DAO The Way Part 9

By xuanling11 | Crypto Learning | 16 Feb 2022

Let’s talk about leadership in DAOs. What leadership if you decentralized and led by no one? And how can you lead without a title or power that is pre-assigned to you?



Leadership is tricky and what decentralized leadership is like? Apart from centralized leadership that automatically grants you as a leader, decentralized leadership actually focuses on how to centralize people and gather them together to collaborate.


Leadership Dilemma


One of the misconceptions of leadership is that we think leadership is a problem solver. Leaders need to take care of everything and provide feasible solutions whenever needed. That is how we mix up with management. The leader only needs to point out the right direction when conflicts happen. They are working to prevent change that misguides the vision rather than deals with the complexity of the organization. Yet we constantly expected leaders to accomplish both directions of the company and resolve the complexity of the work.


Centralized Leadership vs. Decentralized Leadership


In centralized leadership, everyone is supposed to follow the single direction leaders point to. The problem is the team will find out if the direction is actually wrong after implementing and investing resources into it. There is no way to back out later but everyone is in the same boat type of situation.


Decentralized leadership, on the contrary, can discover the wrong direction at an earlier stage. Each separate small unit works its own way to reach the same goal until one or few reach the target. The problem of decentralized leadership is mainly on how to unite many separate individual nodes to eventually collaborate together.


4 Methods in Decentralized Leadership


According to Herman Vantrappen and Frederic Wirtz in their article When to Decentralize Decision Making, and When Not To, they laid out 4 methods to tackle how to manage in a decentralized environment.


  1. Responsiveness through immediacy.
  2. Reliability through compliance.
  3. Efficiency through syndication. 
  4. Perennity through detachment.


However, there are issues with each method.


Responsiveness through immediacy makes leaders burn out fast. Core members are likely over 24/7 to serve community members.


Reliability through compliance makes the community centralization with rules that carry out through core members. Rather than a decentralized community, rules and guidelines will roll out more to tighten the community interactions.


Efficiency through syndication makes conversation centralized. Everyone wants to share their thoughts and their information receiving asymmetrically compared to core contributors makes them fall out of the conversation loop.


Perennity through detachment makes decisions centralized. Eventually, it leads a community to either vote everything to become an indecisive voting loop or core members take over control to make decisions by themselves before voting and draft proposals with making decisions for the community to vote for which defeats the purpose of voting.


Proposed Solutions


The limited size of the community

Every DAO is trying to accomplish everything at once but forget its mission and vision. Instead of trying to grow out of the community and create more chaotic communities, try to limit members with quality building at first. Once community members fully emerge, then members can decide to grow out.


Produced Equal Opportunity 

Try to train members to become core members rather than creating bureaucracy. It is difficult to retain members if there are not enough tasks for each one to grow. Yet, inequality of growth will make each member with a different level of understanding which also jeopardizes decentralization.


Find a Syndication to Communicate 

Communication is a key to success. Use tools that fit into the community yet to provide syndication rather than asymmetric information. To help each member to catch up conversation is essential to progress into the next milestone.


Mindfulness Tasks

Creating tasks mindfully. Do not over expect to accomplish everything at once. Focus on member growth and development is a key to creating a sustainable DAO.

In Conclusion

Creating DAO as a space to foster ideas rather than another corporation to exploit everything you can.


Stay tuned for the next part of DAO thoughts!

Photo by Jehyun Sung on Unsplash
Note: the post was shared on multiple platforms here.

You can refer my previous article lists here
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2022 Prediction #3: Zero-Knowledge Proofs or ZKPs
2022 Prediction #4: Regulated Defi On-Chain KYC
2022 Prediction #5: Institutional Crypto Adoption
2022 Prediction #6: Defi Insurance
2022 Prediction #7: NFTs-Based Communities - DAO 1.5
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