A growing number of Ethereum enthusiasts believe that decentralized autonomous organizations (DAOs) could be the future of work, cultural communities and human organization. As such, some think that DAOs, like decentralized finance (DeFi) and non-fungible tokens (NFTs) before them, are due for a mainstream breakthrough.

On a basic level the thesis makes sense. After all, DeFi took off on the idea that it’s the inevitable successor to the traditional financial system while NFTs are soaring on the belief that they are the digital generation’s art world. So why shouldn’t DAOs, with their rules of organization programmed transparently onto blockchains, have their moment as they seek to replace the outdated hierarchical structures of centralized corporations?

Unfortunately, placing a bet on that trend playing out isn’t as cut and dry as buying some tokens.

At the MCON conference last week, over 300 attendees selected by the organizers met at a sprawling Denver brewery to discuss the future of DAOs. Even by the at-times Pollyannaish standards of the Ethereum community – a group that sincerely believes itself capable of building smart-contractual solutions to many of the world’s problems – the outlook was rosy and the mood upbeat.

“The way I’ve been thinking about it, if you look at DeFi it’s a bet on the future of finance. NFTs are a bet on – I’m not exactly sure. It could be art, it could be real estate, it could be any type of property – it’s a bet on the future of property,” Yearn.Finance core contributor and noted DAO air traffic controller “Tracheopteryx” told CoinDesk. “But DAOs are a bet on the future of human organization itself, which is an even bigger thing.”

And yet, among outsiders DAOs are scarcely understood. Mainstream media, financial pundits and regulators occasionally have some functional literacy when it comes to DeFi and NFTs, but DAOs largely remain a foreign concept – perhaps most well known to blockchain novices for the notorious hack of “The DAO,” an early DAO investment experiment that collapsed in 2016.

Read more: The DAO Hack Is Still a Mystery

Today, there’s even some definitional debate about what a DAO is exactly. The acronym generally refers to a collection of on-chain rules governing an organizational body as well as – occasionally, but not necessarily – an attached pool of funds.

Ameen Soleimani, an early DAO pioneer and the founder of SpankChain, jokingly refers to them as “glorified budget committees” or “group chats with a joint bank account.”

“We don’t even know what ‘a DAO’ even means. There’s tons of competing definitions,” said Tracheopteryx. “We understand pieces of it but we’re still piecing it all together.”

For all the loose lexical rules, however, in recent years DAOs have arguably made more technical and developmental strides than any other blockchain sector. Many DeFi and NFT projects are DAO-governed; a large and growing percentage of the roughly $2 trillion total cryptocurrency market cap is managed by the entities. Tooling and functionality have seen significant upgrades with work from organizations like Colony, Aragon and Coordinape. Opolis, a benefits and payroll cooperative, can even help full-time DAO workers get health care.

On a medium- to long-term time horizon, DAOs present the kind of vision that could entice any investor.

“Imagine if you could have bet on the concept of a corporation when the Dutch East India Company launched, imagine how much that concept space has grown on the planet in that time. And DAOs are the future of the corporation, of organization … it’s a much, much bigger market,” said Tracheopteryx.

As a number of experts told CoinDesk, however, betting on the future of DAOs is a surprisingly tricky proposition.

For months, DAO proponents have been hyping the organizations as the “next” asset class to rise after NFTs.

“I do see a lot of interest and heat around DAOs that we haven’t seen before. I think of DAOs as the coordination of capital and culture. I’ll be interested to see how they grow,” said Kevin Owocki, CEO at DAO-run grants organization Gitcoin.

He went on:

Picking those winners is dicey work, however, and aiming for the entities that provide the infrastructure for DAOs might be a higher-percentage play.

Soleimani pointed to DAO toolmakers (the old “sell shovels during the gold rush” trick) such as RaidGuild and DAOHaus as infrastructure options, as well as voting platform Tally.

He also joked that Collab.Land, a social media botmaker that kicked him out of the Friends With Benefits social club DAO because he had fallen under a necessary token holder threshold, could be worth a look as well – the tool works, after all.

However, an investor looking to deploy large sums of cash to the sector may come up short – not all of the above projects have investable tokens. Additionally, Soleimani warned the infrastructure play may have limited upside.

“The weird thing is, those projects may underperform certain DAOs themselves,” he said.

He compared the phenomena to the choice between investing in NFTs directly or buying platform tokens such as Rarible’s RARI. Where NFTs can return multiples in a matter of weeks, at the time of writing, RARI is down 52% on a 30-day basis.

Bill Warren, the executive steward of product and technology at Opolis, did say that one avenue big-name investors could play would be taking a “wisdom of the crowd” approach by “funding the funds” – investing in DAOs that actively manage portfolios.

“They’ll put money into investment DAOs like MetaCartel Ventures, and they say, ‘We realize that this swarm of people is better at picking winners than the, like, 12 mostly men who went to Stanford.’”

However, people looking at DAOs solely from an investment perspective are missing half the point, Warren cautioned:

He pointed to MetaCartel as an example – the grants distribution DAO was formed with the express intent of giving away its membership dues. Warren says that over time it’s become one of the DAOs nearest and dearest to his heart because as the money’s dwindled, the community has grown stronger.

