This is a talk I presented at the SeeDAO Dubai conference. This study gives the mission of Web3 technologies for digital survival and from structure, action, and distribution level to do the comparative study on DAOs. Then it presents a classification system prototype based on political compass and shows a case study on DAO’s ability to handle conflicts during the Ukraine war.

Hi, Good afternoon. My topic is a comparative study on DAO, the decentralized autonomous organization. And I am 舟舟tovarishch.

Ok, this is the outline of my presentation. First, let’s talk about “What is DAO.” We’ll go through the spectrum and missions of some emerging technologies and give my definition of DAO. Then, I will conduct the comparative study from 3 levels and has an interdisciplinary view, which is separately relevant to the three letters of “D”, “A”, and “O”. After that, let’s try to present a classification system on DAO. Finally, based on one of my recent works, I will consider what the DAO can do. In each section, I will give a question but without answers. They are tricky questions, and I want us to consider them in the Web3 practice.

What is DAO - The spectrum and missions

So the first section, “What is DAO”. This figure shows the mindmap I made at the beginning of 2021 when I prepared for my master's final paper. I tried to sort out the possible social impacts of Metaverse and Web3 and the relationship between technologies and social changes. We can see, the Web3 we always talk about today is the left corner of the map, and there are wide potential impacts this tech can make on our society. After that, I thought Web3 and metaverse might be a new trend of globalization and a technology-driven opportunity for Kantian culture.

Let's look closely at these emerging techs. First, this spectrum shows our world from the real side to the digital side. For the entirely real physical world, the emerging tech is ESG related, such as carbon removal and offset. This is the environmental community. And the second is the digital serves the physical, such as digital twins, AR, and VR belonging to this immersive community. The third is digital impacts on the physical. These are AIGC and UGC techs. And in academics, we can call the crowd intelligence community. Then is digital with a closed-loop ecosystem. This is where we are, the Web3 community.

Each tech has its mission for social development. So, what is the Web3 community’s final mission? In my mind, the mission of our Web3 community is digital survival. As these figs show, the overlap area between Web3 and the immersive community is social immersion, which provides immersion by creating a parallel life rather than sensory immersion. And the overlap between Web3 and crowd intelligence is the creative economy. As the right fig shows, social immersion is relevant to the space issue. And the creative economy is relevant to action issues since, according to some financial theories, we can categorize our social actions into two parts: create value and transfer value. Hence, this is a human-centered view of treating these communities. And the people gathered by these technologies, establishing the DAO, is a new kind of relation of production.

The Comparative study

1 Structure Level

To gain a deeper understanding of the DAO, let’s do some comparative analysis. First, the structure level. As we know, the client and server model is very popular in the network today, which is similar to the hierarchical model in history. There has a king or server node to control the whole ecosystem. Well, we all know the cons of this model, such as single-point failure, waste of marginal resources, etc.

However, it’s hard to ignore the pros of this centralized model, such as the high capability of mobilization and efficiency. For instance, during the end of the Qing dynasty, Japan is a more centralized country than Qing’s cooperation with feudal landlords. Hence, even though decentralization is a so-called political correction for crypto natives, as the famous social scientist Max weber said, centralization is a rational tool, but not the goal. We should have a more rational view of the centralization and decentralization issues.

Then, let’s compare some P2P models in the network with our offline societies. The first is Napster. It still has a server, but only conducts queries. The resources are deposited in clients. This is similar to the dependent territories, which is many colonies’ situation after WW2. Then, the Kazaa model. There have some super nodes to store the resources list. The counterpart of Kazaa in the society is dominions and states, such as Illinois for the US. And finally, BitTorrent. This model is very similar to blockchain today but without tokens. I think there still has no suitable counterpart of BitTorrent in our society, maybe DAO is maybe not.

Therefore, the first question we need to consider is: Which kind of decentralized networks can DAO be structured on? Only the BitTorrent or Ethereum kind?

2 Action Level

Ok. The second comparison is at the action level. Let’s think about the word, autonomous. Indeed, there have many studies about autonomy. It’s one kind of collective action. According to Olson, one of the most influential institutional economists and political scientists, collective action is our limited rational choice. However, because we are not the god, we cannot be comprehensively rational, so this might be our best choice, no matter whether the choice is about the migration like birds or the crowd crush killing thousands and hundreds of people.

