DAOs Are Not the Next Home for Online Extremism

Wired published an article alleging that DAOs are potentially the next major hub for coordinated extremism online. It says:

"The year 2024 might be the one in which neo-Nazis, jihadists, and conspiracy theorists turn their utopian visions of creating their own self-governed states into reality—not offline, but in the form of Decentralized Autonomous Organizations (DAOs)."

The author of the article, Julia Ebner, is an academic extremism researcher who writes books on European political movements and has apparently “infiltrated” (read: “attend publicly advertised meetups and Discord audio chats”) of a few of them. These include very controversial, and very public, organizations like Les Identitaires and Reconquista Germanica.

Academic research of extremist groups of this kind is comparatively straightforward because, for the most part, participants of such groups are a bunch of LARPing dorks who post edgy content for public consumption with no opsec. An indication that an “extremist” group is possibly not as serious an enterprise as, say, Hamas or Hezbollah is where the servers the group utilizes are based in the United States. In these cases, the FBI can get a grand jury subpoena doxxing a user of those servers in the space of an afternoon, if they even need one at all (many companies will render voluntary disclosure of these records in emergency situations posing a threat to life).

Reconquista Germanica would have been particularly vulnerable to this attack vector as the organization ran itself from a Discord group, and Discord, Inc. is a San Francisco-headquartered social media company whose eponymous application displays all user communications in the clear (i.e. unencrypted), and thus these communications are freely disclosable to law enforcement, and often are disclosed. DAOs too, overwhelmingly use Discord for community management and outreach, including the allegedly right-coded “Redacted Club DAO” named in the Wired article.

I should be more impressed with Ebner’s assertions about DAOs if she had (1) mentioned a “DAO” other than ones which publicly advertise their Discord presence on Twitter, another U.S.-based platform. More impressive still would be (2) evidence, any evidence whatsoever, that any of the DAOs mentioned in the article employed cryptoprotocols, instead of Discord, to communicate. Most impressive would be (3) direct evidence that DAOs in particular were contemplated or being used effectively for nefarious purposes by such organizations. An example of a group that meets two of these three criteria would be the Taliban, which (1) doesn’t use Discord and (2) is known to use cryptoprotocols, mainly WhatsApp, to coordinate their lightning strikes against Kabul and other major Afghan cities during the U.S. withdrawal of that country. As to (3), to my knowledge, the Taliban, which enjoys total autonomy within the sovereign borders of Afghanistan and presumably is free to use any software tool it wants, does not use DAOs.

Ebner, writing in Wired, continues:

"What are the stakes if trolling armies start cooperating via DAOs to launch election interference campaigns? The activities of extremist DAOs could challenge the rule of law, pose a threat to minority groups, and disrupt institutions that are currently considered fundamental pillars of democratic systems. Another risk is that DAOs can serve as safe havens for extremist movements by enabling users to circumvent government regulation and security services monitoring activities."

This is absurd.

Members of extremist groups of the type Ebner studies live and work freely in Western societies. They also happen to hold opinions that most members of polite society find repellent. Most of the time, at least in the U.S., holding extremist beliefs and expressing them is not a crime. If anything, having extremists post in Discord communities is useful as an early warning system for law enforcement, who monitor these forums; the only people who consistently argue that these communities’ very existence, even where legal, is dangerous to society come from academic/journalistic extremism and “misinformation studies” circles, ideological opponents to freedom of expression, and their political allies.

The reality of the situation is that, in the real world, if you are dumb enough to plan a serious crime or pose a serious challenge to rule of law on a public Discord, chances are good that law enforcement is all over it and that you will go to prison.

When we see largely peace-loving, crypto-nerd, not-racist, “DAOs” use virtually identical communications facilities, we should not also conclude that this makes crypto people extremists, or that this makes DAOs friendly to extremists, or even that DAOs are appropriate for extremists. It means that DAOs, like many other online communities which use Discord and make it one of the most popular social media applications in the world, including political movements, all emphasize participation over secrecy. Adding a DAO into the mix does not create a “safe haven” from anything, and certainly doesn’t “circumvent government regulation and security services (sic) monitoring activities.” Quite the opposite, in fact.

I have some experience with DAOs, having helped design the first Ethereum prototype of one in 2014, and advised a number of others since. Their principal role is not to communicate. It is to manage on-chain smart contracts and decide when certain administrator-level permissions on those contracts, such as setting interest rates or changing the feature set, should be exercised, amended, added, or removed.

DAOs are not “self-governed states.” They are self-governed software applications. Most of the time, DAOs are half-baked. The DAO part of the puzzle is often simply bolted onto an application to justify the sale of a cryptotoken to pre-fund the DAO founders so that they can get some runway to sling new code and figure out product-market fit.

Rarely, such as in the case of projects like MakerDAO, the project has tight product-market fit on the first attempt or very close to it, and token holders will periodically swing in to vote on a proposal. Even in those cases, “governance portals” where relevant communications on these votes take place exist in the open and observed by token-holders who will not want to “dox” themselves and create a user account in order to participate, although many large token holders who are in a position to dictate the outcome of proposals choose to dox themselves anyway.

As a general rule, by the time a proposal for such a change actually gets agreed on and implemented, considerable discussion about the proposal has already occurred. These debates are, overwhelmingly, conducted on the surface web, in the clear, where they can be monitored by law enforcement agencies with very little effort on the agency’s part, if desired.

The social media piece of the puzzle is no different from current social media communications. The DAO part is even more poorly suited to criminality and concealment given that (a) smart contracts are all publicly examinable onchain, (b) blockchain transaction data on the most popular EVM chains where the overwhelming majority of DAOs live is unencrypted and ingested by massive machine-learning analytics engines by companies like Chainalysis which work directly with law enforcement on a daily basis and (c) for the most part the only thing DAOs do is coordinate on smart contract state changes.

These state changes are only communicated to the chain after a rough consensus is reached among the voting DAO participants on the state change, which often involves a lengthy and drawn out debate about boring financial, cryptoeconomic and computer science issues. By contrast, the dissemination of “extremist” thought on the Web usually relies on the maximum-volume-and-velocity, and minimum-interference, transmission of edgy memes/propaganda, something which is not something economically practicable onchain given that it would be prohibitively expensive to fill up a block with a gif, nor is it something which requires consensus to be achieved before pushing an update transaction to a globally distributed finite-state machine with a money-token. Even e-mail would be more effective for this use-case.

If extremists want a tool to spread their poison, a DAO is not something they should want to use. It’s the wrong tool for spreading propaganda. It’s the right tool for reaching consensus on whether to move a smart contract interest rate 50 bps, and confirm that consensus by furnishing a cryptographically secure proof of voting power that will be automatically executed by the underlying L1 blockchain once a certain threshold of votes has been attained.

When a extremist groups like the Taliban, rathet than a bunch of loser schizoposters on Discord, start using DAOs instead of using WhatsApp for their communications, something which, for the reasons given above, will likely never happen, we can have this conversation. For now, anyone who knows anything about DAOs knows they are neither used by nor useful to terrorists or extremists in any way, shape or form. Real journalism of the type practiced by our fathers and our fathers’ fathers before them is not the same thing as making up random, defamatory, fact-free conjecture about an industry of brilliant hackers who are trying to make the world a better place, as has been done by Wired in this instance.