DAO Workshop Key Takeaways: The Focus Is Not on Material Incentives—Emphasize "Distributed" Rather Than "Decentralized"
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DAO Workshop Key Takeaways: The Focus Is Not on Material Incentives—Emphasize "Distributed" Rather Than "Decentralized"
The number of DAOs is now growing explosively, and by the end of this year, a large number of applications will be available for managing DAOs, making their complexity far exceed the scope that DAOs can effectively manage today.
Navigating Web3 tides with focused insights
On February 3, a webinar was held about Blockbuster DAO and other DAOs, featuring Tasafila (pseudonym), founder of BlockbusterDAO; Mihai Crasneanu, CEO of Beem; and Adam Miller, founder of DAOPlatform.io.
Below are the five key takeaways from this workshop:
1. Rapid Growth of DAOs
All participants shared a common observation: DAOs are evolving at an incredibly fast pace. Tasafila remarked, "Events that used to take six months during the internet boom now happen within seven hours. We saw this in December 2021." That month, Constitution DAO—which raised $49 million to bid for an original copy of the U.S. Constitution—tweeted about Blockbuster DAO when it had only two Twitter followers. Overnight, Blockbuster DAO grew to thousands of followers, forcing Tasafila to assemble a leadership team. Mihai described the early stages of DAOs as “one day equals one season… Even the most efficient startups cannot make such rapid progress in such a short time.”
2. Structure Helps Engage DAO Members
The first step in engaging people in a DAO is making participation easy. Then, the DAO needs to create structures that align with members’ interests and enable them to add value. Tasafila emphasized that a DAO can consist of multiple subgroups, each with its own treasury and rules. One benefit of this structure is ease of onboarding—new members can be directed to the group best suited for them, allowing them to start contributing quickly and effectively.
3. Non-Token Incentives Can Be More Effective Than Token-Based Ones
Adam pointed out that financial incentives can sometimes do more harm than good. He noted, “Extensive research in economics and psychology shows that if you offer excessive rewards to people volunteering for an activity, they become less likely to return and do it again.” This is because monetary rewards replace the intrinsic motivation behind volunteer work. While token incentives can drive task completion, many smaller tasks may be better served by alternative forms of recognition or reward.
4. The 'D' Stands for 'Distributed,' Not 'Decentralized'
Adam argued that the 'D' in DAO should stand for “distributed” rather than “decentralized,” since not all DAOs are fully decentralized. DAOs allow responsibilities to be distributed according to organizational preferences. Even for those DAOs moving toward decentralization, it remains an end goal rather than a defining principle. Tasafila agreed, noting that execution and communication require a certain degree of centralization. He highlighted transparency as the most important factor in his involvement with Blockbuster DAO—while major decisions will go to the community, smaller ones can be made swiftly without voting, significantly accelerating project progress.
5. 2022 Will Be the Year of the DAO
Another shared consensus among all participants is that DAOs have become the “it” thing in Web3. To illustrate: Constitution DAO launched in November, followed by Blockbuster DAO in December and Links DAO in January. The number of DAOs is now exploding. Moreover, although current DAO management tools are functionally limited, our experts believe that by year-end, a wide range of sophisticated applications will emerge to manage DAOs—far surpassing today’s capabilities in complexity and effectiveness.
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