DAOs, You and the New Work Order

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No boss, work from home, no job interviews, and fair pay. This is the future of work, according to some, and all because of technology referred to as decentralized autonomous organizations, or DAOs. Sounds great! Sign me up.

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DAOs are part of Web3, that opaque suite of technologies for a decentralized internet that excites a few and bores many.

Let’s just say that DAOs could be the way work is structured and renumerated in the future, so it’s worth finding out little more. Especially when the gotcha with a DAO in the workplace is that you will love it!

Let’s see. Leaning into strategy consultant Adrien Book‘s article for European job platform Honeypot, here’s the A-Z of the DAO.

What is a DAO?

Book rightly points out that the tech community has a habit of making simple concepts difficult. This needn’t be the case. In short, DAOs are how humans come together as a group to make decisions in the digital world. They do so with the help of two key tools.

Firstly, the rules that govern the organization are expressed as a series of digital “if/then” statements that are then coded directly into a blockchain, thus rendering them both auditable and permanent.

Secondly, voting shares are issued to stakeholders in the form of “digital governance tokens” — also recorded on a blockchain.

Doing things this way replaces, in theory, both the legal mumbo-jumbo of today’s organizations (because many rules are coded) and their hierarchical nature (as everyone has a voice).

Okay let’s continue. What does a DAO structured organization mean for me, the worker?

 

No More Interviews

Most DAOs are “permissionless,” writes Book. Meaning: anyone can work on them since the DAO’s code, smart contracts, and lists of contributors are transparently accessible to all.

“This means that these new digital organizations have no recruitment process. You come in and start working on anything that you can do and that needs done. No more CVs, no more cover letters: the bottoms up model and opt-in membership of DAOs invert the talent sourcing model.”

In theory, this aids a true meritocracy and should erase subconscious racism and sexism in the workplace. We’ll see.

Work for as Many Different Companies as You Want

Being able to work for permissionless organizations means that contributors can work for one, two, or twelve DAOs. The sky is the limit.

“The lack of exclusive relationship can be daunting for some, but is something many technological workers are thriving for. After all, corporations can discard us as they see fit. Why should we not be able to do the same?”

Think of it as working on a movie, as Book uses as an example. Directors, producers, actors, production assistants, art directors, prop makers, camera operators and sound engineers come together for a project. Once the project is done, they part ways and go work on multiple different films. In DAOs, the same can be said of developers, community managers, accountants, consultants, and more. And since DAOs are often story-driven, this comparison is particularly relevant.

A Fairer Way of Getting Paid

Working without being asked to sounds swell, but discerning adults will wonder how one gets paid in such a system. Indeed, most contributors will expect a reward for their work.

Because contributors don’t have a contract, there are no classical ways of deciding what everyone should fairly get. Instead, many DAOs create “circles” of contributors (the equivalent of teams). Each member of the circle is given points and allocates them to other members of the circle over a certain period. The higher the perceived “value” of the work done during that period, the higher the number of points received, and the higher the financial reward.

This is particularly interesting for a variety of reasons, finds Book. For starters, it helps us experiment with a new definition of value within an online community. It also incentivizes workers to work towards the mission set out by DAO creators.

“Since rewards will often take the form of governance tokens, contributors will keep a stake in the organization’s well-being even after they’ve left it. Finally, it also does away with free riders that have become prevalent in large companies’ middle management.”

A New Way of Making Decisions

Since DAO contributors are often rewarded with governance tokens, these can be traded and used as ballots to make decisions within the organization. In this system, one token is equal to one vote. Unlike classical corporations, everyone has a vote proportional to their stake in the project. Contributors are thus incentivized to act as fiduciaries.

Many DAO creators are well aware that voting, done wrong, can be a form of tyranny. Cook prefers the principles of Sociocracy. In such a system, decisions are made through consent from all stakeholders, which are organized in semi-autonomous circles. This way, one team doesn’t influence the decisions of another.

The Renewed Importance of Community Values

DAOs are often touted at the future of all corporations, but Book believes it best to dream smaller. Take fandoms as an example. Today, many struggle to survive and thrive under the boot of algorithms promoting virality at any cost. But having stakeholders become customers, owners and contributors will provide a lifeline to these online communities, as the greatest ones (the most passionate) will be able to attract more people in a virtuous circle. This means people creating great niche communities can now survive and make their project evolve with their community.

It also means, he says that “people will be able to make a living(ish), while working on things they are passionate about.”

A Global, Asynchronous Way of Working

DAOs are remote by their very nature. Anyone with an internet connection can access and work on them. While the gig economy today is hyper-local, we’re now seeing it become global.

“By being fully global and remote, digital organizations allow people from all over the world to participate. Globalization led to blue-collar workers in Western countries having to fight for their survival. DAOs may very well impact white-collar workers in the same way. By being asynchronous, they will also (finally) put an end to the traditional 9-to-5.”

 

No Boss, Fewer Colleagues, More Trust

DAOs may be transparent, but they are also, counterintuitively, anonymous. This anonymity means that workers will no longer have colleagues per say. This is both a challenge and an opportunity.

“For a while, the workplace became the place one could socialize in. Now that it is disappearing, the lack of physical community and identity is worrying. This is however an opportunity for organizations to be much more active and deliberate when it comes to team-building. The fate of the DAO may very well depend on it.”

It’s one thing not to know your colleagues, it’s another not to have a boss, as you can often work on whatever you like in a DAO.

“One of the greatest shifts in this new future of work is the increased importance of self-management. This will be uncomfortable for many, but will undoubtedly lead to strong personal growth.”

The use of blockchains and smart contracts means all decisions and actions can be audited, something few workers today are privy to in large organizations.

But linking a crypto wallet to a DAO means that anyone and everyone can see every transaction made with that wallet. That’s fine if the person is anonymous, but not everyone will want to be.

Book suggests that in the new work order creating trust between compadres will come into play.

“DAOs are for communities to come together. A certain level of trust is necessary between members to make it work, and people like to attach their selves to what they like; not their avatar.”