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In January, many people on crypto twitter proclaimed that if 2021 was the year of NFTs, then 2022 would be the year of DAOs. DAOs, or decentralized autonomous organizations, are a type of novel organizational structure that have proliferated rapidly in the last two years as money has poured into the crypto space. They are an extension of the crypto world’s promise of decentralization: instead of being owned by one person or controlled by a board, they are collectively owned by participating members, with decisions voted on and rules enforced through smart contracts.
Aaron Wright, a lawyer and co-founder of the Flamingo DAO, which invests in NFTs and creative projects, compares DAOs to “a subreddit with a bank account.” “The energy of the Internet is like a swarm, but there’s no really productive way to channel it,” he says. “I think DAOs are that answer.”
Enthusiasts believe that DAOs could eventually replace many traditional companies as a kind of new-age cooperatives. (Imagine a version of Uber where drivers are collective owners of the companyfor example.) At the moment, however, most DAOs focus on crypto and Web 3 activities. There are DAOs that collect NFTs (PleasrDAO), facilitate cryptocurrency exchanges (Uniswap), create on-chain products and tools (PartyDAO) and incubate and fund NFT artists (herstoryDAO, Mint Fund).
But skeptics point out that many DAOs are not particularly decentralized and have limited ability to navigate the unpredictable complexities of human organizations. “Calling a DAO a revolutionary structure is smoke and mirrors: it’s just voting stock,” video essayist Dan Olson argued in his viral YouTube video, “The line goes up: The problem with NFTs”. The month before, the New York Times published an article noting some of the DAO’s struggles, including massive hacks, low voter turnout, and internal conflicts.
While some DAOs have spectacularly faded, there are others that are quietly humming along, offering an alternative model of what a workplace might look like. One of them is dOrg, one of the first DAO to be legally recognized as an LLC in the U.S. dOrg, which was officially formed in 2019, is a software development company that helps build infrastructure for Web 3 and crypto projects. I interviewed four members of the DAO to find out what makes dOrg different from traditional LLCs and how these differences help or hinder their work.
A general call with dOrg, a software development company that operates on the blockchain
There is no management team, and everyone owns the company.
To start from the top, dOrg has no general management positions (CEO, CFO, etc.). While software engineer Ori Shimony co-created the company, he doesn’t have an official leadership title, instead describing himself as “helping with research and development.”
Instead, the roles are fluid, with people slipping into different roles depending on each project. Everyone who officially works for the company is a legal owner of the Vermont LLC, with each owner owning one share. Company decisions are voted on using tokens, which accumulate as you complete projects for the company. (Consequently, Shimony has the most of the company’s tokens, about 9%but that share has been steadily declining since the company’s inception and will continue to do so.)
Colin Spence, full-time product designer at dOrg, says learning about this ownership model was a “huge wake-up call.” “In almost every company I’ve worked for, my bosses have told me, ‘I really want you to own this project.’ But actually it is not true. Now, everything I build belongs to me. It totally changes the way you want to manage your time.”
However, the company is not completely non-hierarchical. The specific aspects of the projects are led by specialists (ie in technology, project management, etc.). But, a leader on one project might find himself briefing his subordinates on the next. “There is a difference between leadership and authority,” says Shimony. “There is no authority to wave a wand and make a decision. But it’s really helpful to have someone, or ideally multiple people, to provide advice, guidance, and direction.”
Developers choose their own projects and control their own budgets
Working hours and locations are flexible and autonomous. The employees I spoke with lived in three different countries and none of them said they worked more than 45 hours a week. They also talked about having a high degree of autonomy to find projects to work on, cultivate relationships with clients, and then build teams to execute those plans. dOrg project manager Magenta Ceiba, for example, is passionate about regenerative agriculture and supporting economies at the local level. When she came across AcreDAOS, an investment club focused on those topics that needed development help, she wrote a proposal that was quickly accepted by token holders on dOrg. “Values alignment was particularly high on this project,” she says. “Many of dOrg’s builders are from Venezuela, so they have a deep understanding of what happens when economies crash.
Nestor Amesty, a tech leader who is himself from Venezuela, says developers handle budget allocation themselves. “We co-audit ourselves,” he says. “If someone is abusing the budget, which definitely has been in the past, their peers will have a responsibility to speak up if they see something they don’t agree with. We have a clear structure on how to proceed if a conflict arises.”
Conflicts are mediated and then voted on.
With no central authority to rule on disputes, employees first comply with company guidelines for “decentralized dispute resolution.” Sometimes a People Ops specialist (essentially an HR worker) acts as a mediator. “That’s been working pretty well recently,” says Magenta. “We have a culture of being direct and communicative with each other.”
It’s not uncommon for Shimony himself to be overruled. He says that when he wanted dOrg to issue a public token, so that investors could buy a quasi-stake in the company, the idea “died in committee” after being discussed in several calls. “I argued with them; the decision was the other way around and I’m glad it was,” says Shimony. “dOrg is what it has become.”
If decisions are not resolved in discussions, DAO members vote on the blockchain. Spence says the company used to vote on almost every decision, which led to “information overload and a constant barrage of needing to feel like you needed to stick with everything you put your mind to.” While this process was perhaps the most inherently democratic system, it hindered progress, so the company began delegating decisions to smaller, more specialized groups.
The company outsources health benefits
For now, dOrg is partnering with Opolis, which sells healthcare for digital workers and freelancers, to provide health insurance for its US-based members. Ceiba, who lives in California and has state insurance, says she’s interested. in advocating that the company explore its own insurance options now that “we’re starting to have a healthy enough treasury to look at that.”
Salaries are transparent.
When it comes to paying fees and finances, dOrg aims for “radical transparency.” All salaries and budgets are publicly held on the blockchain; payment records are visible to each member.
And employees are paid according to their skill set, no matter where in the world they live. Amesty, who moved to Madrid from Venezuela after joining the company, says that when he previously tried to work for Latin American agencies, “usually they heavily arm developers to work for lower wages, because they know that Venezuela is in a very difficult situation. . After I started working with dOrg, I felt like my nationality didn’t matter, it was my job and what I delivered.”
In another interesting aspect, employees working on specific projects can choose to be paid in cash or in tokens that represent an ownership stake in those projects. If they choose the latter option, they are sacrificing money for immediate expenses in favor of the idea that the valuation of the tokens will increase as their projects mature.
For example, Amesty helped build the Polywrap development platform and says he chose to be paid almost exclusively in tokens, which will be awarded after 4 years. “I really think [Polywrap] it has a lot of potential to grow in the next few years, and I want to be a part of that,” he says. “It also motivates me to want to do my best, since I have skin in the game.”
Skill development is still a work in progress.
In theory, a hierarchically flat company could lead to worker stagnation, in which employees feel unmotivated to develop skills or advance. To combat this, the dOrg manual emphasizes “upskilling” and creating a collaborative structure in which employees with different skills learn from each other. “When people form teams, senior developers will encourage more junior developers to take on a larger part or a new skill set,” says Ceiba. Workers with more experience or additional skills are paid more.
Spence hopes the self-improvement process will become more formal, with a guide to skill sets that developers must master in order to achieve better pay grades and status within dOrg. He envisions a system where developers can sign up to develop various skills on each project, which are then reviewed by collaborators. “So there’s this constant mechanism of evaluating a builder’s performance and making sure that he’s really developing the skills that he needs,” he says. Spence says that he has proposed this idea in the past and hopes to help implement it over the next year.
Until then, the dOrg will continue to take on projects, vote on new proposals and try to streamline technical processes. “A lot of things started out as experiments, and there are things that need to be worked out,” says Amesty. “But it works. And I hope I can be here for a long time.”
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