Building and Running a DAO: Why Governance Matters - a16z crypto

Decentralized governance is at the heart of the ideological foundation of crypto: equal participation for all actors. The playbook of progressive decentralization is being followed by more decentralized finance (DeFi) projects. Users and tokenholders can now have more control over protocol parameters, treasury spending, and, in general, the industr... See more

The promise of DAOs lies in self-governance. With the appropriate tools and mechanics, contributors can onboard, coordinate, reward one another, rather than relying on one single point of failure. In absence of such infrastructure, decisions will continue to be made arbitrarily and consensus cannot scale across the network.

But the management and organizational ‘overhead’ of traditional associations often exceed the will and ability of potential participants. If you’ve ever been part of a community or school group, you understand the often prohibitive burden. It’s not only the time commitment of planning meetings — it’s the social dynamics where a few very active memb... See more