daos

🧵 Just wrapped another fantastic "Let's Talk About /DAOs" space! 🔥

This was an interesting journey through the history of DAO emergence and the evolution of how we see governance power and who should wield it- and with what checks and balances.

Check out the recording if you get time, and keep scrolling to read the highlights!

https://x.com/i/spaces/1yoJMoAygkzKQ

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🎮 The SimCity Analogy: 

@tomatoxyz shared Will Wright's observation- children take wild risks and experiment in SimCity while adults play boringly. DAOs need that experimental, risk-taking mindset to attract creative people beyond governance nerds.

💿 Real-World DAO Success: 

What.CD was cited as a great example of decentralized curation- a BitTorrent music tracker organized through credit bounty systems and forum governance. High standards attracted high-quality participants.

🔄 The Regulatory Reality: 

Many DAOs emerged as liability shelters- issue tokens, give pseudo-governance power, avoid security regulations. This potentially pushed the blurring of financial investment with governance into such inappropriate territory.

🛑 The Power of Veto: 

Many agreed that veto power is a crucial governance mechanism. Think of it like water flow - vetos are gates that temporarily stop flow, not permanent blocks. The placement matters more than the mechanism itself.

🏛️ Traditional vs. DAO Governance: 

We compared DAOs to corporate boards. Traditional orgs have more clear structures for governance to protect the organization, but DAOs often mix shares with governance inappropriately- buying governance power becomes a capture vector.

🤖 Smart Contracts as Process Automation: 

A big revelation: smart contracts shouldn't automate actions, but PROCESSES. They should handle the paperwork, tracking, and administrative burden that makes complex governance impossible in traditional orgs.

📜 DAO History: 

We started off with an exploration through DAO history and recalled the early days of tooling development. The focus was more on the tech enabling solutions, rather than the organizational structure using the tech.

🌶️ The Spicy Take: 

@kyngkai909 dropped a seemingly innocent opinion that financial investors should have LESS governance power than active participants. Why? Because investors want financial returns, not to actually govern the organization.

⚖️ Governance Structure Deep Dive: 

We explored bicameral systems (like dxDAO's dual-token approach) that balance financial interests with reputation-based decision-making. The key insight: different roles need different representation.