Thread by @jbrukh

Ok, here’s a story about #DAOs, their evolution, and their on-chain/off-chain nature.

Back in 2014, @VitalikButerin wrote what is essentially Ethereum’s original position paper on this subject, the famous DAO/DAC post on ethereum.org.

👇👇

DAOs were quite abstract concepts back then, there were no such things in production.

There was also a sense that DAOs were something new, a revolutionary species of digital organization. And that they didn’t exist before because it was *smart contracts* that enabled them.

It should be no surprise, then, that the first DAOs put a heavy emphasis on codifying their functionality on-chain, within smart contract logic.

github.com/TheDAO

The very first massive DAO, #TheDAO not only had all of its functions defined in its code, it was the first to broadly surface the #CodeIsLaw debate—an important philosophical concept necessary to understand DAOs in the real world.

davidgerard.co.uk/blockchain/the…

It was also #TheDAO’s on-chain nature that led to its downfall, as a hacker took advantage of an immutable bug in the code to drain its treasury causing chaos, lost funds, regulatory scrutiny, and an hardfork that cleaved the Ethereum community in two.

medium.com/swlh/the-story…

The #DigixDAO was another early DAO of this era. Its on-chain nature later led to a messy divorce from its community, which had to dissolve the DAO on-chain in order to redistribute its underlying capital.

blog.coinfund.io/digixdao-divor…

These early stumbles cooled the DAO space for a while.

But in 2017, a number of projects, including #Aragon, #DAOstack, #Colony, and #District0x, began to construct DAO *frameworks* — toolkits that would enable anyone to customize and launch a DAO.

venturebeat.com/commerce/no-ce…

These frameworks had incredibly forward-thinking ideas—holistic consensus, DAO networks, on-chain dispute resolution—all of which continue to play out in today’s blockchain as trends & research areas, often in more mature contexts like Network States.

thenetworkstate.com

But technologically they continued the tradition of the space to emphasize on-chain implementation. These frameworks, especially #Aragon, were highly customizable for any purpose, and all features from access control to voting were unwaveringly on-chain.

cryptorating.eu/whitepapers/Ar…

In 2017, this strategy didn’t quite pan out as we would have liked. DAOs were still very nascent and saw little to no demand from serious organizations. Likewise, the world knew Solidity poorly and didn’t really want to customize anything.

But the biggest blocker for on-chain DAOs were base layer costs. As Ethereum scalability became an issue in 2017 & on, on-chain DAOs turned out to be really expensive to use and most “normies”, who couldn’t get on Ethereum in the first place, stood no chance at being customers.

Around 2020, as the DeFi Summer fired up some new use cases for DAOs as protocol treasuries, the pendulum swung the other way.

Groups decided to minimize the on-chain surface area of DAOs by switching to multisig wallets.

news.bitcoin.com/harmonys-100m-…

Now, most DAO activity—proposals, debates, meetings—happened off-chain and the multisig was only used when the DAO made a decision and settled it on-chain.

Users realized that most of a DAO’s activity was a social or cultural phenomenon.

xdaoapp.medium.com/social-daos-an…

During the COVID-19 pandemic years, various online communication products saw unprecedented demand.

A DAO now started to look like a bundle of tools: Zoom for calls, Discord for debate, Snapshot for sentiment analysis, and Gnosis Multisig for settlement.

decrypt.co/resources/what…

I’m just 6 years we went from Vitalik’s pristine and futuristic vision of fully on-chain ‘automated’ DAOs to DAOs being an unwieldy bundle of web2 SaaS products that you have to pay for with a credit card.

https://twitter.com/jbrukh/status/1577090914253619200?s=46&t=U_bVGhTUGAWzOS5G_GSNmQ

https://t.co/ngITu3VPXS

In 2022, the pendulum might swing the other way. @0xMetropolis’s post argues that DAO functions should go back on-chain to regain those great DAO benefits, like lower counterparty risks.

Moreover, various efforts have made blockchains much cheaper today!

orca.mirror.xyz/T70CmuhX95ubkw…

But even if we buy into the “trustware” concepts of on-chain DAOs, the social and cultural aspects of DAOs aren’t going away. And neither are the tools, SaaS, and communication modalities that are required to support the communities that make DAOs tick.

Where do we go from here?

I’d argue that what’s missing in the DAO space is not any particular architecture or communication product.

DAOs are not just one “app” or one bundle of web2 SaaS.

Instead we need to start thinking of DAOs as “multifunctional” tools that are integrated into a single experience.

That means that a DAO is a communication forum, a Zoom room, a sentiment analysis tool, and a smart contract wallet all at the same time.

It should have a coherent interface that surfaces and emphasizes those functionalities at the appropriate time.

We can think of this New DAO as a fixed set of “packages”, in the #npm or #aptget sense of package managers. These package sets can be versioned, changed, upgraded and come with a desktop experience that users can log into quickly.

The experience should be available on mobile.

What I’m really describing is the integrated experience of web3 in general.

IMO, cracking this will be a major driver for web3 adoption.

If you like this concept, read my post about the web3 inversion of control here.

https://twitter.com/jbrukh/status/1574528299912630272?s=46&t=eWPhcGxWkqqxP30KUuik8A

https://t.co/slHB0SN55X

And as I mentioned previously, the only place that I know this experience is currently possible is #Urbit.

What do you think?

/the end