Why "Pop-up" DAOs could be the next big thing
DAOs are a useful mechanism and paradigm, but their longevity is difficult to maintain. Bringing together a collection of disparate individuals with conflicting agendas and interests, interacting with each other and the contract, is time-consuming and a huge challenge, and doing it indefinitely is daunting.
I've been playing with the notion of a "Pop-up" DAO as a thought experiment.
The idea is simple; instead of having a DAO that exists perpetually, you have a DAO that lives for a specific purpose or project. Once that project is complete, the DAO "pops" back out again and disappears.
There are several benefits to this approach.
First, getting people to commit to a specific project for a finite period is much easier than getting them to commit indefinitely. Second, aligning interests is more manageable when everyone knows the end is in sight. Third, and relatedly, decision-making is easier when there's an endpoint; you don't have to agonize over whether a particular decision will be good for the long term because there isn't one.
Fourth, a Pop-up DAO can be explicitly designed for the task at hand rather than being a generic vehicle that has to try and accommodate all possible eventualities.
A Pop-up DAO could be created with the specific intention of dissolving at some point in the future. It would have a clear mission and objective, and once that was achieved, the DAO would automatically self-destruct.
The beauty of this approach is that it would allow for a much more focused and streamlined operation without the constant monitoring and upkeep required by traditional DAOs.
In long-term DAO projects, there is a risk that the "mission" of the DAO could get lost or derailed as members move on to other things; fragmentation and scope creep are serious dangers. With a Pop-up DAO, there would be no such risk, as the DAO would cease to exist once the project was completed.
This approach has potential drawbacks; for example, a Pop-up DAO might not have the same level of skin in the game as a traditional DAO and could therefore be less committed to seeing the project through to completion.
A Pop-up DAO would not be immune to these risks, but the shorter time horizon would somewhat mitigate them.
There are potential downsides to this approach as well.
It's possible that a Pop-up DAO could become a mutated beast if the project isn't completed or if new circumstances warrant its continued existence. This could happen if the original objectives were not clear enough or if they turned out to be more complex than initially anticipated.
There is a risk that members could lose interest in a project once it's clear that there's an endpoint in sight. This is a danger in longer-term projects, where the sense of urgency and purpose can dissipate over time.
Relatedly, there is a risk that members could start to game the system once they know that dissolution is imminent. If people know that a DAO will only exist for a certain amount of time, they may be more likely to act in their self-interest rather than in the interests of the DAO.
A Pop-up DAO could be structured so that members are incentivized to act in the best interests of the DAO, even as dissolution looms.
For example, you could have a vesting period for rewards so that members only receive them after the project is completed; this would ensure that everyone is working towards the same goal. We could also have a system of "penalties" for early dissolution so that members are financially penalized if they try to dissolve the DAO prematurely.
The future of the DAO model is uncertain, but it's exciting; as we experiment with different paths, it's essential to be creative. The Pop-up DAO approach offers a unique way to overcome some of the challenges associated with traditional DAOs and could be a viable option for specific projects.