• by William Mougayar
    Venture advisor, 4x entrepreneur, marketer & strategist. I live in Toronto, curate a lot, blog a bit, and help startups.

DAO’s: Automating Governance or Operations?

Yesterday, I participated via video link in a meetup that was held in Barcelona, on the subject of Blockchain Backed Governance Systems, and was invited by Carlos Barbero Steinbock, co-founder and CEO of BTC-Guardian. The program included other speakers from DASH, Bitsquare, a lawyer (Adam Vaziri) and an impromptu appearance by a Slock.it co-founder, who originally brought us The DAO.

The video replay of the meetup is available here, and I kicked off the event, with a talk entitled Success factors in Distributed Organizations Models.

Here’s where a video link where my talk starts:

And here are the Slides from that talk.

I ended my talk with this single slide, emphasizing that the “Autonomous” part of DAO’s is what scares me the most. While it is a critical element, it should not be taken lightly.

Screen Shot 2016-11-26 at 1.33.21 PM

In hindsight, it was that Autonomous part that took down “The DAO” last June. Too much autonomy was entrusted into fledgeling smart contracts, and the process took a turn that was humanly unstoppable (except via a hardfork which is a non-natural blockchain act that happens on an exception basis).

Autonomy seems to be a stubborn goal of DAO’s, as zealous engineers want to give power to their smart contracts, just because money, business rules, responsibilities and decision-making can now be programmed all together in a big mashup.

But I want to caution that Autonomy comes in different flavors, mainly separated into two aspects:

  1. Autonomous Governance

  2. Autonomous Operations


Autonomous Governance pertains to how the consensus politics or mechanics of a given blockchain are evolved and managed. And it also pertains to the scope you give for such governance in terms of the resulting actions.

Autonomous Operations might be easier to achieve initially, and it relates to automating via the blockchain some aspect of existing operations, via collaborative decision-making for example. To uncover use cases for this segment, think of the decisions that you currently make that require voting or participative voices from within your organization. You can integrate the recording and enactment of these actions with blockchain-based workflow capabilities.

Regardless of the flavor of autonomy that you’re thinking about injecting into your DAO or even ICO’s, you need to think about the scope of impact for the resulting actions, and more specifically endeavour to simulate how this autonomy might work by running in parallel a non-automated version first.