The Birth and Operation of DAO

The following is the full review of this AMA

The following is the full review of this AMA

Please briefly introduce the reason and process of the birth of DAOStep, your understanding of "increasing the bandwidth of the self-organizing network", and analyze the specifics of "the uncertainty of the next step of the blockchain"?

This is what we said in the launch statement: If the entire industry time is also measured by "blocks", then so far, we have only dug up two in total. It is said that the new block that can bring the next wave of increment "Blocks" are long overdue. (By Aero)

This is also our original intention of launching DAOstep, hoping to gather a group of research and practice partners who focus on the most essential technology and governance of the blockchain in the noisy industry, and work together to mine the third block of the industry.

For the uncertainty in the third block, we focus on the governance and underlying technology of the self-organizing collaborative network built on the blockchain, as well as the assets grown on this basis. Therefore, we have previously studied the growth mode and governance principles of self-organization in a broad sense, the self-organization mode and practical feedback of the blockchain community, different voting mechanisms and the game mechanisms and algorithms involved, etc., and will continue in this direction Exploration, interested students are welcome to pay attention to DAOstep.

Paying attention to these issues can help us broaden the "bandwidth" of information transmission in the collaborative network, reduce the cost of recording, verification and transmission of "true" information in collaboration, and promote mutual trust among people with limited knowledge of trust and information. Promote larger-scale distributed collaboration at a lower cost.

Can you tell us what is DAO? Can you share some typical DAO cases?

We have discussed this issue many times in previous offline activities. A more interesting phenomenon is that everyone seems to have their own definition of "DAO". What is "DAO".

In my opinion, DAO = Programmable Organization, which is a collection of collaboration and organizational contracts. Through the blockchain and smart contracts, the "discrete" contracts that were originally on paper and required third-party enforcement are programmed on the blockchain and turned into "continuous" contracts, thus evolving a new organizational form.

In the end, this organization is "relatively closed", with more concentrated "decision-making and resources", and a "partnership" organization with only a few people; It doesn't matter to me whether it is a legal person company with a "manager"; or an organization with a more decentralized decision-making and a more democratic way of making decisions. So in my opinion, DAO does not mean democracy. In fact, I am not a supporter of absolute democracy.

The specific form and rules of DAO are determined according to the evolution of each organization's nature and goals, but what they all have in common is that the management cost of the organization's "contract" is reduced, the organization's internal responsibilities and rights are more clearly assigned, and stakeholders join and withdraw from organizational collaboration Also more convenient.

ASResearch, where I am now a partner, is essentially a partnership research organization composed of several people. All our organization and benefit distribution principles are stipulated through smart contracts. Everyone's rights and interests distribution contract is established on the blockchain and distributed continuously according to the cycle. All decisions are also made through "multi-signature" rules agreed upon in the smart contract. Under this kind of organization, we don't need personnel and finance, and the management cost is greatly reduced. At the same time, on the premise of "partial consensus", everyone can match the degree of consensus, pay the corresponding cost and risk, and promote the development of the organization.

Other DAOs include dxdao and necdao, which run "decentralized exchanges", MolochDAO, MarketingDAO, etc., which aim to promote the ecological development of Ethereum. A number of projects, including the Ethereum Parity client, Kyber, Synthetix and other projects, have also announced that they will transition to DAO, so as to gradually organize and operate in the way of DAO.

What is the relationship between DAO and blockchain? What do you think of the role of corporate governance and DAO in property rights system and historical process?

The blockchain is the system that hosts and runs the set of contracts of the DAO.

Regarding property rights, I am not from a legal background, so my understanding of the property rights system is relatively limited.

From my personal experience, as we move from an industrial society to an information society, many means of production can no longer be defined in the form we previously understood, and the definition of its property rights will also be more difficult.

For example, user data, user attention, etc. The profit creation of many Internet companies actually comes from these "production materials", but who should own the property rights of these production materials? Under the original corporate framework with "clear boundaries", there may be many controversies.

However, this problem has not been well solved on the blockchain at this stage. A project that has done ICO, what kind of entity is it? What are the "assets" held in it? Who should own the "property rights" of these "assets"? Is it the foundation or all tokenholders? How should the disposal of these assets be decided? If it is misappropriated or abused, which legal provisions should be referred to for protection? These are still unanswered questions for me.

It can only be said that in the process of researching governance mechanisms and technologies, we are trying to find more and more essential theoretical basis, build more tools to explore ways to solve this problem, this should also be regarded as the "third block" One of uncertainty.

In some restructuring cases shared by DAOStep, what do you think is the core feature of communityization?

Regarding some cases discussed at the previous DAOStep gathering, because it involves other project communities, it is personally inconvenient for me to share and comment too much on behalf of the representative. But today I can talk to you about some experiments that DAOStep has done, including the DAOfest event we did some time ago, and the recently launched MediaDAO, InsightDAO, and HackthonDAO.

