The Tao of a DAO

tl;dr: What does a work of ancient Chinese philosophy teach us about thriving in a decentralized world? A lot more than may be obvious at first glance.

I’ve been getting increasingly more involved with the GenesisDAO. (n.b. DAO is Decentralized Autonomous Organization)

GenesisDAO is responsible for seeding, or as we like to say “pollinating” other DAOs, all using a common underlying platform from DAOstack (discl: advisor).

I realize that, for most people, this whole concept of an organization that governs itself with a common layer of trust provided by a blockchain-based protocol is ridiculously abstract.

I would argue that, for many people involved in the GenesisDAO, it’s a surreal experience as well.

We are aware that we are participating in an experiment that, somewhere, somehow down the line will shape the future organizational models for millions of people.

It’s a bold statement. I know. Sometimes, I don’t even believe the stuff I say or write!

Parallel to my experience with DAOs over the past few years, I have also been engaged in an ongoing study of “The Tao,” as written by Lao Tzu.

Initially, I just thought it was kind of funny that I was studying and learning about two things which are 2,400 years apart, but have the same name.

At first glance, what could an ancient work of Chinese philosophy and a decentralized organization running on a blockchain have with each other?

However, the more I studied The Tao and the more I got involved with the GenesisDAO, the more I realized that there is a lot more overlap than meets the eye.

Granted, this could be my effort to find a cool blog post to write today, but not so sure.

Every day, I open up a few apps on my phone with quotes from Greek Stoics and philosophers, Confucius, and Lao Tzu.

I use these to feed my meditation, which immediately follows the reading of each set of quotes..

This morning, I opened up the Lao Tzu Daily app and saw this:

Lao Tzu says:

“He who desires the admiration of the world will do well to amass a great fortune and then give it away. The world will respond with admiration in proportion to the size of his treasure. Of course, this is meaningless.

Stop striving after admiration. Place your esteem on the Tao. Live in accord with it, share with others the teachings that lead to it, and you will be immersed in the blessings that flow from it.”

One of the things that is both immensely exciting and, frankly, a bit intimidating about joining a DAO is how different it is from a traditional organization.

I don’t know if I’m the oldest member of the GenesisDAO or not, but I’m definitely on that side of the curve.

Even though I am acutely aware that flat, non-hierarchical, organizations designed with mutually reinforcing economic incentives and community-audited accountability are very different than “command-and-control” structures, it’s very difficult to unlearn some habits.

What I’ve seen so far (and it’s VERY early) is that you have to be cognizant of a few things when participating in a DAO.

In a DAO, no one works FOR you. You can’t tell them what to do. There’s no authority in the traditional sense.

You earn “Reputation” in the DAO for having been a positive contributor to the organization. That Reputation is granted to you by the other members of the DAO.

If enough people vote for you to get Reputation (or funding), you will get it. If not, you won’t.

This has a potentially serious impact on your behavior.

After all, if you are boring, rude, and/or don’t deliver against your promises, the other members of the DAO will leave your project, in my case the DMO, and go participate in another project that is likely to yield higher results (better ROI).

After all, they have a direct economic incentive to “vote with their feet” (mouse). If DAO members waste time on a boring meeting or fruitless project (something that NEVER happens in a traditional org, of course) they are directly penalized for it, since the DAO is leaving value on the table.

What this means is that each member of the DAO also has an economic incentive to be a nice person, to be a good collaborator, to be a team player, and to hold each other accountable, regardless of age, experience, or perceived influence.

It can feel like a free-for-all and, to be sure, at times it is a bit unruly and unclear how things will evolve (I’m still not sure myself). However, there’s something far more democratic and meritocratic about it, though there is much yet to figure out.

One thing is for sure.

Arrogance and self-centeredness have no place in a DAO. The organism will reject you.

The esteem in which one held oneself because of previous titles or years of seniority in a previous company are meaningless in a DAO.

So, don’t hold onto it. Instead, as Lao Tzu would have said if he had understood blockchains:

Place your esteem on the Dao.


The Tao of a DAO was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.