Meta-DAO: A Bold Experiment in Human Governance

Effective coordination and organization within human groups have posed persistent challenges throughout history. These difficulties often stem from conflicting interests, diverse perspectives, and limitations in communication and resource allocation. Meta-DAO emerges as a novel approach aiming to address these complexities by employing a unique blend of code and market mechanisms to govern organizational decision-making.

Addressing Human Organization and Coordination Challenges

Many organizations, from small businesses to governments, face the same challenge: how to ensure everyone involved acts in the best interest of the group.

Imagine a decision matrix with two axes:

• Global vs. Local: Does the action impact the entire organization or just the individual?
• Benefits vs. Costs: Is the action positive or negative for the organization and the individual?

Ideally, individuals take actions only when they predict the global benefit outweighs the global cost. However, humans often make decisions based on:

• Self-interest: Focusing solely on personal benefits and costs, neglecting the bigger picture.
• Conformity: Following the crowd, regardless of the action’s merit.

This is the core problem: designing an institution that encourages members to act like they’re following the ideal decision-making algorithm.

Think About It:

Have you encountered situations where individual interests conflicted with organizational goals? Consider examples like:

• A manager rejecting a beneficial project due to career concerns.
• Politicians prioritizing short-term gains over long-term solutions.
• Venture capitalists valuing conformity over potential returns.

Example:

You, a marketing manager, consider a controversial ad campaign. Success could boost your career and the company’s image, but failure could damage both.

• Global costs/benefits: Company reputation, sales, etc.
• Local costs/benefits: Your career advancement, image, etc.

By understanding the challenges, we can pave the way for a better solution.

Humans Are Bad at Working Together

People struggle to choose actions that benefit the whole group instead of just themselves. They might “loot” a company by taking a salary without working, for example.

Philosophers, governments, and even religions have tried to fix this for ages. Let’s see how:

1. Culture and Religion:

Imagine a tapestry woven from shared values, beliefs, and rituals. This tapestry, in its ideal form, guides individuals towards actions that benefit the collective good. Consider:

• Religious teachings: “Do unto others as you would have them do unto you” (Christianity) promotes fairness and cooperation.
• Patriotism: Devotion to one’s nation inspires individuals to contribute to its well-being.
• Social norms: “Respect your elders” fosters order and stability within communities.

However, cultural solutions have drawbacks:

• Rigidity: Traditions may hinder adaptation to changing environments, potentially slowing progress.
• Exploitation: Cunning individuals can manipulate cultural norms for personal gain.
• Evolution: Cultures can shift towards harmful behaviors, highlighting the need for constant evaluation.
• Limited understanding: Even if a culture emphasizes the greater good, individuals may not grasp how to achieve it.

2. Philosopher-Kings:

Plato envisioned wise, altruistic leaders — philosopher-kings — making decisions for the group. The logic:

• Wisdom: These leaders would discern the potential consequences of decisions.
• Altruism: They would prioritize the group’s well-being over personal gain.
• Centralization: Power concentrated in their hands would streamline decision-making.

While appealing, this approach faces significant challenges:

• Finding such leaders: Are truly wise and selfless individuals even attainable?
• Power corruption: Unchecked power inevitably leads to abuse and exploitation.
• Accountability: Who holds these leaders accountable if their decisions prove harmful?
• Historical failures: Examples like China’s Great Leap Forward under Mao demonstrate the dangers of unchecked power.

3. Aligning Incentives:

This approach revolves around aligning the interests of decision-makers with the group’s well-being. Here’s how:

• Centralized control: Power rests with administrators accountable to the broader group.
• Incentives: These administrators are rewarded for actions that benefit the group.
• Examples: Shareholders vote for corporate leadership, citizens elect representatives.

Incentive alignment fosters responsibility and promotes actions that benefit the group, but again, there are hurdles:

• Short-termism: Focusing on immediate gains can overshadow long-term benefits.
• Information asymmetry: Voters and shareholders may lack the knowledge to make informed choices.
• Manipulation: Self-serving individuals can exploit the system for personal gain.
• Incomplete alignment: Even with incentives, individual and group interests may not perfectly align.

The human coordination problem remains complex, and each proposed solution comes with its own set of challenges. In the next section, I’ll introduce Meta-DAO and why I believe it offers a novel and superior approach.

But before I do, consider this: are you satisfied with the current state of affairs, or do you, like me, seek a better way for humans to work together?

