DAOs [5] • Philosophy & Culture
DAOs are a new way of organizing people. Traditionally, a company structure has been the most effective free-market approach to accruing talent in pursuit of a goal. That labor is usually persuaded and controlled through wages. DAOs seek similar ends — the creation of value — but rely on a decentralized framework in which workers, users, and other stakeholders have true ownership of the entity.
👉 Part 1: 5 Actionable Insights
👇 Part 5: Philosophy & Culture
DAOs represent a new framework for large-scale human coordination and at the heart of human coordination — decentralized or not — is organizational culture.
No different than company culture at an early stage startup or community culture in an undiscovered music scene, culture can be defined as the behaviors, patterns, and values that emerge between groups of individuals. In their seminal essay, “Squad Wealth,” research organization Other Internet notes that culture can be comprised of anything ranging from “memes, hot takes, internal language, 𝓪𝓮𝓼𝓽𝓱𝓮𝓽𝓲𝓬𝓼, to artifacts that can only be formulated as a group.”
While every DAO finds its own ways to engender culture with visual, linguistic, and behavioral norms, two traits seem to be particularly commonplace across the DAO landscape: the tendency for constituents to act like owners, and the expectation of radical transparency.
Acting like owners
Ownership is hugely influential when it comes to the culture of DAOs.
Not only does it incentivize individuals to participate, it fundamentally changes how contributors think of their effort and labor. All work is grounded in the pursuit of a larger purpose, of which the upside is shared. Ownership imbues feelings of creation, success, and ~vibes~. It’s natural that an owner feels more financially and psychologically incentivized to support peers, uplift the work of others, leave ego at the door, and do their best work than a traditional worker.
Jesse Walden, the co-founder of investment firm Variant, was particularly prescient on this subject. In this essay, “The Ownership Economy,” Walden noted:
As the role of the individual in value creation becomes more commonplace, the next evolutionary step is towards software that is not only built, operated, and funded by individual users — but owned by users too.
DAOs are, in a sense, precisely this kind of “software.” They elevate the individual and give users a chance to contribute and own. That’s powerful.
Radical transparency
Transparency plays a crucial role in any organizational culture as it establishes trust between all players. DAOs enable this at an unprecedented level due to the public and immutable activity of any DAO’s ETH address on the blockchain. This creates both an implicit and explicit checks and balances mechanism that allows for a community of stakeholders to both stay informed on how a DAO is exercising its capital while ensuring a leadership team is making decisions in line with the community.
Radical transparency of this kind incentivizes collaboration over competition, and empowers individuals to take ownership over their work because of their deep understanding of organizational context.
Ultimately, a DAO’s culture is defined by the one-to-one relationships formed between groups of individuals that can be distilled into a repeatable set of behaviors and patterns.
Through new forms of fractionalized ownership and transparency, DAOs have the potential to create new organizational structures where users are no longer passive participants on a platform, but are active, properly incentivized owners of a network — with trust and coordination at the center. This distribution of power and culture leads to more agility, resilience, and antifragility that could help create a world in which large groups of people on the internet can contend with even the most powerful of centralized corporations.
