The Telos of the DAO

We should also consider the possibility that having delegates is a fundamentally flawed model (alas one that’s operable right now).

Delegate programs suffer form serious principal-agent problems, and trying to remove conflicts of interest by making the delegates unable to participate in other (rewarding) activities requires delegates be paid a lot or have poor quality delegates (and a few altruistic ones but this is not reliable), and worse, limiting the involvement of delegates can exacerbate incentive misalignment as they’re less embedded in the ecosystem!

Citizen Assemblies are rapidly gaining in popularity amongst democracy researchers outside of web3 for these very reasons. And in Web3 we can reinvent this mechanism as Multi-Stakeholder Assemblies by inviting the multiple stakeholder groups to participate in structured deliberation. Multi-Stakeholder Assemblies largely bypass principal-agent problems of direct and representative democracy and also reduce some of the negatives of majority voting like polarisation.

So we can consider ways to mitigate for the downsides of delegates (incentive programs, conflict of interest declaration, etc.) but let’s not just limit ourselves to “put lipstick on the pig” when we have credible alternatives being tested at scale (e.g. EU and French citizen assemblies have taken place for years, with the biggest issue being the elected representatives over rule them).

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