Unveiling Futarchy: Market-Driven Governance

Futarchy, proposed by economist Robin Hanson in 2007, challenges the notion of pure democracy by suggesting that speculative markets can outperform them in decision-making. Instead of elected officials or voting citizens, futarchy empowers the market to shape governance choices.

Hanson argues that participants in markets like stocks and betting platforms have a strong incentive to research and identify the outcome most beneficial to their interests. Based on their findings, they buy or sell, influencing market prices.

The Efficient-market hypothesis posits that prices in a well-functioning market reflect all available information at any given time. Consequently, these prices should represent the best possible prediction of future events based on current knowledge. Futarchy leverages this predictive power by utilizing market forces to guide its governance and investment decisions.

To the best of my current knowledge, Meta-DAO represents a pioneering example of an organization utilizing a futarchical governance system.

Meta-DAO: A New Way to Organize Humans

Traditional organizations have human leaders, from CEOs to politicians. But these leaders often prioritize their own interests, harming the group they’re supposed to serve.

Enter Meta-DAO, a novel organization controlled by code on the Solana blockchain, eliminating human biases and self-serving actions.

The Meta-DAO emerges as a novel “decentralized autonomous organization” (DAO) leveraging blockchain technology to experiment with innovative governance mechanisms. Unlike traditional DAOs where token holders directly vote on proposals, Meta-DAO takes a unique approach.

Here, every decision hinges on what the market deems the most favorable outcome for its native token, META. As the creator, Proph3t concisely summarizes the objective: “The goal of the DAO is to make number go up.”

Proph3t’s ambition extends beyond mere token appreciation. He envisions Meta-DAO as a transformative force, capable of “entirely reshape human civilization” and even “solve politics.”

As with any novel experiment, only time will tell if Meta-DAO can live up to its grandiose aspirations. Nevertheless, its innovative approach to governance certainly garners attention and sparks intriguing possibilities.

Here’s how it works:

• Members: Each Meta-DAO is made up of independent profit-seeking entities, like sub-DAOs focused on specific products or services.

• Decisions: Members propose actions through “improvement proposals,” automatically evaluated by an algorithm.

• Algorithm: This algorithm only approves proposals that increase the total wealth of the system, ensuring fair and objective decision-making.

• Estimating impact: To assess proposals, the system predicts their impact on each member’s value using “futarchy” principles.

• Futarchy: Investors speculate on the outcome of proposals by buying “convertible tokens,” whose value changes based on whether the proposal passes or fails.

• Market signals: The prices of these tokens reveal the market’s prediction of each member’s valuation under different scenarios.
• Transparent and objective: This market-driven approach provides clear and unbiased estimates of proposal impact.

Navigating the Meta-DAO: A Beginner’s Guide

The Meta-DAO breaks the mold. Unlike traditional organizations, it uses markets to make decisions, relying on a diverse team of “Futards” to keep things running. Buckle up as we explore the unique roles that make this organization tick!

1. Meet the Futards

• Analysts: These are the market mavericks, using reason and probability to guide the DAO’s resources. They trade, indirectly steering investments and project priorities. Think of them as cold-blooded strategists, compensated handsomely for their sharp minds.
• Entrepreneurs: Charismatic leaders unite the troops! They spearhead ambitious projects, rallying the team with a mix of analytical savvy, salesmanship, and product knowledge. A healthy dose of risk-taking is a must!
• Cyber-agents: Forget fancy titles; these individuals are the “boots on the ground.” They code, design, market, and forge partnerships, making the DAO’s vision a reality.

Remember: Everyone wears multiple hats in the Meta-DAO. Don’t be surprised if you find analysts moonlighting as entrepreneurs or cyber-agents! As the DAO evolves, roles may become more specialized, but teamwork is always the name of the game.

2. Making Decisions Through Proposals

In the Meta-DAO, decisions and actions happen through proposals. Let’s explore how these proposals are categorized:

Areas:

• Business: Proposals related to creating and managing products that generate revenue.
• Operations: Proposals supporting the Meta-DAO’s infrastructure and ensuring it has the right resources.

Scope:

• Projects: Larger initiatives involving multiple steps and potentially spanning a longer period.
• Direct Actions: Single, specific actions without the complexity of a project.

