"We are not the creators of history, we are made by history."
—Martin Luther King, Jr., The Power of Love
Collaboration happens through organizations, and each era takes its own form.
It began with tribes, when sounds, myths, and stories enabled the first humans to manage food supplies that hunters and gatherers were able to gather. When it came time to settle in the village, these stories became cults, religions and cultures to organize the field work.
The invention of writing and counting systems made it easier to communicate words and numbers in a lossless manner. Money soon followed, as trade became a necessity to organize agriculture (grain, meat, and fish) over larger territories through markets.
This led to new types of organizations called cities and kingdoms. Money also makes it easier to build military organizations, but also requires the ability to collect taxes.
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▼Illustration of Yuval Noah Harari's article "Reinventing Art Will Be the Most Critical Skill of This Century"
This is arguably what led to the colonization of the five continents and the bending of nature to meet human needs, creating the Anthroposphere.
Throughout history, new technologies have enabled new types of organizations, allowing us to collaborate more effectively.
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01. What is DAO
DAO stands for Decentralized Autonomous Organization. Having been around since 2016, DAOs are now on the verge of becoming mainstream and potentially the next relevant trend.
Perhaps because of the epidemic, Web3 technology is becoming more and more mature, and more and more people are looking for new ways of working. As recently released by the Bureau of Statistics: By the end of 2021, the number of flexible employees in China has reached 200 million.
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▼By the end of 2021, China's flexible employment has exceeded 200 million
People are looking for work environments where they can be freer, more independent and more connected to causes and teams they believe in, as opposed to less and less connected to typical hierarchies, corporations and similar highly competitive environments.
If this trend continues, it is very likely that we will hear more and more about DAOs in the next few years and decades.
"Why? Imagine a place where people from all over the world come together to work in an independent manner, with no central authority, where rules and decisions are governed autonomously in a 100% independent manner encoded by an algorithm? Is the idea crazy?
So what exactly are DAOs? First, a DAO is an organization. Everyone knows this.
We can easily refer to an organization as a group of people or entities that come together to work together toward a common set of goals. Organizations have established rules and protocols that define how members work together to achieve the goals they set;
Second, DAO is decentralized. Thus, referring to the fact that the organization has no central entity, person or shareholder that governs it.
Also, it doesn't have a typical hierarchy. Decentralized organizations are already popping up in many places, mostly in the form of communities, or more forward-thinking businesses that employ working models such as contracting and self-management.
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▼ "Twelve Citizens" movie clip
Third, and here's where it gets interesting, it's autonomous! Self-government means that the organization itself is completely independent, does not necessarily belong to anyone, and is capable of self-government. That is to say, in a typical organization (even a decentralized one), people are the owners, bearers and executors of decisions.
A DAO is something that somehow makes and enforces decisions for itself. how? Because DAOs are created and deployed on the blockchain, a technology that enables organizations to be fully autonomous.
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02. A spirit
In the purest sense, a DAO is an organization effectively run and owned by code.
You can automate many core functions of your organization, such as finance and payments, but you can also automate decision-making.
This is usually achieved through a set of Crypto wallets that perform all of their actions and decisions through code, and that code or rule book is written, deployed and exists on the blockchain. From the moment the smart contract is deployed, the DAO effectively exists.
Membership in a DAO is also a very different concept compared to a traditional organization.
The majority of participation in DAOs takes place in the form of token holdings or NFT ownership, which are then used to participate in democratic decisions among all holders/wallets. It's a very fluid way to participate, and you can join and leave at any time.
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▼Vitalik Buterin published a paper on DAO on Twitter
At the same time, a DAO still relies heavily on humans to perform all the tasks it cannot, but at the same time, since it is decentralized and autonomous, all decisions are stored and built around smart contracts that govern the organization, and are not around a specific individual or organization.
It's all incredibly hard to grasp. On the one hand, we're talking about a fully autonomous organization that almost sounds like a sci-fi dystopia, and on the other hand, we're still talking about how humans function.
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▼Annika Lewis compared DAO to a spirit in her paper on explaining DAO
Conceptually, DAOs are fully autonomous and self-governing. This means that as long as the consensus mechanism between wallets and token holders works, the algorithm handles everything in its purest form.
However, the reality is different and we know this is not the case. As we said: The DAO still relies heavily on humans to perform all the tasks it cannot. You need to build things, develop code, create UX/UI, interact with external partners, etc.
These people could be employed or empowered by a DAO, but once humans enter the field, subjectivity comes into play.
This is why acknowledging from the start that DAOs are neither fully decentralized nor fully autonomous may be a good approach. That's because DAOs are more of an ethos than a specific construct.
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▼DAO is accelerating development, Getty
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03. Oracle
In a decentralized economy, trusted sources of news become even more important than in traditional economies. Business contracts become more automated, reacting instantly to news events. (An automated news service in a P2P system is called an oracle)
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▼DAO Network | Based near Vancouver, British Columbia, Seed Club "Instigator" Jess Sloss for aspiring DAOs·······
These centralized oracles are recommended for any contemporary P2P project, because as of 2020, no decentralized oracles are powerful enough to be trusted in transactions of value.
However, for a DAO to be secure in the long run, many different types of trusted decentralized oracles need to be developed.
