What Insights Can DAOs Gain from the World of Partisan Politics?

Borrowing a page from the political playbook has the potential to guide decentralized autonomous organizations, or DAOs, towards striking a harmonious balance between efficiency and decentralization. Specifically, DAOs can draw valuable lessons from the methods political parties employ to select representatives, execute campaigns, and pursue enduring objectives, all while maintaining steadfast backing from a community that may not always share unanimous alignment.

While this might appear paradoxical, considering that DAOs are envisioned as innovative approaches to organizational development, one might question the wisdom of borrowing from political processes, which are often criticized for their inefficiency?

While DAOs present notable advantages compared to conventional organizations, the majority of them are grappling with persistent challenges, chiefly centered around the pursuit of operational efficiency and consensus-building within their communities. These hurdles frequently stem from inadequacies in governance frameworks and suboptimal communication practices.

Danny Chong is the co-founder of Tranchess, a decentralized yield-enhancing asset tracker.

In particular, the majority of token holders currently have the ability to initiate proposals. While this approach may facilitate a form of direct democracy (or what some might even label as "decentralized" governance), it also tends to be associated with inefficiencies. When everyone has the freedom to put forward any idea, it often leads to a dispersion of long-term objectives.

Furthermore, DAOs have grappled with persistent communication issues. Subpar communication frequently leads to negative reactions, impedes the timely determination and implementation of crucial roadmap checkpoints, and underscores a dearth of authentic consensus within the community.

These challenges are evidently community-related rather than stemming from the code underpinning a DAO. That's why they could potentially be tackled by examining certain foundational practices of political parties.

Lack of expertise and foresight

As previously noted, granting proposal-making privileges to all token holders disperses the organization's objectives and frequently engenders a clash between the immediate concerns of token holders and the project's overarching long-term objectives. This predicament manifests in various forms and magnitudes.

To begin with, this situation can lead to an overwhelming number of proposals. When a deluge of proposals ensues, a significant portion of them may lack quality or be submitted by individuals who are not grounded in reality, thereby creating challenges for the DAO in terms of prioritizing critical matters and making timely decisions. Furthermore, this predicament can be exacerbated by ineffective filtration systems, resulting in numerous proposals being either overlooked or entirely missed.

Another issue arises from the varying levels of expertise among token holders. Not all token holders possess a uniform depth of knowledge in the pertinent domains related to the DAO. Consequently, proposals frequently lack thorough consideration and may not align with the optimal interests of the DAO.

Finally, a reduced participation in voting among token holders may enable proposals to gain approval from relatively small factions, resulting in decisions that do not accurately reflect the majority perspective of the DAO and its planned trajectory.

Formalizing goals and plans

Political parties select representatives responsible for formulating legislation on behalf of their constituencies. These representatives are elected by the populace and can be replaced if they no longer accurately represent the wishes of the people. This framework fosters the development of policies designed to serve the greater good of the electorate.

DAOs should operate in a similar fashion, wherein the community engages in a voting process to select individuals tasked with formulating proposals that shape the future of the projects. These elected individuals should possess a proven history of active participation within the DAO and should clearly align with the project's objectives.

If protocol politicians were to become unaligned, the community would have the option to elect alternative representatives. Such a system would additionally serve as a deterrent against individuals with malicious intent seizing control and causing disruptions. It could even reduce the instances of individuals leaving DAOs in frustration.

Campaign for DAO policies

The recent uproar that ensued after Arbitrum's inaugural DAO vote underscored the critical need for transparently informing the community about forthcoming initiatives. Patrick McCorry of the Arbitrum Foundation acknowledged that the problem stemmed from a “shortfalling in communication.”

If there had been greater transparency and a more extensive "engagement effort" leading up to the Arbitrum vote, it's conceivable that the community might not have reacted with as much outrage.

Political parties and candidates conduct comprehensive campaigns to promote their proposed policies in advance of elections. These campaigns serve to educate voters about the candidates' stances on various issues and their vision for the future. Similarly, DAOs should undergo a comparable period of communication to ensure that the community is well-informed about the proposals they will ultimately vote on.

In order to make informed decisions, it is crucial for political parties to conduct comprehensive research to grasp the concerns and aspirations of both their constituents within DAOs and the wider public. This research should delve into demographics, preferences, and prioritize policies to effectively shape their decision-making processes.

While this cannot be universally applied due to the product development-centric nature of the cryptocurrency industry, gaining a deeper insight into the intended audience and their concerns can significantly influence the effectiveness of proposals.

Message framing is meticulously crafted through the incorporation of compelling narratives and real-life case studies to render policies more relatable and influential. Rather than solely emphasizing the pragmatic facets of a proposal, DAOs can enhance their plans' contextualization by weaving them into stories and concrete instances that strike a chord with individuals.

Ultimately, political parties prioritize grassroots involvement as a paramount strategy. The substantial significance lies in the coordination and activation of endeavors right at the community level. Empowering local networks composed of volunteers and influential community figures enables them to effectively communicate within their spheres of influence, whether through direct interaction, door-to-door campaigning, town hall gatherings, or local events.

For DAOs looking to engage with grassroots mobilization, they can achieve this by conducting Ask Me Anything (AMA) sessions featuring community managers and implementing a dynamic rotation system for these managers.

The dark side to politics

DAOs should avoid attempting to mimic the operational procedures of political parties entirely. Specifically, the practice of electing individuals to authoritative roles and restricting policy-setting access has the potential to undermine the integrity of even the most community-oriented initiatives.

To counteract centralization, it will be essential to regularly evaluate leadership positions and implement term limits. Similar to democratic systems, within DAOs, members should periodically cast votes for alternative representatives, thus promoting decentralization and fostering a broader spectrum of ideas.

Another concern regarding political parties is that constituents can be swayed by their personal biases, preferences, and potentially deceptive charismatic figures. Hence, the selection of DAO leaders should avoid turning into a popularity contest. Emphasizing a candidate's policies will guarantee that decisions are made in the best interests of the entire DAO community.

Improving politics

Furthermore, DAOs have already demonstrated their effectiveness surpassing that of political parties in numerous aspects. To illustrate, DAO decisions are transparently documented on public blockchains, allowing for full visibility into the direction the organization is taking, whereas political parties frequently conduct their operations in a clandestine manner.

DAOs, inherently decentralized and devoid of geographical constraints, offer a unique advantage in our ever-globalizing world. This openness enables individuals from around the world to participate, fostering the ability for organizations to draw the most talented individuals and genuinely reflect a spectrum of diverse perspectives.

Lastly, DAOs have the potential to exhibit greater agility compared to conventional organizations, which frequently find themselves hindered by protracted bureaucratic procedures.

What Insights Can DAOs Gain from the World of Partisan Politics?

Decentralized autonomous organizations have the potential to become highly effective and transparent global entities capable of performing a wide range of functions. Danny Chong elaborates on how they might redefine the role of political parties.