The Future of DAOs

Builders first tokens last, Powered by LLMs and SBTs, Task based micro ephemeral

DAOs of today are bloated, stuck in governance and overwhelmed with internet scale human coordination. The token drop approach to DAO formation has set DAOs on the wrong track. Inviting thousands of strangers to govern who have no insights or time is a recipe for bad governance.

DAOs today play a role of fund allocators as they start with a treasury first approach. Drop a token, seed the treasury and invite strangers to vote on proposals on how to disburse the funds.

That’s the most popular DAO use case we’ve seen till date. And the entire DAO tooling ecosystem is built around this functionality - creating proposals, decentralized voting infrastructure, governance frameworks, tokenomics.

DAOs of today are fund allocators not builders.

DAOs of tomorrow will be builders

DAOs won’t start with a treasury or a token but with like minded people who share the same excitement and skills needed to build something people need. DAOs of tomorrow will be small, highly aligned and efficient. They’ll build in public with a community first approach but without the complexity of tokenomics needed to seed an artificial community. The DAOs of the future will have a community, made of builders and users, a more organic and natural community that does not need token incentives. And their treasury will be a by-product of their creation. Additionally I predict the growth of a new class of DAOs, task based DAOs that are small and ephemeral. Task done, DAO done - a totally new approach unlike today’s DAOs. 

DAOs of tomorrow will have SBT governance

The SBT first approach to DAO governance is aligned with builder DAOs. SBTs (soulbound tokens) are non transferable, non tradeable tokens that can only be earned via contribution to the DAO. It allows for people with real skin in the game to govern rather than people who’ve just come around for a token as we see with DAOs today. 

I imagine in the future DAO members will vote to decide who the SBTs should be awarded to, decentralizing their governance slowly with the members that bring real value to the DAO. Everyone is invited to lurk in the Discord’s but only SBTs unlock access to higher levels and responsibilities.

SBT, a permanent record of contribution (proof of work) on the blockchain, will enable contributors to unlock social and economic opportunities not just within the DAO but also elsewhere. It’ll allow for platform-less reputation - contributors can carry their identity from one platform to another, their badge serving as credential to unlock new work. Think of it as an on-chain resume. 

A good example of an SBT run DAO is Superteam DAO. India’s homegrown Superteam DAO has no treasury and gaining experience points via work outcome is the only way to get membership into the DAO. The DAO membership is restricted to 150 members - the ones that have gained entry but are not consistently adding value are purged to make room for the new capable DAO members. 

DAOs of tomorrow will run on AI

Today DAOs are crippled with bureaucracy and mundane overly repetitive tasks. From onboarding to governance and knowledge management, DAOs are overwhelmed. As DAOs are built in public and everyone and anyone is invited at any stage of the project, DAOs have to indulge in tons of repetitive tasks with every new member coming in. 

On the governance side, members are required to read and evaluate proposals. Or figure out who the right stewards are for vote delegation causing a huge cognitive drain on individuals participating part time in a DAO. 

In the future, LLMs will take on all the boring, repetitive tasks of the DAO - freeing up the humans to accomplish the real mission.

• Onboarding new members

• Documentation and helping members navigate where is what

• Listening to meetings, creating tasks, allocating points/bounties

• Designing incentives and governance structures

• Suggest proposals to vote on based on personal preferences

• Acting as a delegate voter - having full information on the subject matter to be voted upon and casting an objective vote unlike human delegates that can be influenced or biased to vote a certain way. 

In the future, I imagine LLMs will be able to plan and execute DAO strategy with reasoning and function calling without human involvement. For instance an LLM can launch a DAO using the Aragon API, evaluate proposals based on its built in criteria, dispense funds, evaluate and assign work and finally close the DAO when the success criteria is reached.

I’m currently tuning an open source LLM on DAO content, proposals and other data to unlock all kinds of LLM powered DAO tools like automatic proposal selection, governance, education and a lot more.

Nani AI, a legal chatbot trained by LexDAO (DAO of legal engineers) can answer legal questions related to Web3 and DAOs. No more searching for a legal consultant, privately chat with Nani DAO and get all your crypto legal questions answered.

DAOs of today are over focused on crypto projects, I expect with some of the future trends I’ve highlighted here other tech builders for example teams training LLM models, bio hackers, open source software teams, urban farming collectives, nomad builder communities and others will also adopt the DAO construct for their organization.

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If you’re a builder DAO, I’d love to hear from you. Feel free to reach out here or on Twitter.