The last few weeks have seen some major failures in the area of DAO and distributed governance. They’ve also marked a revival of energy for DAO technology, with new initiatives that seem to pick up where the failures left a gap.

Rising from the ashes…

Recent disappointments:

Presenting the revivals

  • HyphaDAO emergence on the Telos (EOSIO fork) network
  • Genesis DAO members take on continuing the experiment
  • Nectar DAO launch
  • dGov Council members revitalizing the organization

2020 starts with disappointments

Genesis DAO: vision mismatch

However, the demise of the DAO was inevitable from the beginning, as the Genesis community in general had major differences of opinion and objectives than those of DAOstack. It seemed the community never really accepted the status of Genesis Alpha as a sandbox, and there were dreams of being self-funded that simply didn’t align with the commercial goals of the DAO.

The mission of the Genesis DAO included support and promotion of DAOstack, but not all of the participants felt that DAOstack’s direction was aligned with their own concepts of what a DAO was about. While a few people (including myself) spoke openly about this misalignment, most of them kept their opinions to themselves, in the interest of improving their reputation (REP) and acquiring ongoing funding from DAOstack. In other words, the financial incentive caused people to withhold their true opinions and exploit the system.

DAOstack, for its part, put resources into the Genesis Alchemy project, but did not seem to take feedback well. I do not have any inside information about this, but honestly, why would DAOstack take these people’s opinions? Only 1 self-sustaining DAO (dOrg) emerged from a year’s work and something to the tune of $150,000 in budget.

Festivus for the rest of us

The great thing about community events is that they bring in more DAO participants. The problem with community events is that they bring in more DAO participants. These new participants want to fund… more events! In other words, event-creation has a snowball effect inside a DAO of generating voters who will channel more funds towards more events. In the case of the Genesis Alpha, these events quickly drained the budget. This is an important warning for anyone who wants to create a DAO. Most current DAO functionality does not include buckets for budgeting, so it’s important to recognize this potential pitfall.

Lack of functionality

Triumph and revival!

Again, I have no inside information but this seems a better direction for DAOstack than continuing to support the Genesis DAO. While I’m sad to see the end of the Genesis DAO community, this is a major step forward for DAOstack: moving from a sandbox to a beta user.

Community resilience: Genesis DAO and dGov

However, the community itself stepped up to the challenge. We created a weekly meeting (Wednesdays at 2 pm CET, in case you’re interested) to keep the conversation going, and to increase momentum. One of the participants said he would be creating another dGov Council meeting in Barcelona in the coming months.

Similarly, the Genesis DAO community is looking into self-funding and continuing the weekly meetings without the paid facilitators.

The community resilience is extremely encouraging. Despite a first round of difficulties, it’s clear that the vision of distributed governance

Nectar DAO: Large-scale DAO on DAOstack

NectarDAO’s core team has done a thorough job of researching DAOs and DAOstack, and developing best practices for the launch. Their website and blog provide fantastic guidance for the community. The initial work of the NectarDAO is of much higher quality than seen in previous DAOs. Proposals are more sophisticated, the mission is clearer and the participants are vetted. For the existing DAO tech, this launch represents a major step forward.

Hypha: The first DAO outside of Ethereum

Hypha takes a very different approach than other DAO technologies to date. The approach is specifically designed to support the people working in the SEEDS community, and in some ways their platform resembles a freelancing platform more than a governance platform. The focus of the platform is on defining the jobs that need to be done in the community, posting those jobs (roles) and accepting applicants for doing the work. Approval for funds happens after the person has performed the job.

HyphaDAO is in early alpha stages. To date, the work has been done mostly by volunteers. The quality of the team is outstanding, with the lead team members coming from the Digital Life Collective. The team has a strong bias for rewarding everyone for time contributed. I recently was awarded SEEDS tokens for a few hours I had spent advising the team. (A similar bias exists in the Commons Stack community. Suddenly you find yourself “praised” just for being a decent human being.)

In any case, it’s certainly exiting to see DAO tech develop beyond Ethereum and onto other smartcontract blockchains.


Founder, and Author: "So you've got a DAO: Leadership for the 21st century"