DAOs Are the New Way of Impact Work

"Impact DAOs" are at the forefront of a new culture of work that asks us to move towards aligning our values with our actions, says the co-founder of Gitcoin.

AccessTimeIconJul 1, 2022 at 4:11 p.m. UTC
Updated Sep 19, 2023 at 4:04 p.m. UTC
AccessTimeIconJul 1, 2022 at 4:11 p.m. UTCUpdated Sep 19, 2023 at 4:04 p.m. UTCLayer 2
AccessTimeIconJul 1, 2022 at 4:11 p.m. UTCUpdated Sep 19, 2023 at 4:04 p.m. UTCLayer 2

The Web3 community is, at heart, rooted in profound optimism. The increasing ubiquity of this technology makes it possible to envision a world where everyone is equipped to both survive and thrive.

Essentially, Web3 has become a Schelling Point for the hopeful.

This makes our corner of the internet especially important in a world where it’s easy to be rightfully cynical about failing institutions, crumbling infrastructure, privacy violations and climate disaster. At times it can even feel like we live in a divided world where it isn’t clear who the “good guys” are anymore.

This op-ed is part of CoinDesk's Future of Work Week.

While Web3 can’t solve these problems overnight, I truly believe we have more tools than ever before to address the most pressing coordination problems we face today. Collaborative, internet-native organizations like decentralized autonomous organizations (DAO) especially offer shared narratives (memes), economic incentives (money) and more flexible local governance structures (management) to move us in the right direction.

Impact DAOs are at the forefront of this trend towards a new culture of work that asks us to move towards aligning our values with our actions, and away from so-called bulls**t jobs (one that even the person doing it secretly believes need not, or should not, exist). In this sense, despite cries to the contrary, Web3 is an antidote to an increasingly abstract economy and, through a sense of play and absurdism, gives us a chance to more directly sign meaning into every block in which we take part.

Many of the DAOs driving these changes, like Gitcoin, are focused not just on their own mission but on forming polycentric “impact networks” – networks that collectively produce positive externalities for those around them. With this in mind, programs like Gitcoin Grants have been able to help seed everything from core infrastructure like ethers.js to scaling systems like Optimism, to widely used applications like Uniswap. And because of the composability of Web3, the success of these projects allows us all to build more shared infrastructure together.

Shared narratives and impact

To keep these networks alive, however, requires new ways of thinking about what it means to work together when we’re often so far apart, sometimes just relating as avatars on a screen. Specifically, it requires deep thought around how we can stay aligned with each other and construct non-standard ways of governing ourselves (self-organizing) at scale.

Alignment is fundamentally about our ability to connect deeply with each other in smaller groups, squads or as many now call them, pods. It’s our ability to find connection and belonging. And if social media has taught us anything, it’s that alignment is extremely hard to scale past Dunbar’s number (our natural cognitive limit on how many people we can get to know).

Everyone reading this has almost certainly been part of group chats that stick together by continuously sharing memes and building the empathy required to see each other as 3D humans. But as groups scale from 15 to 150 to even 15,000 members, the vibes may not as our ability to connect with each other diminishes. This has been a major challenge for the DAOs-as-social-clubs model popularized by Friends With Benefits (FWB).

Shared stories and lore, especially when built around making an impact, help us keep that alignment together over a longer period of time. Of course, this isn’t new to Web3 – every society has its own set of narratives to help us manage our collective memory; to stay on the same page, moving in the same direction. In Web3, we’re able to take this even further, creating incentives that allow us to keep working towards a common goal; to keep playing positive-sum, infinite games together without getting caught in endless bureaucracy. By using shared currencies that align to our values we’re much more likely to play these games over long periods of time just for the sake of playing – for the sake of making an impact.

Governing the generative commons

But DAOs, like any organization, still require structure – shared agreements that act as glue holding us together, even when we don’t align.

Crucially, structure is not hierarchy, but an often clumsy negotiation towards a formally inclusive way of holding space together. Movements like Occupy Wall Street are great examples of why this is so necessary. The simplicity of “We are the 99%” was a powerful cry that united people across differences, but couldn’t survive the pressure from incumbent powers without clear structure and accountabilities.

At Gitcoin, we think a lot about regenerative structures that start with looking after our own local shared needs. To do this effectively, we’ve based a lot of our thinking in the DAO off of Ostrom’s eight principles:

  1. Set clear boundaries between community and resources.
  2. Define rules locally, alongside immediate stakeholders.
  3. Put forward clear participatory procedures for updating rules.
  4. Create accountability once rules have been set.
  5. Apply *graduated* social sanctions for conflict resolution.
  6. Ensure conflict resolution is informal, accessible, and low cost.
  7. If needed, ensure your rules are unimpeded by higher regional authorities.
  8. Continue nesting rules this way until everyone is in alignment.

In short, Ostrom pushed back on the idea of the tragedy of the commons – that communities would naturally tend to over-consume and underinvest in scarce resources, eventually depleting their shared needs. By making lots of small agreements that work locally and scaling slowly, it would be possible to actually keep resources in check and keep an ecosystem sustainable.

In a DAO, the tragedy of the commons plays out in less intuitive ways, when leaders don’t share context for those that come after them, or when time gets eaten up by bikeshedding. But through shared principles, agreements, and creative constraints, DAOs can become fundamentally generative and set the initial conditions for sprawling, open environments. Unlike in traditional corporate structures these kinds of mycelial networks form without bureaucracy, leaving contributors open to reclaim their agency and self-organize. Notably, no DAO is perfect, and as in any organization documentation is critical. Investor Linda Xie, one of our most active stewards, has done a great job of outlining some of the evolving processes we’ve been thinking about.

The best part about this emerging future of work is that all of these questions are still open for anyone to answer. In Web3, there are no “experts.” No one knows where Web3 will go, but we all found our way here.

Find your squad, join a DAO and make an impact. Let’s make a future of work worth writing about.

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Scott  Moore

Scott Moore is a co-founder at Gitcoin, an internet-native community focused on building and funding digital public goods. He's also an active steward for other public goods focused DAOs including ENS, Gnosis Safe, and Optimism.