The DAO ecosystem is a cornucopia of innovation that is still nascent but burgeoning exponentially: in scale, complexity, and scope. Before the advent of configurable and no-code DAO tools in 2018, there were a scant number of DAOs-around a few dozen. As of today, there are more than 2000 DAOs with a sizeable treasury.
A fundamental pillar of Web3, DAOs have the potential to upend the very first principles upon which we build the organizational frameworks that accomplish humanity’s most complex and ambitious endeavours.
In this report, we shall elucidate upon fundamental principles about DAOs, including the basics on what a DAO is, what one’s salient characteristics are, and how and why the ecosystem has seen a Cambrian explosion over the last few years. In addition to discussing challenges for the broader ecosystem, we also glean novel and tangible economic value propositions that DAOs provide from their first principle characteristics, aspects often overlooked in the space. Finally, we end the section with a conversation with EarthFund DAO, a DAO working on utilizing Web3 to help environmental ventures across the world.
If you are acquainted with the fundamental factors in the space, we recommend that you skip to the section on governance. In this section, we discuss governance from a first principles perspective, anchoring our discussion of the steps required to grow the ecosystem within a macro historical and socio-economic context. We then discuss specific means through which governance is undertaken in the ecosystem, a facet of DAOs that enables a sandbox for socio-political experimentation. We also posit theoretical frameworks to solve some of the most foundational issues that need to be addressed for the ecosystem to reach its potential in the years to come.
Finally, we delineate a case study on Proof Of Humanity, an organization that is imperative to solving Sybil attacks, a point of weakness which undermines the very purpose of DAOs as a whole.
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