DAOmocracy
A case for decision-making by random delegation
“The fairest rules are those to which everyone would agree if they did not know how much power they would have.”
My Story
I first learned about Decentralized Autonomous Organizations (DAOs) in a short podcast, and my reaction was omg I think this is everything. This led me to joining a DAO and recognizing many problems along with much potential in this new kind of entity. There’s a meme that DAO actually stands for Dudes Arguing Online. Indeed, female energy is rare, and forum threads often end in fruitless conflict. Although decentralized and autonomous are in the name, I witnessed a group with control of the treasury choose not to release funds for proposals that passed by community vote. Voting is often perceived as a way to decentralize, but I think it only works if the voters do. All proposals at that time were passing unanimously, suggesting groupthink. Given that and the number of voters being much higher than the number of engaged community members, I could understand why the controlling group thought they were making better decisions for the DAO. Perhaps they were.
I have oscillated between staying informed and disengagement. Because anyone in a DAO can post a proposal, there is lots to consider at any time. On things that don’t interest me, I feel torn between a sense of duty and meh. I know that every informed vote can help the DAO but that’s a big time and cognitive cost with little recognizable return. I want to be involved in DAO decision-making but not continuously because I have other very important things to be doing… like writing this blog ;)
My Belief
Decision-making by dictatorship is exclusive and biased.
Decision-making by democracy is overwhelming and uninformed.
Decision-making by elected representatives is exclusive and uninformed.
Decision-making by random representatives would be better.
My Argument
Better decision-making means better collective outcomes. Better collective outcomes, (if life satisfaction is our north star) include more productivity, social support, and freedom as well as less corruption. Dictatorships are efficient at best, but tyrannical at worst. Concentration of power is a prime environment for corruption and squelching individual freedoms. Even if the leader is benevolent, studies show that group decisions outperform individual decisions.
On the other end of the spectrum is democracy, which allows all people power in all decisions. Although this sounds ideal, such a system does not play out well. It is unlikely that all citizens could or would even care to make an informed decision on all governance matters, and it would be undesirable if they took the time to do so because that is more time debating with less time doing. The likely outcome is that some citizens will make informed decisions while most will either make uninformed decisions or not participate, which can be thought of as equally unhelpful behaviors.
Decision-making by elected representatives is more empowering than dictatorship and more manageable than democracy, but exclusivity and uninformed voting remain. Because this system rewards acquisition and maintenance of power, resources that could be used productively are spent on campaigning. In the United States House of Representatives, the candidate who spends the most money wins 90% of the time. Citizens elect representatives as proxies for all governance decisions, which introduces an unresolvable complexity. Thus, it makes sense for candidates to campaign by cognitive biases instead of important nuances and cater to those who enable their power instead of optimizing for the whole.
Sortition, a system of governance by random representatives, trusts that every individual can think critically and make decisions for the collective benefit. Better than dictatorship, it decentralizes and distributes power. Better than democracy, it rotates responsibility and rewards informed decision-making. Better than elected representation, it keeps decisions about issues rather than abstracting to personalities and applies anonymity to deter divisiveness. It allows everyone to share a perspective on every issue to help inform the decisions of the random representatives. The idea of sortition is not new, but its implementation is a new possibility because of blockchain technology.
My Hope
DAOs value empowerment, engagement, harmony, and automation. Decisions on proposals, grants, treasury transactions, contract fulfillment, and dispute resolution are made by randomly selected representatives. Dudes argue more effectively online.
I am working with a team to enable this decision-making by random representatives through a tool called DAOmocracy. A DAO can configure the platform for its use by setting rules and connecting its treasury, members, and engagement data. Rules include maximum treasury amount that can be requested, length of the discussion period, time for response before selecting a new representative, consensus percent for execution, and rewards for representatives.
Through DAOmocracy, any member can submit for a decision. He or she specifies the amount requested from the treasury and the automated actions to execute if approved. Upon submission, DAOmocracy opens an anonymous forum about the decision that all DAO members can post in. After the forum period ends, DAOmocracy prompts a sample of random representatives in the DAO to make the decision. The prompt includes a link to the forum plus explanations of the rules and conditional actions. The sample size depends on the DAO’s size and the amount requested. If a representative does not respond before the preset timeout, a new representative is prompted. DAOmocracy collects the votes and implements the decision if consensus is achieved.
Three kinds of rewards are available and more or less suitable to different applications of DAOmocracy. Participation rewards go to every representative who voted. These are most appropriate for gratuity and decisions that don’t impact collectively, such as dispute resolution. Consensus rewards go to the representatives who voted for the outcome. These are most appropriate for decisions that have evidence to consider, such as treasury transactions and contract fulfillment. Retroactive rewards entail a delayed follow-up vote about whether or not the original decision benefited the DAO. They go to the representatives who voted in line with the majority opinion of the follow-up and are most appropriate for speculative decisions, like community improvement proposals and grants.