‘Minimum Viable DAO’ Product Looks to Supercharge Web 3 Governance

Decent Labs has an opinion on what the future of DAOs should look like, and it’s baking it into a new set of tools.

AccessTimeIconMar 8, 2022 at 5:00 p.m. UTC
Updated May 11, 2023 at 7:13 p.m. UTC

Rarely can one speak to an upstart crypto company in 2022 without hearing its plans to start a decentralized autonomous organization (DAO). But one company may be ahead of the curve, “firing” some staffers into its own DAO as it rolls out a suite of tools for other projects to get with the times.

Web 3 venture studio Decent Labs announced Tuesday the launch of Fractal – a developer framework that aims to help any company scale up its operations as a DAO.

While there’s no agreed-upon definition, a DAO is generally an organization governed in a decentralized manner on a blockchain like Ethereum. This sounds complex, but it’s typically just a group of individuals who each hold a token that can be used to express an opinion. Token holders can make proposals that are voted on by other members of the DAO; the more tokens a person has (the more “skin in the game,” in crypto lore), the more votes they get.

In its purest form, this marriage between governance proposals and smart contracts gives DAOs the power to do things like move currency from one crypto wallet to another once a proposal is approved, without any action from a central authority.

The most vocal proponents of DAOs herald them as a wholesale replacement for traditional companies. By their telling, the tooling just isn’t there yet.

Parker McCurley, co-founder and CEO of Decent Labs, is one such advocate. “We see Fractal as imperative in proving DAOs are superior to traditional corporate structures just as cryptocurrency has proven superior to fiat,” he said in a statement.

Through its Web 3 accelerator program, Decent Labs has spent the past several years incubating decentralized products in the Ethereum ecosystem. Fractal is the venture studio’s first official foray into product-building under the umbrella of Decent DAO, and with it, the team joins a growing cohort of projects working to make DAO governance practical enough to supplant traditional corporations.

The first Fractal product offering will be the “Minimum Viable DAO (MVD),” which McCurley describes as “a hyper-scalable, composable governance framework” – a stripped-down version of a DAO that can be augmented and adapted to different use cases.

The capabilities of the MVD will be extended by “modules.”

“We don’t care if what you’re doing is forming a proposal, voting, generating fees, defining roles, resetting network variables, forming a partnership with another DAO or signing a contract,” McCurley explained in an interview. “With our module interface, you can create any specific functionality like that, and MVD will translate it effectively into smart-contract operations.”

The team plans to launch MVD to Ethereum mainnet this month.

DAO ambiguity

DAOs were originally proposed in 2014 with the original Ethereum whitepaper and have since been employed for a variety of use cases, from making investments and awarding grants to building communities and managing a decentralized exchange.

DAO advocates forecast a brave new world where payrolls, strategies and hiring decisions across industries are all managed on blockchains by disintermediated communities of contributors and stakeholders.

Maybe you can picture this world if you squint hard enough, but predicting exactly how the day-to-day tedium of managing most companies is supposed to look on-chain can feel like an exercise in pure imagination.

The challenges wrought by these early days of decentralized governance were displayed nowhere more spectacularly than at SushiSwap, a DAO-governed decentralized finance (DeFi) protocol whose behind-the-scenes drama has been more turbulent than the price of its native SUSHI token.

With Fractal, Decent DAO’s chief ambition is to clear up some of the ambiguity surrounding how a DAO should be structured in order to operate most effectively. As such, McCurley explained to CoinDesk that Fractal will be molded by his team’s view on DAO best practices.

“We’re gonna bake in some opinions and best practices on how this organization should be structured, how people should communicate and how we should coordinate work,” he said.


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Sam Kessler

Sam is CoinDesk's deputy managing editor for tech and protocols. He reports on decentralized technology, infrastructure and governance. He owns ETH and BTC.

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