When considering the influential factors of collective action, political scientists think a suitable structure, not too closed or opened will be the best, and anthropologists argue a homogeneous culture is a requirement. In one of my recent works, we found for Web3 communities which were established around some NFT collections, the structure is very ordered and beautiful, which corresponds with the above theories.

However, we also found that these NFT communities fulfill with information manipulation. And their members are irrational during investments. It’s quite ironic.

So, the second question is Can collective actions within the DAO avoid crowd irrationality?

3 Distribution Level

Ok, let's talk about the value distribution level, or the word, organization. This slide shows the first lawsuit against a DAO since it plays the role of an LLC, but the US government thought of DAO as a UAN in the past year.

Indeed, how to put the DAO in the legal system still is unclear. According to the US policy, there mainly have three acts for DAOs to choose from. First is Wyoming’s plan, which considers DAO as LLC, and you can register a DAO even without a smart contract. But in this way, your DAO will be heavily controlled by the government. The second is Delaware’s plan. It helps DAO to be governed by tokenholders legally, but still be considered as an LLC. And the last is Utah’s plan. This act is the first to give a DAO legal position and specific taxation policies. But it requires the DAO to reveal core members' individual information. Emmmm. In my view, I don’t think they are good enough for DAOs.

Then, let’s think about how to treat the token. The first is the most native way, tokenization. This way is the most flexible, but has minimal regulation and protection. The second is securitization. In this way, tokens represent the ownership of DAO’s assets, and DAO should do some disclosures. Right now, US, UK, and HK governments choose this way. And the last one treat token as digital assets, this is represented by the China mainland, according to its recent policy.

So, the third question is, Is compliance with regulation driving backward?

A Classification system - De-society cube

After reviewing the three levels or the three words of DAO, at least we can say that DAO can have various forms. So, can we provide a classification system for DAO? I try to introduce the political compass to create the system. For political compass, it has two axes, and is used to classify the political attitudes of individuals and authorities. In the network society today, we can think about the X axis as the authority, whether an organization is centralized or decentralized. This is based on the smart contract, and impacts people’s collaboration. From a high level, it is related to cybernetics. And the Z axis is about information or value distribution. This is based on new network technologies. And belonging to information theory. Then we add the Z axis, which involves interactions and is related to system theory. So we can have this cubed classification system. On the front side, it's the political compass. And we can see that liberalism is more distributed in value and information than socialism. When the system has more and more internal interactions, we will come to the back side of the cube, which is the region of DAOs. As we discussed above, DAOs will be distributed on the back side, some might be more centralized, and others might be more distributed. Both DAOs form the de-society. The cubed system is a very preliminary idea, and I will polish it in the future.

What is the DAO can do - A case study during the Ukraine war

So, finally, let’s talk about what is the DAO can do? When considering this issue, many people think that DAO might not be efficient. Well, what is the definition of efficiency? Making money very quickly? Completing tasks very fast?

These are some traditional ideas. But, according to Barnard, the father of modern organization theories, there have two necessaries for an organization’s existence: Effectiveness and efficiency. For effectiveness, it is more similar to what we think about efficiency. But efficiency in his theories is how the organization satisfies members' motives. From a wide view, we can say how to increase the social good and public goods for society.

According to my recent work, I think DAO might be able in this area. In this work, my professor Cai Wei and I studied two autonomous organizations, Aave DAO, and GitHub project communities, during the Russia-Ukraine war. We studied how these two organizations handled conflicts caused by the war. This work was accepted by IEEE TCSS, which is an SCI Q1 journal in social computing and human factors.

After the eruption, both communities had a hot discussion about the war. In Github, someone proposed to cut off users’ access from Russia, and in aave, someone wanted to donate Ukraine from the AAVE treasury. In GitHub, its staff closed all these discussions and Aave conducted through on-chain voting. By NLP analysis, we found that DAO is better than CAO at handling conflicts, due to its decentralized model. Because the initial task conflict did not transfer into emotional, progress, and value conflicts. And blockchain technologies played critical roles. Therefore, as an innovative organizational form, DAO might not be efficient traditionally but can be efficient for the social good, especially in today's uncertainty.

Finally, let's look at the takeaways. What is a DAO: new kind of relations of production, and according to our comparative study, there can be various kinds of DAOs. Then we introduced a three-dimensional classification system of DAOs. Finally, based on a case study, DAO might be better for handling conflicts, which is important for the moment.