So, META-DAO have four types of proposals, each with its own template:

• Business Project: Launching a new product or significantly updating an existing one.
• Business Direct Action: Adjusting an existing product, like changing its price or marketing strategy.
• Operations Project: Setting up a new team, upgrading software, or securing partnerships.
• Operations Direct Action: Hiring a new staff member, allocating funds to a specific task, or making a minor system adjustment.

Here’s who can submit proposals:

• Project proposals: Usually submitted by entrepreneurs responsible for execution.
• Direct action proposals: Open to anyone in the Meta-DAO.

For drafting your proposal:

• Choose any document app you prefer, like Hackmd or Google Docs.
• Determine the proposal type based on areas and scope.
• Use the appropriate template based on your proposal type.

Remember: Proposals are the building blocks of Meta-DAO’s activity. So, craft your proposal clearly and choose the right category to ensure it gets the proper attention and consideration.

3. How You Get Paid

The Meta-DAO functions differently than traditional organizations when it comes to compensation. Let’s explore how project leaders (entrepreneurs) and contributors (cyber-agents) are rewarded:

Project Leaders:

• Budget Allocation: When launching a project, leaders propose a budget and decide how to distribute it among team members (cyber-agents). They can choose between hiring more individuals at lower rates or fewer with higher compensation.
• Long-Term Incentives: Aligning leader success with the Meta-DAO’s long-term health is crucial. Options include:
• Dual Finance’s options: Granting leaders tokens that vest over time, encouraging commitment and alignment with the DAO’s long-term success.
• Streamflow Finance’s vesting contracts: Similar to Dual Finance’s options, these gradually release compensation based on predefined milestones or timeframes.
• Performance-based payments: Rewarding leaders for achieving specific project goals.

Contributors:

• Immediate Payments: Promptly compensating contributors (cyber-agents) fosters motivation and efficient work. One strategy involves:
• GitHub issue bounties: Associating bounties with tasks on GitHub and paying them out upon completion, ensuring clear deliverables and swift rewards.

Operations Compensation:

• Future Implementation: Currently, the Meta-DAO doesn’t have a formal compensation system for operational tasks. However, it recognizes the value of contributions and plans to establish a retroactive system.
• Meta-DAO Points: Imagine earning points for each valuable contribution to the DAO’s operations. These points could translate into future compensation or recognition systems.

Remember: The Meta-DAO’s compensation approach is designed to incentivize individual success while aligning everyone’s efforts with the DAO’s long-term well-being.

4. Ready to Dive into the Meta-DAO?

Excited to take your first steps into the world of the Meta-DAO? Here are three easy ways to get started:

• Join the Discord:

The Meta-DAO’s vibrant community hums on Discord. This is where discussions, ideas, and collaborations unfold. Simply join the server, listen in, and soak it all in. You’ll gain valuable insights and connect with fellow Meta-DAO enthusiasts.

• Engage in the Markets:

Some influential members prefer the quiet power of the markets. They trade Meta-DAO assets, indirectly shaping the DAO’s direction and priorities. If you’re a strategic thinker with a knack for market analysis, this could be your path.

• Contribute Your Skills:

The Meta-DAO thrives on contributions! Did you design a stunning interface, craft a compelling social media post, or write an insightful tweet thread? Share your talents! Remember, the DAO values contributions in various forms, and you’ll be rewarded for adding value.

Remember: There’s no one-size-fits-all approach to entering the Meta-DAO. Choose the path that resonates with you and start exploring this innovative way of collaborating and making a difference!

Concluding Thoughts

Meta-DAO offers a unique and promising alternative to traditional organization structures, driven by code and collective interests, not human biases. Furthermore, Meta-DAO’s governance structure deviates from conventional DAOs. Instead of relying on direct votes by token holders, it leverages the mechanisms of order books, a fundamental element of stock and crypto exchanges.

Within Meta-DAO, each proposed action triggers two distinct markets: a “pass” market and a “fail” market. Supporters of a proposal would buy META tokens in the “pass” market, driving its price upward, while simultaneously selling tokens in the “fail” market to exert downward pressure. Conversely, opponents would engage in the opposite strategy.

After a predetermined period, the market with the higher META price dictates the outcome. Unsuccessful market trades are automatically reversed. This system essentially allows traders to collectively determine the course of action considered most beneficial for the DAO’s token value.

Meta-DAO’s founder, Proph3t, draws an analogy to a “philosopher-king” governing body, stating, “We’re a philosopher-kingdom where the philosopher is the market. But the philosopher is not trying to increase our happiness, just our wealth.”