Emerging from circles

Decentralized Autonomous Organizations: A New Paradigm for Entrepreneurial Collaboration

In the world of entrepreneurship, a new organizational structure is emerging: the Decentralized Autonomous Organization (DAO). This blog post will delve into the structure of a DAO, specifically one that is comprised of circles with specific responsibilities. We'll also discuss why humans perform best in smaller groups that collaborate on a higher level, using the Sociocracy 3.0 framework as a reference.

What is a DAO?

A DAO is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government. A DAO's financial transactions and rules are maintained on a blockchain, making it a prime example of a decentralized organization.

The Structure of a DAO

In our DAO, the structure is comprised of circles. Each circle has a specific responsibility and operates semi-autonomously. The circles are interconnected, forming a larger network that represents the entire organization. This structure is inspired by the Sociocracy 3.0 framework, which emphasizes equivalence in decision making and an effective flow of information.

Circles and Responsibilities

Each circle in a DAO has a specific responsibility. For instance, one circle might be responsible for finance, another for marketing, and another for product development. Each circle makes decisions related to its area of responsibility, ensuring that those with the most relevant knowledge and skills are making the decisions that affect them.

Interconnection of Circles

While each circle operates semi-autonomously, they are not siloed. Information and decisions flow between circles, ensuring that the organization operates cohesively. This interconnection allows for higher-level collaboration and innovation, as ideas from one circle can influence and inspire those in another.

Decision Making in a DAO

In our DAO, decision making follows a specific rule: members of circles make decisions within their responsibility. Decisions that affect multiple circles are made by the circles affected. Decisions that affect all circles, and thus the DAO as a whole, are called proposals. Every member of the DAO can hand in proposals with the proposal process, which will be explained in another blog post.

The Power of Small Groups

Research has shown that humans perform best in smaller groups. In smaller groups, individuals are more likely to feel valued, heard, and accountable, leading to increased motivation and productivity. Furthermore, smaller groups foster closer relationships, leading to improved collaboration and communication.

In the context of a DAO, this means that each circle can operate effectively and efficiently, while still contributing to the organization as a whole. This balance between autonomy and collaboration is what makes DAOs and the circle structure so powerful.

Conclusion

In conclusion, DAOs represent a new paradigm for collaboration and entrepreneurship. By structuring our DAO into interconnected circles, we can harness the power of small groups, foster higher-level collaboration, and ultimately create a more effective and efficient organization. As we continue to explore and experiment with this structure, we look forward to seeing the innovative solutions and ideas that emerge.