On the first day of these experiments, everyone discussed "organizational methods and principles". In layman's terms, it is who is responsible for what, what is the scope of responsibility of the person in charge, what incentives are there, how to make decisions for the organization, and how the organization obtains. How to distribute the benefits and so on. And these rules, when conditions permit, we will turn them into contracts that can be executed through smart contracts.

Take DAOfest as an example. DAOfest Shanghai is a relatively loose and "short-lived" community organization. It has existed for no more than 30 days. The core goal is to organize an offline DAO-themed sharing event. There are nearly 10 participants including DAOStep, and even the core participants include bitfwd, Fat Garage, Lianwen and HiBlock. The biggest difference between this activity and non-community-driven activities is that this is a Buddhist organization without a "person in charge".

I have also done many activities before. In my previous experience, every time I do an activity, I need a strong "engine" to organize and coordinate the execution and preparation of the entire activity. A lot of energy goes into pushing and organizing. But this DAOfest, we achieved:

fully distributed collaboration

The goal is aligned and everyone is very self-conscious and efficient (know what they should do at what time)

Feedbackinstant feedback

The beauty of this collaborative experience is that you don't have to push a lot. When an idea comes out, we quickly evaluate its feasibility and try it immediately. If it is feasible, we will immediately find a way to implement it. It is difficult to get feedback on unreliable ideas. Many idea debts are not allowed in efficient collaboration. In this process, the community becomes the "organizer" and "engine".

A major premise for this practice to be implemented is: assign responsibilities and rights well, and ensure that all collaboration processes are open and transparent.

In a simple activity, the allocation of responsibilities and rights may be a worksplit form and corresponding budget incentives. In a "community" organization with a larger scope and people's participation, a more complete governance mechanism that integrates collaboration rules and incentives is needed. Let each community member (token holder) be able and willing to participate in the ecology according to the rules. As for whether the relevant decision-making mechanism is democratic, centralized or representative, it depends on the preferences of each community. As long as the distribution of responsibilities and rights is reasonable and everyone cooperates in an open and transparent environment, it can ensure that those who make decisions will take corresponding responsibilities for their decisions, pay matching costs, and of course enjoy corresponding incentives.

What do you think about DeFi?

Defi is actually a marketing term for me. Before the term Defi appeared, the blockchain had brought many changes to the financial market, the earliest and most typical being Bitcoin.

More essentially, in fact, the germination of the demand for "Defi" even predates the emergence of the blockchain. As early as the beginning of the financial crisis in 2008, when the traditional capital and financial market model gradually declined, the demand for DeFi sprouted. In essence, it is brought about by the contradiction between the society's discrete demand for transactions and capital in space and the highly centralized business model of traditional capital markets and financial institutions after we gradually enter the information age.

But the emergence of Defi has made the application of this financial scenario more and more specific, and more ordinary people can participate in this use in daily usage.

Yesterday I was sharing a very interesting data with my friends in traditional finance. Now the demand theory of USD stable currency on some platforms can reach 6-8%. What is this concept? Let me show you some Chinese issuers overseas The yield on U.S. dollar bonds. Many Chinese-funded issuers rated in the B-BB range have a yield of US dollar bonds in the range of 5-8%, and most of these bonds have a duration of 2-3 years.

Although there is still a big difference in the size of the two markets, we can see that "credit" is priced in a new way through blockchain and Defi, and we can also see the rising trend of "distributed finance".

With the rise of distributed finance and a wider range of distributed commerce, the collaboration rules and governance issues of these organizations will become an unavoidable topic, which is also a topic that we will continue to study and practice.

What experience and insight did you have in the process of participating in the DAO? What difficulties and challenges have you encountered? What mechanisms are in place to facilitate the creation and ongoing operation of DAOs?

There are still many difficulties, including how to let everyone understand the organization and concept of DAO, how to cross the threshold of the blockchain itself to participate in collaboration, etc., how to let everyone get used to the rhythm of DAO collaboration, etc. From a certain point of view, the organization of DAO takes away the "certainty" that everyone is used to in daily work, although in my opinion, the certainty that we think exists in the collaboration under the company framework does not actually exist. But it does require a deep mindset shift and adjustment.

One of the most effective principles I think is to keep the collaboration process as open and transparent as possible, or as I said before, to ensure that collaboration information can be recorded and circulated at low cost.

Here is a recent paper that is being read. It analyzes from the perspective of game theory how to allow participants to choose "honesty" as the counterparty's "honesty" in continuous transactions in a distributed collaborative network. Its own Nash equilibrium strategy, so that the distributed trading network can benefit from the whole and flourish. And an important transaction that this game strategy can establish is that the information that needs to be traded is fully disseminated in the community.