Why is a decentralized oracle needed? For the same reason, all other institutions on which the business depends need to be decentralized before the DAO can reach its full potential.
Anytime your DAO relies on a centralized feature, that's a centralized point of failure and a threat to the organization's survival. This means that the system is technically centralized.
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▼While DAOs have not yet posed a disruptive threat to traditional companies, leaders can still...
For example, if a DAO relies on a centralized oracle, this means that someone in the oracle hierarchy has the power to decide what information is shared. DAOs are automated through their smart contracts to rely on information from oracles. The DAO is automatically triggered to conduct monetary transactions based on this information.
Eventually, those with relevant power in the centralized oracle will realize the power they have over the DAO. Eventually there will be an opportunity to use this information. From a game theory perspective, they are right to exploit this power, given the competitive nature of capitalism.
You can never achieve a fully decentralized system, any more than any organizational hierarchy can become fully centralized.
With any actual instantiation of any project there will always be problems and weaknesses somewhere. Machines don't need to be perfect in every aspect of their work. However, if we can identify a weakness, we can fix it.
In theory, you could have overarching centralized laws that shouldn't allow this kind of exploitation to happen. In fact, there are many laws pertaining to this type of inside information.
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▼Wu-Tang Clan performed at the 2013 Coachella Valley Music and Arts Festival on Day 3 of Weekend 1
A powerful decentralized oracle finds better information. The wisdom of crowds can be used to discover the truth. For any complex situation, average information is usually better because they are less subject to individual biases, and individual information is more limited.
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04. Condorcet's jury theorem
In 1785, Condorcet first proposed a rigorous explanation of the wisdom of crowds. The same genius of the French Revolution, whose paradox prevents us from finding the perfect method of democratic voting, also gave us the arguments in favor of democracy.
Condorcet's jury theorem says that larger democracies are better than smaller groups in power. kind of. Condorcet demonstrates that larger groups of slightly wiser people are better than smaller groups at finding truth democratically.
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▼ "Condorcet Jury Theorem", John Morgan's jury
In this case, the more people you use to vote for the issue, the more likely they are to learn the truth. The larger the network, the more efficient it is at getting the correct answer. The answers of the crowd are far more sensible than those of the common man.
Since this is a strictly logical consequence, it is also balanced by the fact that larger slightly stupid people are worse off than smaller stupid people.
The stupidity of the mob is the balance of the wisdom of the crowd. Stupidity, here, is defined as being wrong a little more than half the time.
It's not clear if any mortals escaped this mission anyway - maybe we're all a bit stupid in the larger scheme of things. But there are areas in which we can train ourselves to be at least somewhat competent.
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05. Open source culture and historical culture
The open-source culture of the Web3 movement is absolutely necessary to achieve the goal of a decentralized economy. Transparency is critical in a decentralized network. Every feature needs to be publicly vetted for people to trust.
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▼ Sotheby's Live Auction, The Dawn of the DAO: What Happens When the Crowd Takes the Power of a Corporation?
The open source culture has been very successful in producing useful distributed applications that are critical to the functioning of Web 2.0. Open source environments are more innovative.
But from a business perspective, an open source culture makes no sense. Whenever you try to explain open source culture to non-technical business people, you get skeptical.
This might make sense in the utopia of a fantasy world where we imagine there is no scarcity and everyone is an angel to share freely, with no expectation of enjoying the rewards of their labor.
But that certainly doesn't make sense in our capitalist business world, where incentive structures work out our basic selfish instincts that have preserved life for over a billion years. From an economic point of view, open source makes no sense.
So why do people do this? From a game theory perspective, the current open source culture advocated by the Web3 movement is not sustainable in the long run.
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▼An online group called Constitution DAO hopes their victory will be the latest example of crypto overthrowing traditional centers of power
The way to create sustainable incentives for fostering an open source culture is to simultaneously foster a culture that recognizes past contributions. Academics of all stripes have lived in an open source culture for centuries, if not thousands of years.
Like Web3, academia thrives on transparency and open collaboration with strangers. Times when society was less intellectually transparent and less collaborative are often referred to as the Dark Ages.
Throughout history, the culture of open source has been the lifeblood of social progress around the world. But to maintain this culture of openness, a culture of respect for the past develops in parallel so resentment doesn't arise.
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▼DAO freelance workers, you don't know the Instagram influencers you render
Some academic subjects have a stronger culture of respect for history, such as philosophy and theology, and especially law, as evidenced by the density of footnote citations in any paper.
Some are weaker, such as science, especially mathematics, which often perfunctorily attach some important references at the end of the introduction.
Being constantly aware of the source of our thoughts is not productive. It's easier to simply state your ideas and build your argument without citing each idea's indebtedness to previous thinkers.
Having a culture of respect for history is unnatural and needs to be consciously regulated—another important catalyst for institutional integration into the decentralized DAO economy.
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▼Wilder World, a DAO platform and immersive 3D NFT platform
In the long run, this kind of momentum needs to be derived from a clear history in order to maintain the stability of decentralized organizations.
But what is the drive toward? If the system isn't moving toward healthy and productive goals, it won't last long.
The most important aspect of a decentralized organization, and the characteristics that ultimately determine its long-term success, is the organization's set of transcendent values.
