how do we know the funding is sufficient? How do what is our success measure? Are we targeting the ecosystem broadly or just specific Guilds? Are we funding just education or are we funding sociologic research to understand how people operate at scale in these communities?
To ensure optimal adoption of the NEAR ecosystem we need to invest in the tools for communities to use. The easiest way to do this is look at Organizational Change Management. If we want communities to be successful the ecosystem needs to give them tools and resources to be successful. Education is one element but education alone creates barriers to adoption. You don’t need to teach me how to code smart contracts on NEAR for me to use NEAR applications. But you can just show me how to submit a transaction and make the transaction approval page clear and easy to read to a non-technical user. Community scalability takes this same approach, where we can invest in building systems and tools that are out of the box ready if they communities want to use them.
When an art guild wants to start a DAO we want those community members focus on doing Art. Many do not get into art for the opportunity to research and learn how to develop governance systems, organizational models, incentive models, or talent identification and verification systems. Guilds are communities of people that share a common interest looking for a DAO to handle these non-art elements for them so they can stay focused on their passion.
Organizations in the traditional setting spend billions of dollars on tools, infrastructure and change management systems and while we could let our communities do it on their own we have vested interest in their success. Especially when looking at the economics of NFT projects as the NFT derives much of it’s value from the perceived value of being part of the community. The breakdown or social discourse of a community directly impact NEAR users financially and psychologically. This isn’t a technical systems its a human system.
The NEAR protocol was designed with a top down approach to creating a technical protocol with the Creator Economy in mind. I believe we should take the same approach and establish a community based infrastructure strategy and research approach at the ecosystem level to ensure that we can reach the Creator Economy vision. I intend to propose a pragmatic and realistic approach to doing so by outlining what we can do today and what infrastructure we need to research and invest in.
