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This is a guest post featuring Federico Daffina Minicucci, student at NYU Stern School of Business studying Computer Science and Finance.
Special thanks to @tmt_xyz, @CDTEliot, @Kristofer (Glasstempo.eth), @rafathebuilder for their comments and feedback. Follow me on Twitter or subscribe to Discovering the Future to join me on my journey getting deep into the weeds of all things crypto.
One of the first blockchain trends to gain momentum was the concept of Decentralized Autonomous Organizations (DAOs). Vitalik Buterin first wrote about them in 2014, before Ethereum’s launch in 2015. After a quiet five years since the DAO hack, DAOs are back in the spotlight, partly thanks to the development of blockchain infrastructure and the growth of DeFi and NFTs.
Today, according to analytics tool Deep DAO, there are over 100 DAOs with a total of ∼715k members managing ∼$9B in assets, and growing rapidly. Spinning up new DAOs is becoming increasingly easy, especially after the emergence of tools such as Gnosis Safe and Discord, which — when combined — allow anyone in the world to create a community with shared ownership of capital (e.g. a treasury) that collectively and trustlessly decides on where to allocate it.
However, there are still many challenges facing DAOs that must be solved to form resilient communities. As DAOs get larger and more decentralized over time, it becomes much harder to organize teamwork effectively, track accountability, measure contributions, and maintain the same dedication and drive from participants.
After outlining the current DAO tooling landscape, I will analyze some of the most important issues with DAO management and share my thoughts on the future. I’ll also explain why the most effective tooling will be built to enhance community interactions, coordination, and connections — thus prioritizing social cohesion.
Traditional organizations use bank accounts to manage funds and numerous enterprise software solutions to coordinate effectively (e.g. Slack, Zoom, Google Docs, Asana, DocuSign). Similarly, various tools have emerged to tackle different aspects of DAO management and ensure well-functioning communities.
The following are some DAO tools I’ve come across through my personal experience and research: