Decentralized Autonomous Organizations (DAOs): Changing The Nature Of Labor

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For the last half century, we saw a major shift in power in the workforce. Due to the addition of tens of millions of Baby Boomers entering the workplace in the developed countries, we saw the paradigm shift in favor of employers. This is no secret yet did have a major impact upon the income and wealth inequality.

Since corporations were able to dictate what was taking place, those who benefited from the new arrangement were few. This took on an added dimension as technology entered the picture.

Here we see capital and labor were at odds. Individuals were forced to accept conditions that did not financially benefit them, at least not to the same degree as the other party. Over the decades, this kept expanding.

It is not difficult to see how the shareholders and employees were at odds. This is something that many tried to alter yet it appears to be a simple case of supply and demand. When there is an abundance of workers, it does not take genius to figure out how that will tilt the power equation.

And that is exactly what happened.

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The Commoditization Of Labor

Corporations found themselves in an interesting situation. Certainly, when it came to the most capable of workers, these entities were in a competitive situation. They were fighting against each other for the top notch talent.

Here is where we see the financial benefits. Those who were engineers, software developers, or turn around experts found themselves in high demand. It was a situation that provided a great financial windfall to them.

There is another piece to this puzzle that is still shaping up today. While the corporations were fighting for talent on one hand, they were also trying to commoditize it on another. With the addition of automation, the goal is to get things as standard as possible. This would make people interchangeable. When this occurs, their value is lessoned.

For example, a mason can be a high demand individual. Depending upon the talents, this person might generate some unique designs that people are willing to pay top dollar for.

This all, however, goes out the window when anyone can slap some stucco on a building. As products became commoditized, so did labor. In this situation, home construction, it is hard to deny that most residences in a subdivision all look the same.

We can apply this concept to the application-based delivery services. After all, do you really care who brings the food you ordered or takes you to the mall? To you, that person is commoditized also.

The situation is now going an extra step as technology seeks to automate as much as possible. We can see the potential of tens of millions of jobs eliminated through the implementation of technology. This will, obviously, have an even greater impact upon labor.

Decentralized Autonomous Organizations (DAOs)

The DAO seeks to change all of this. We are looking at a situation where the automation aspect of things is taken in consideration. Since we know this is going to be a standard going forward, what can we do to alter this?

When we break the DAO down to its basic components, we see that what it really does is alter the "ownership" of the automation. Those who participate, in whatever form, are also stakeholders. This is an entirely new concept that only came about as a result of cryptocurrency.

One of the keys is that while a DAO is automated, that does not mean that specialized labor is not required. There are a host of services that a DAO might need to fulfill its obligations to its stakeholders. For this reason, it can hire individuals to provide the necessary labor. Here we see that people are not commoditized since they are free to accept, or reject, what the DAO is offering. Of course, since it most likely being paid in the token of the DAO, one is simply not getting a "paycheck". Instead, one immediately is granted stake in the organization.

Participants, in whatever capacity, are owners.

Of course, this does not have to just be temporary or gig work. DAOs can employ people full-time, providing the bulk of their incomes.

It is not a concept that is entirely novel. Stock options are something that seeks to do the same. The idea is to align work with ownership. Unfortunately, these are often only available to the most sought after of employees. Those that the company is trying to commoditize (the bulk of the workforce) do not share in this compensation alternative.

A DAO really has no choice in the matter. Certainly we could see the situation where payment is made in something like Bitcoin. However, the likelihood is that the DAO cannot do anything but to pay out in its native token. This means that no matter what the level of compensation, ownership stake is being provided.

The Elimination Of The Corporation

This is a business structure that was used over the past couple hundred years. Certainly, it provided a major thrust in the progress of society. However, the drawbacks to the corporation are becoming evident.

Here is where we could see the new structure take over. This will take many decades to come to fruition, mostly due to the fact that we need technology to advance to the point where automation is taking over. It is hard to have a DAO without a major component being in this fashion.

It is for this reason that many existing entities cannot be converted. Those that depend upon labor do not fit into the DAO model. Of course, as technology moves forward, the ability to automate more increases. Here is where the DAO is the ideal business structure.

If we ponder it for a bit, we can see how a DAO resolves a host of issues. Inequality on the wealth and income side is immediately addressed. Since much of this stems from the masses having little to no ownership stake in our economic productivity, we see this resolved. Also, the issue of distribution is answered since that process is spelled out in the code itself. Everyone is well aware of how things operate before entering.

This does not mean that all issues are resolved. DAOs are relatively new and require a lot of experimentation. They are not perfect entities. Governance models are being worked upon that can address the needs of the greatest number of individuals involved. Is the present governance system going to be what is used in the future? It seems likely that we will see tentacles forming as different models are produced.

Nevertheless, in spite of the flaws, we can see how cryptocurrency opening up the world to the DAO is already having an impact. Today, few are involved in such things. However, in another 5 years, we could see hundreds of millions of people who have stake in these entities. This is going to give them a slice of the overall economic productivity that is generated, something that has not taken place for most.

Just consider what things will be like with millions of DAOs in operation, all looking for people to assist in whatever way they can. It stands to reason this will certainly change the nature of labor.


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Beautiful... The DOA is automated, this I actually know but I'm trying to replay a process in my head where people will still be involved and provide efforts and be paid. The automation we have with real-time institution clearly eliminates human efforts.

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Start with the concept that someone has to keep the coding of the DAO's smart contract up to date as the community decides different things.

This is one example where someone needs to be involved in the process.

Then drift out from there, considering other jobs that the DAO might need handled.

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Then drift out from there, considering other jobs that the DAO might need handled.

Yeah, I believe even if it's automated, real people would eventually run a lot of proceedings since it's decentralized, it's more about people and community and how to empower them.

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Also, the issue of distribution is answered since that process is spelled out in the code itself. Everyone is well aware of how things operate before entering.

I think this is the best thing to happen when it takes over. I am sure a lot of people are not happy with the current system and it seems to be burning itself down right now also. We need to start taking back more power from the government since they have been taking more and more power for themselves.

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In the present system, we have no choice in the model we operate under. Simply, it is based, for the most post, on where we are born.

In the decentralized network-states, we will have a choice in what we operate under.

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mostly agree
However got a couple of unclear ideas

I love the idea of getting paid in a token issued by the DAO I would be working for , that is great if its value keeps stable o raises ,but what about if the token value depreciates itself ? many people now work for a fixed income , would they accept the risk?

Second ,At least in my country I find the government controlling extremely the labour money flow .I would say that forcing companies to use workforce as commodity

p.ej: if a company owner gives an extra payment to a employee out of the control of the tax agency , the employee could later call tax agency and the boss would get fined

Also people easily get envy when they see somebody earning more money than they
So if u have 100 people earning 1000$ , you would have 100 workers/voters feeling neutral about their economical l status
If u have 90 person earning 1000$ and 10 earning 1500$ , you may end up with 90 angry voters

Guess governments hate the idea people earnings go out of their control , at least in my country

Out of this points . brilliant article as usual

I love the idea of getting paid in a token issued by the DAO I would be working for , that is great if its value keeps stable o raises ,but what about if the token value depreciates itself ? many people now work for a fixed income , would they accept the risk?

Market prices go up and they go down. Of course, if it does go down there is that risk. The individual would be free to sell the token if he or she desired. However, you raised the concept of "income", negating to focus upon the ownership aspect.

If one wants to sell the token, that is his or her right. However, all benefits of having stake are immediately negated.

As for governments, they are not part of the equation. They cannot handle anything that is decentralized. A DAO, by definition, is outside of the control of any government. Look at the DAO on Hive: no government can tough what is distributed in payouts to the proposals that the community decides to fund.

That is where they are going to run into issues. A true DAO causes government impotency. It is only those entities that have centralization which are masked as DAOs which have issues.