Panelists at the conference spent nearly as much time discussing the social layer of DAOs as the technological progress being made. Programming included talks centered on using Teal workflow principles to encourage a flat organization, workshops on conflict mediation and reflections on how working for a DAO can increase quality of life.

Multiple experts who spoke to CoinDesk expressed doubt that investors who are wholly profit-motivated can fully appreciate DAOs without understanding both who is joining them and the benefits that participating can incur.

“There’s a group of Gen Z people who feel screwed over by late-stage capitalism,” said Owocki. “We inherited this economy where climate change is a big problem, misinformation is a big problem, where we don’t trust our institutions and we have our new culture that we’re inventing that is built around our generation’s needs and values and thoughts.”

He went on:

There were moments during the conference where that incompatibility was on full display. One investor tossed around the phrase “minimum viable community” – an odd mashup of analytical investor-speak applied to ineffable human organizations. The fundamental immeasurability of many of the metrics that make DAOs viable – the fervency of the community, the strength of its memes, etc. – render classic forms of investment analysis nonsensical.

So far, major funds participating in DAOs have seen mixed results.

There are firms, such as ParaFi and Delphi, which actively contribute to engineering work and make governance proposals in DAO-governed DeFi protocols. Likewise, investing giant Andreessen Horowitz recently launched a token delegation program – but only after a pair of controversial DAO proposals in decentralized exchange Uniswap’s governance forums.

Read more: A16z Details Its New Approach to Crypto Governance

One “DAO-lord” and angel investor who asked not to be named compared the phenomena to the Taliban discovering Black Hawk helicopters in the wake of the U.S. withdrawal from Afghanistan; hypothetically DAOs could be tremendously powerful tools, but first VCs must learn how to use them.

“There’s friction there, because whenever you try to control something that is decentralized, you’re either going to break the community you’re trying to control, or you’re not going to get what you wanted out of them,” said Warren, the Opolis steward.

He went on:

Part of the friction, too, comes from the fact that if successful, DAOs will replace venture capital firms – it’s Web 2 organizations trying to invest in the Web 3 progeny perhaps fated to kill them.

“That feels like capitalism. That feels like the growth of the new and the death of the young,” Owocki said. “The question I ask myself is, ‘Why didn’t Kodak invent Instagram?’”

Another reason why DAOs may not see a major capital rotation is because by many metrics the DAO supercycle is already underway – it just might not show up on CoinGecko rankings.

Plenty of early DAO participants – Moloch DAO “summoners” and MetaCartel donors who went through the early experiments – are currently flourishing, and likewise have spawned a whole family tree of projects.

“A lot of the people who went through this were at the top of the wave, they’ve been able to go on to build communities that do other things,” said Soleimani. “In the case of, for example, Joseph Delong, who was an Eth 2.0 developer at ConsenSys, he decided of his own volition to join Moloch DAO, put up 100 ETH of his own money to fund Eth 2.0 development – that was his own stuff. And now he’s in the leadership.”

Delong is currently the CTO of decentralized finance platform Sushi, a position that affords him significant community sway.

Likewise, Soleimani spoke with pride about Cooper “Cooopahtroopa” Turley, who Moloch DAO once paid to write an end-of-year blog post. Turley has gone on to become a full-time “DAO-lord,” as Soleimani puts it – a key figure in groups such as FireEyes and Friends With Benefits.

It’s an uncommon form of investing, perhaps even closer to networking – lending fiscal and social capital to an organization and only later reaping the rewards through the opportunities that arise.

Those opportunities, in turn, also expand the DAO ecosystem. Warren and Soleimani both noted that DAO members often go on to form new organizations, one which may have a different mission, purpose and needs – needs that prompt new investment in DAO infrastructure.

“Those people will have problems that they will pay to solve,” said Soleimani.

An investor looking to passively deploy capital ultimately won’t be able to catch this trend; only someone on the inside will be able to perceive the shifts and cycles.

Ultimately, while there is a small but growing number of tools and launchpads that may be investable, every expert CoinDesk spoke with agreed that the best way to generate value from this emerging vertical is through active participation – what Tracheopteryx called “contribution mining.”

“If VCs try to invest in DAOs without joining any, that would be kind of stupid,” Warren joked.

There are a number of guides on how to approach joining a DAO, but Tracheopteryx said the process isn’t nearly as complex as, say, interacting with a DeFi contract – an investor just needs to find their preferred camp and then chop wood or carry water.

“The really easy answer is, ‘What are you interested in? What do you believe in, who shares your values, are there people working there that you vibe with?’ Just jump in the Discords and find a way to start contributing,” he said.

After all, revolutions don’t necessarily need investment, they need boots on the ground – and, as Soleimani argues, the opportunity to overhaul the structure of human organizations is every bit as exciting as the financial rewards:

No matter how rosy the future of a particular DAO may seem, you need to be involved in the messy reality of it if you expect to profit from it.