Today’s DAOs are limited to use cases like investment, social utility, and non-profit work where either fewer members or less coordination are needed. There’s significant excitement about adapting DAOs for work, but a lot still to be figured out. Instead of proposing incremental adjustments, what if we worked backwards from a model that is proven to work, a typical small startup, and see what modifications are needed?
For whatever changes proposed, we’d like to preserve the fundamental “essence” of DAOs. DAOs are described as having “loose” associations, transparent operations, open membership, global reach, and finally grassroots rather than hierarchical organization1. As you could argue that global membership and transparent operations aren’t necessarily out of reach for typical remote-first or distributed startups, openness and grassroots organizations deserve more focus.
Making a startup “grassroots” is challenging, since most are run with formal, top-down hierarchy. Instead of naively implementing an org chart, perhaps we can add a different form of structure. The concepts of “pods”2 or “metaDAOs”3 seem a natural fit - with their “divide and conquer” approach, smaller decisions can be assigned to subsets of the organization, while fewer decisions are required to be run by everyone. More gets decided more quickly, and the typical DAO member needs to vote a lot less, theoretically. As specific implementation details for what we’ll call “pods” are still being worked out, one specific version is outlined below.
Pods should be created by a DAO-wide vote. Once created any member of the general DAO can join as many pods as they want. These units don’t have a “leader”, but rather have a “voting coordinator” who accepts proposals for the pod to vote on, distributes information relevant to the vote, and tallies results. The “voting coordinator” is a rotating job with term limits, so that all members have the chance to serve. Many small day-to-day decisions won’t need to be voted on at all hopefully, but to initiate a needed vote, a few people must “sponsor” a voting topic, with the number dependent on the size of the pod (e.g. 2 people for a 8 person pod). To encourage voter participation, we could a wrinkle where anyone who doesn’t vote in a few consecutive votes loses their seat in the pod and must rejoin to participate again (although they would be able to do this instantly). This behavior would help pods to stay lean and productive, while encouraging active participation. Most votes should happen at the pod level, but some things like budgets and hiring plans may always need DAO-wide approval.
The relationship between DAOs and pods can be fairly flexible, but it could make sense to create a “governing pod” composed of coordinators from the pods, who serve as temporary “pod representatives” to mediate any disputes that happen between pods. While this would be a bit less decentralized, note that coordinators are appointed on a rotating basis and should also be removable if issues come up.
Ideally this structure would prevent smaller issues from needing a DAO-wide vote, but to prevent collusion we could also add a feature that any single coordinator on the governing pod can trigger a DAO-wide vote if needed. If even more structure is needed, we could also extend in the other direction to allow for “nested” pods, so that the lowest level “operational” pods can always be kept at a minimal size (e.g. <10 people).
One challenge not yet tackled is how to provide long-term stability given the rotating nature of both pod coordinators and the governing pod itself. For longer term guidance or short-term decisions which are more contentious, we can propose two concepts - a “constitution” and a “directive” respectively. Both can be implemented similarly with a ⅔ majority and a certain minimum quorum (e.g. 5% of overall DAO participates in voting). Once passed they are meant to be “binding” in that they set direction for the DAO, until they are repealed which would again require a ⅔ majority and quorum.
While this proposal certainly isn’t perfect, it aims to preserve the “grassroots” nature of DAOs in the sense that every user could participate in DAO decisions either directly (e.g. DAO-wide and pod-wide votes) or indirectly (via coordinators), without relying on hierarchy or creating positions holding centralized power. It also hopefully shouldn’t impact “openness” since members are still free to join/leave the overall DAO as well as individual pods as they please.