Can Coops Solve DAO’s Governance Issues?

Guided by Trebor Scholz

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As interest in decentralized autonomous organizations (DAOs) grows, it is critical to consider the future challenges they may face. One critical issue is governance. Cooperatives, conversely, have a long history that can teach us how to overcome these obstacles. Developers can learn how to build more resilient and effective DAOs by studying the successes and failures of cooperatives.

An Introduction to Blockchain and Distributed Autonomous Organizations

Ronnie Paskin is a blockchain expert and well-known name in the IT industry, having spent over three decades as a software engineer. He is also a researcher at Rio de Janeiro’s Pontifical Catholic University. For this session, he will introduce us to distributed technologies and Distributed Autonomous Organizations. Ronnie’s experience in the blockchain field makes him uniquely qualified to speak on this topic. In addition to his work in the private sector, he has worked with startups both in Brazil and in the USA, and educational institutions with  a deep commitment to social issues. As a result, he has a deep understanding of both the technical aspects of distributed systems and the social implications of these technologies.

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The Corporate and Labor Governance Concerns of DAOs 

Increasing numbers of distributed autonomous organizations, DAOs, have prompted new forms of corporate governance, Morshed Mannan argues. DAOs are managed by algorithms that automate various governance tasks rather than by a central board of directors. This tactic fixes some issues with traditional corporate governance, but it also introduces new challenges due to the inherent incompleteness of contracts. This is described as the problem of corporate governance-by-design. This talk serves as a cautionary note to emerging cooperative DAOs by highlighting potential governance issues they may encounter in the future. It also discusses the phenomenon of a growing group of people working through and for DAOs, raising questions about the rights that ought to be granted to them. To gain access to worker rights, it is essential to recognize some DAO members as workers. With respect to these governance concerns, the history of cooperatives, the application of employment law to worker cooperatives, and governance of worker co-ops offers salutary lessons. 

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How Developers Can Learn From the History of CooperativesJad Esber is an entrepreneur and product builder who is interested in decentralized technologies and their applications. Esber is also interested in the history of cooperatives and the key takeaways from this history that can be applied to developing new internet platforms and protocols. He argues that cooperatives have been successful in creating alternative models of ownership and control, but they have also faced challenges in terms of scalability. Consequently, he has investigated how developers and emerging internet companies might learn from the shared history of cooperatives and how, in practice, they can construct systems that respect cooperative ideals.

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Bridging the Gap Between Blockchain and the Commons
Particularly in the context of cooperatives, there is a growing interest in decentralized platforms. The rationale for selecting decentralized platforms over centralized ones is frequently based on the concept of the commons. The commons are community-owned resources, as opposed to those belonging to an individual or corporation. It is believed that blockchain technology is well-suited for managing the commons because it can facilitate the formation of trustless peer-to-peer relationships. There are already a number of cooperatives utilizing blockchain technology, including Dork.tech. Decentralized autonomous organizations (DAOs) are a type of decentralized platform whose governance capabilities are gaining popularity. DAOs are organized around smart contracts, which are contracts that execute themselves and enforce the organization’s rules. Depending on the context, the specific conditions that make DAOs preferable to centralized platforms may include greater transparency, accountability, and control for members. In conclusion, blockchain technology offers cooperatives new opportunities to govern themselves in ways that are more consistent with the values of the commons. Philémon Poux’s research centers on this discussion. 

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File Swap
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***Archival video of this segment is available here.***

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