Repurposing DAO to align the stars

The concept of boundary is essential to our cause because it relates to another idea – DAO[1]. However, in retrospect, DAO is a half-baked idea. When people first devised DAO, they just tried to move the formulation of organizations in the centralized world onto the blockchain, which they call decentralized governance. It is an oxymoron though – as governance is an institutional conceptualization – it belongs to the enforcer role of the trinity[15] – you remember trinity, right? Just placing the word decentralized in front of governance doesn’t make sense – the boundaries of the decentralized domain (around individuals) won’t align with the boundaries of the centralized domain (around institutions).

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⁴¹ How many cryptocurrencies are there? Also, this and CoinMarketCap - All Cryptocurrencies.

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An example of such misalignment of boundaries is governance within an organization – in the modern world, the function and role of governance is reserved for the board of directors of for-profit corporations, and board of trustees of nonprofit institutions (they are all for-profit bodies in actuality, just different arrangement for various purposes, including tax). So the governance bodies build another boundary within the boundary of an organization in the centralized world – through that second layer of boundary they can exert power and control within the larger boundary of an organization. From such setup there is simply no place on the conceptualization and practice of governance that you can latch decentralization onto. Decentralized governance is an utterly misleading term.

Because of the inherently flawed DAO conceptualization we can see that the blockchain applications built around the idea of DAO almost all followed the examples of a board of governance path in the centralized world. Although governance is done by voting on the blockchain through smart contracts (mostly on the Ethereum layer 1 main chain) – that step of voting is only a formality – corporate board rooms also conduct governance with meeting minutes meticulously recorded and curated for audit and scrutiny. In the end many blockchain projects managed through DAO are criticized by their own communities as heavily catering to just a small group of key decision makers who (unsurprisingly) monopolized governance for their own benefit, often disregarding concerns of the majority of community participants.

To fix this misalignment of boundaries problem of DAO, Metis changed the term DAO to DAC – Decentralized Autonomous Company. The word company has dual meanings: (a) A for- profit business organization; (b) Companionship or another person in companionship. We chose company to replace organization to repurpose DAO into DAC because we want to emphasize the individual – it is our way to realign the boundary of decentralized entities with the boundary of individuals, to realize the way of the unity – this is the essence of The Metis Way.

The repurposed DAO – DAC – is also called Individual DAO⁴² – another expression to emphasize the individual-bound boundary in a decentralized blockchain economy. We should also realize that the new notion of decentralized organization – DAC – must follow the way of the unity, which means DAC is individual-centric. Therefore, any mechanism design involving DAC must operate in an individual-centric way. What do we mean by individual-centric?

Since we all come from the centralized world, it is difficult at first to imagine a different kind of organization – the decentralized, individual-centric one – to help us imagine it, let’s use the analogy of star-alignment, or planet-alignment, for that matter: though insignificant in astronomy, planet-alignment as a celestial construct has special meaning in astrology – so it is a virtual construct occupying people’s collective minds – not a concrete one – but a virtual one existed in the public psyche nonetheless. So one can imagine decentralized, individual-centric organization as a group mind⁴³, virtual organization.

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⁴² Metis DAO Organizational Whitepaper 2021.

⁴³ See Group Mind (Science Fiction) and The Three Types of Group Minds.

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An individual-centric DAC can have a specific group of individuals’ attributes configured (“aligned”) in a certain way (e.g., binding to a function, or curve – Bounding Curve⁴⁴ like in the field of DeFi⁴⁵) to form a common purpose or application – thus the affected group of individuals can be seen as forming a virtual, or conditional organization. There is no hard boundary (which only exists around individuals), just a virtual one. Of course, those DAC individuals’ attributes are configured through smart contracts called mechanism (mechanism will be discussed in Part III).

Finally, with individual-centric DAC, it is time to create a blossom of decentralized ecosystem, the DAC economy.