Although traditional companies seek advice from consulting firms, agreements and DAOs usually have completely different needs, operational mechanisms, and cultures, and other crypto-native contributors provide better services for them. Organizations serving DAOs are striving to address this need, positioning themselves to capture the $26.3 billion Web3 consulting market.
Over the past month, we have interviewed operators serving DAOs. Below, we hope to provide an overview of the biggest challenges they face and ideas from the community on mitigating these challenges in practice.
In comparison to traditional consulting firms, operators serving DAOs have three key advantages:
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Contributors gain direct ownership in the organization.
Contributors to a DAO gain a share of the value they create for each client, as well as a share of the entire organization—that is, its reputation or future revenue streams. -
Open contribution culture.
Some organizations serving DAOs are structured so that anyone can join and contribute. -
Better understanding of the problems that need to be solved.
The biggest clients of organizations serving DAOs are other DAOs and crypto protocols. These clients face unique challenges in development, operations, management, compensation, public relations, and law, which are best solved by other DAOs.
We have categorized the most frequently mentioned issues from our interviews into four interrelated categories:
- Talent
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It is difficult to find and retain contributors. Experienced contributors often jump between different DAOs, making it hard to stay in one DAO long-term.
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Operations
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There is a lack of standardized processes. Operators find it difficult to standardize processes and maintain documentation for these processes.
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Legal uncertainty.
Many DAOs face difficulties in their early stages, especially when they are not based in the United States, in choosing the best entity, issuing tokens, assisting contributors with taxes, and paying vendors/non-crypto external entities. -
External challenges
- There is inconsistent customer experience. Due to the lack of standardized processes, good communication cannot be guaranteed, or due to the lack of quality assurance in the hierarchy, projects take longer to complete, and some customers do not have a good experience.
Once contributors have outlined the biggest problems they face, we asked what solutions could alleviate these issues within their DAOs. We have compiled these crowdsourced solutions.
Please note that each solution is applicable to at least one of the DAOs we spoke with, so there may be contradictory solutions suitable for different DAOs. We include only five solutions for each category.
Categories: Legal, People + Operations, Technology Stack, External
Legal Compliance:
– Workers Co-op: The downside is that it is difficult to find lawyers who really understand DAOs.
– LCA: Allows a two-tier system for investor classes.
– LLC: Makes sense for small development shops, but it is difficult to have anonymous contributors.
– Series LLC: Easy to maintain, but the downside is neutrality.
– Speak with a lawyer sooner rather than later when you really need one.
People + Operations:
– Compensation structure: A combination of Coordinape and Sourcecred is used for compensation splitting. This is slower but more decentralized.
– Recruitment and retention of talent: Attract more newcomers by requiring everyone in the community to take on the responsibility of guiding and training newcomers.
– Establishing culture: Encourage more 1:1 interactions (e.g., Donut on Slack). It is very important for people to get to know each other.
Technology Stack:
– Custom CRM, and invoice https://smartinvoice.xyz/
– Utopia / Gilded Finance
– Discord, Gnosis, Lettucemeet, Airtable, Notion, Snapshot
External:
– A few people are responsible for managing the bridge between work groups, personnel, and the public. Transparency is important.
– If you are an open-source, community-driven project, be completely transparent.
– If you are building a product, spend a little less time on transparency.
– Balancing transparency with operations is key, depending on what you are building. Making memes for DAOs can also help retain and recruit talent.
In conclusion, we hope this helps operators of all DAOs and DAO tool builders to design better solutions for decentralized coordination.
This article is reprinted from Lao Yapi. Our company publishes or reprints the above content, maintains neutrality on the statements and opinions in the article, and does not provide any express or implied guarantee for the accuracy, reliability, or completeness of the content. Readers are advised to use it for reference only and to assume responsibility themselves.
