Scaling Trust in DAOs: Trustware vs Socialware

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.

Tarun Chitra provided an excellent description of when governance is needed within DAOs in his recent piece for a16z,

DAOs are open and permissionless, but still need new ways of determining who to trust, collaborate with, and reward.

In the past, trust was purely social (think the caveman days). Then it switched to trusted institutions (banks, governments, companies) which was a step up, but we still had to rely on the other parties goodwill, or their incentive to behave in the right way.
The problem today is that institutions have become the sole gatekeepers of trust. We are st

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The internet was the enabler of large-scale human coordination. DAO tools — built on web3 — now give us the ability to design and manage incentives to maintain positive-sum relationships between stakeholders, keeping them aligned on shared goals as the product or community grows.

4. DAOs are trust-less organizations owned and governed by community members. DAOs have smart contracts for decentralization and humans on the periphery for governance.

Because of the limited token model on which they operate, DAOs are forced to rely on implicit and interpersonal mechanics. Human intervention is necessary because there is not enough trusted information captured on-chain about an individual in a DAO.