“A Prehistory of DAOs", Annotated
“A Prehistory of DAOs” is an essay that Gnosis Guild cofounder Kei Kreutler wrote. As its name implies, this piece traces the DAO’s ancestry from its organizational roots to its digital infancy.
I read this last week as a reference while I work on an analysis about CabinDAO. I had to leave out a lot of information to keep it tight, so I’m publishing this blog post to capture ideas from the essay didn’t make the cut. So this post is less of a fleshed-out essay, and more of my notes and thoughts on the essay.
A short message before we dive in: If you’re into DAOs, you’ll probably enjoy my weekly newsletter on web3, creativity, and the creator economy. Subscribe below to get more posts, or check out previous editions to “try before you buy”.
This essay reaches into the past and weaves in ideas from cooperative networks and gaming to help us better understand DAOs. The hope is that learning DAOs’ history will help us build a “syncretic theory of organizations” so we can pull from a variety of sources, including culture, historical patterns, and even political and mental biases to build the next generation of blockchain-native communities.
A DAO’s place in societal evolution
A key resource they referenced is David Ronfeldt’s paper entitled Tribes, Institutions, Markets, Networks. This outlines a framework that traces our societal evolution and their respective organizing principles:
Tribes — clans, lineage
Institutions — hierarchy
Markets — competitive exchange
Networks — heterarchic collaborative exchange → where we are now
What does “heterarchic” mean? Ronfeldt defines heterarchic as
“organizations that are non-hierarchical, unranked, or possess the ability to be ranked in multiple ways.”
DAOs are heterarchic in that there is zero to no hierarchy. Governance votes are passed based on how much token one holds or on how relevant your voice is to the proposal on the table, not based on one’s position as a bounty hunter or influence as a core contributor.
On the topic of token ownership, the essay outlines the 3 layers of a DAO, all represented, aligned, or financed respectively by token ownership:
Token: The DAO’s token lets it represent itself within the wider web3 ecosystem
Teams: Owning the same token aligns teams, guilds, and squads to work for the good of the community
Missions: The token is a way to reward contributors who fulfill missions and finance bounties for the DAO
What DAOs are made of
The essay quotes art curator Ruth Catlow as saying, “We need to be building cultures before structures,” while commenting that regardless of the organizational structure, “DAOs ultimately coordinate through collective vibes.”
And this is true. At their bones, DAOs are just a group chat and a multi-signature bank account or wallet. These chats tend to happen on Discord, the multisig through Gnosis Safe. The token comes much later when, as Kruetler notes, the DAO needs it as a mechanism for 3 functions:
Bootstrapping funding
Distributing governance rights
Aligning ecosystem of DAOs
DAOs & cooperative communities
Kreutler, borrowing from Vitalik Buterin, describes DAOs as organizations where a software protocol sets the rules for how the DAO operates, “placing automation at its center and humans at its edges.”
They go on to describe the latest iteration of DAOs as “a voluntary association with the operating principles of digital cooperativism.“ The only difference between DAO contributors and church volunteers is that the former get rewarded in token and the latter in ethereal, congregational brownie points.
Even if DAOs wouldn’t describe themselves as hippie co-ops, they definitely subscribe to the principles of one, particularly when they highlight member ownership. One interesting reference in the essay was to the Rochdale Principles from 1844. Modern cooperatives still use these 7 principles that can serve DAOs, as well:
Voluntary and Open Membership
Democratic Member Control
Member Economic Participation
Autonomy and Independence
Education, Training, and Information
Cooperation among Cooperatives
Concern for Community
DAOs & gaming
DAOs don't just draw inspiration from cooperatives or the corporate world. They draw inspiration from all forms of organized communities, including gaming.
For example, as gaming guilds “require diverse and complementary player skill sets over extended time periods,” DAOs also need contributors who bring different skillsets to the table and invest their effort into the community over time. Thus the advent of DAO guilds. Engineers join the product guild. Writers and marketers join the writer’s guild. Designers join the artist’s guild.
DAOs get work done by putting up bounties and the folks who complete the bounties are called — you guessed it — bounty hunters. These are all terms gleaned from the world of massively multiplayer online games like World of Warcraft, Ragnarok, and Runescape.
DAOs & the future
I don’t have a crystal ball. I don’t know what the future holds. But what I do know is for the first time in history, we have the technology and the societal momentum to cooperate en masse, across geographies, language, timezones, and cultures. The biggest bets we can make isn’t just on technology, but in how our natural inclination to cooperate drives technological innovation.
“Some still refuse to take seriously the fact that cooperative principles, gaming guilds, and odd imaginaries like DAOs present an emergent organizational form with legitimate political relevance. DAOs could out-compete by out-cooperating the modern firm.”
I recommend following this essay up with a read (or reread) of Yuvul Noah Harari’s Sapiens to understand how narratives drive web3 collaboration. I also recommend Nick Szabo’s essay on “Money, Blockchains, and Social Scalability”.