In part 1 of considering the benefits of a DAO for the proposed Space Collective, we explored what a DAO was (How a DAO might fit a Space Collective).
When considering creating a DAO, the Space Collective, besides deploying their own has several platforms to choose from: Aragon, Colony, DAOhaus, and DAOstack (no longer in active development). Since the Space Collective should start simply and with as little friction as possible, learning how to deploy our own is more trouble than it is worth. DAOstack was a strong contender when I started this research as it had an interesting technology stack. Now that it's no longer being improved, it is no longer worth considering.
Colony, DAOhaus, and Aragon have similar philosophies and functionality. DAOhaus is ahead of the other two by offering a more complete package: there are fewer connections to external services to make the whole things work. The flexibility of the structure is also attractive, with clear paths to advance from a few people talking together to running multiple projects with complex public offerings.
Is a DAO even Necessary?
Technically, DAOs need little coordination software to work. A Telegram or Patreon account with a bot is a kind of a DAO. Telegram is better at human coordination than financial, and Patreon allows the organizer to use funds without the community's input.
So, what benefit does using something like DAOhaus bring? The main answer is DAOs attempt to solve a number of human coordination problems including: sybil attacks, the tyranny of the majority, plutocracy coin-voting, and voter fatigue.
If you have a Judeo-Christian background or even passing knowledge of the Jewish scriptures, "Moloch" is an attention grabbing name. DAOhaus implements Moloch DAOs, an open source DAO. This piece, Meditations on Moloch, does a terrific, if lengthy, job of connecting this ancient demon with the human propensity to mess up collaborations. What is summoned with the creation of a DAOhaus instance is not Moloch the ancient god, but the slayer of Moloch. This is worth clarifying as it is not clear from the lingo. In this article we use "DAOhaus instance" and "Moloch DAO" interchangeably.
Protecting Against Human Coordination Problems
Sybil Attacks
A Sybil attack is where attackers create many pseudonymous identities and use them to gain influence on a platform. The Space Collective should be an organization with members from all over the world and without knowing each other personally, Sybil attacks are a genuine security risk. DAOs resist this by requiring members join by a proposal that members vote on. A third-party protocol like Proof of Humanity can provide further defence against this kind of attack.
Tyranny of the Majority
The tyranny of the majority is a problem where a minority of members feel they have no voice because most users consistently get their way. A DAOhaus instance overcomes this problem with the concept of "ragequit" where members can leave the organization when a vote doesn't go their way. Upon leaving, they take their share of the treasury with them, making the action a powerful influence on those left behind.
One consequence of ragequit is that people leaving the organization remove the dissonant voices. For those who believe that diversity is a strength, this could be a problem. Alternatively, the overall alignment of the community improves with each person who leaves.
Plutocracy and Coin-Voting
"Plutocracy" is power from wealth and in many organizations the decisions are aligned with the HiPPO (Highest Paid Person's Opinion). Money naturally confers influence, but not necessarily knowledge or wisdom. DAOhaus memberships and governance are not defined by a financial asset, which protects users from this kind of bias.
Coin-voting, as described by Vitalik, is a problem where cartels of voters sell or pool influence to manipulate systems like DAOs. For a Space Collective to function long-term, such a situation would prove terrible. Moloch DAOs Guard against such an attack by making loot non-transferable and governance shares non-financial.
Voter Fatigue
When people ask to vote on a regular basis, especially if the topic is complex and requires attention to understand, "voter fatigue" becomes a problem very quickly. Because the Space Collective wants active participation in the form of voting, this is a problem to guard against. In Moloch DAOs not voting is the same as voting Yes, a kind of consensus, as discussed above. The result is a kind of optimistic governance where fatigued voters do not obstruct the organization's progress.
Designing for Serendipity and Emergence
With a Moloch DAO, the community is not simply beholding to the rules of the smart contract. Social governance remains an integral part of decision-making, making them highly flexible to policy changes. Changes to the DAO's to member qualifications or requirements for receiving DAO funding, for example, can be made without changes to the smart contract. Humanistic coordination is more likely than mechanistic coordination to create serendipitous activity and emergent value. And the basic system can be extended with voting shares and loot (described below), improving the overall system usability.
Thanks for reading! The series continues with an exploration of simple ways to start and pathways to more complex structures revealing the utility and flexibility of DAOs for a Space Collective.
Two DAOhaus articles were instrumental in helping develop the ideas for this post What the devil are Moloch DAOs, and why should you care? and How the devil do I use a Moloch DAO?.
Photo by Matteo Vistocco on Unsplash