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I suppose it would be something very similar to the materialization of the networks but with mechanical work and specialized labor

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Bang, I did it again... I just rehived your post!
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Your post is very serious and interesting text. His ideas are globular and need to be studied.

Funny to admit I recently had to google what the abbreviation of DAO stands for, so I found the answer, but your article provided more context which I am grateful for. Would you qualify Hive as DAO in any case? Or maybe you know of a good example of one?

Well, if Splinterlands becomes the Apple of Dapps, creating new blockbusters every year, SPS is going to moon.

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Way to go! Congratulations for all the hard work you have been doing to make these types of things happen.

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The article moves in the right direction however it's conclusion still seems to me circular in that they all seemingly on this subject end the same and that is with just create many dao's and those dao's get it right and solve the problem overall. Unfortunately i don't think the solution lies in how many dao's you create or how many people use dao's but how the dao itself is governed and designed. I think the effectiveness of a dao should lie in the level of democracy and distribution as well as representation. I think of which all of these categories border on the same exact thing. So i don't believe you can be decentralized without addressing influence, wealth and representation. .if any area is lacking i don't believe you can genuinedly consider it decentralized as a network. So about 99.9999% of cryptos fail in this lol.

So a commentor gave an example of workers having ownership over the platforms. The problem is i don't think that's necessarily going to be the solution in that it suggests that everyone wants to be in positions of ownership. I don't know if everyone desires it or needs to be over the idea of everyone needs sustenance and basic needs and well being of circumstances met.

i think ownership in a bad community or environment is still bad. Now where i think a disagreement will come with me is where i value well being and the best possible outcome for all over your personal in some instances harmful freedom of choice. For example:

I may say it's a good idea to wear a mask because it may to some degree reduce transmission of several diseases. You may say well i value my freedom more than that idea. In your idea of freedom it may be harmful to you or many others but you use your freedom to make that choice. In my idea of freedom the best possible outcome which is protection of many people on both sides including yourself to a degree is the best choice. Not just the choice of am i free to do this.

I look at the idea of the DAO the same way. That just creating more and more dao's don't necessarily solve any problems. if your dao doesn't allow for a great degree of equal representation then that's not a good dao. That's in my opinion not a solution based dao that needs to exist. I believe we could have millions of those type daos and they still amount to nothing. It's like replicating the economic and political systems we have all across the universe and every theoretically inhabitable planet using it and reaching the same outcome as what we have now. That would not make things any better. it would just make it more of the same. So i don't see the evidence of just creating endless dao's governance models as the solution. I understand the idea of experiment after experiment to see what works. however what i see particularly in crypto is they do experiment after experiment and they don't even really take the data into consideration. if they did they'd discard what doesn't work. I think often times it just goes back to the area again of less representation in teh communities being overlooked once again. Well that's just more of the same. That's not adaptive learning. I don't see that in the hive model at all that it's doing a great job of adaptive learning because to do that they'd have to address proof of brain which they continually skip over lol.

So in conclusion i'll go back to what i stated in the first paragraph. " effectiveness of a dao should lie in the level of democracy and distribution as well as representation", you can also swap out representation with participation. Why are these areas important? Well i don't think you can have any true sense of decentralization without it.. that's number 1.

Here's number 2:.. the old ideas of we're learning we're evolving no we're not. it's just point blank if those areas don't look good or satisfy the need of the community using that dao. It's just a bad dao point blank. It's no further conversation to it about one day we will. No one day you may be doing the same thing you doing now. Some say well it's improvement? is it? is it significant improvement? based on what? what are the numbers and in comparison to what?

I know when i read stats like 87% of the bitcoin network is owned by like 1% of the entire network. I come away with that as it's bad. Doesn't seem to be getting much better. that's just the reality of it. The altcoins are in most cases even worse or can overnite shift to numbers like that. So we need to stop the narrative of it's getting better.

It gets better when we designed that community and that system that addresses democracy, distribution and representation/participation. So your dao either does that or it doesn't. It's no we form a billion dao's and people fall through the cracks. we could also just recreate the environment that we have outside of crypto.

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