DAO Challenges: Insights from the Governance Geeks Gathering at Devconnect Istanbul 2023

TL;DR At the latest Governance Geeks Gathering, a group of DAO governance operators and experts from MakerDAO, Safe, Aragon, Radworks and others came together to discuss 2024’s top challenges. In this post we’ll highlight the key takeaways. For a full recap of the workshop and its outcomes, see this Discourse post.

Radworks is a community dedicated to cultivating internet freedom and is run by a decentralized governance system that is powered by a vibrant community of users & builders. Designing a governance system that serves the project’s purpose while incentivizing its participants is an ongoing challenge we’ve faced through the various phases of our “transition to the DAO.” In the process, the Governance Committee, led by Abbey and Shelby, has done its best to harness input and learnings from the Radworks community and its surrounding ecosystem to guide governance design and facilitation.

Tapping into the extensive knowledge and experience in the vibrant DAO ecosystem is one strategy we’re employing to address our 2024 governance initiatives. We started hosting Governance Geeks Gatherings during Ethereum conferences, the first having taken place during ETHDenver 2023. The purpose is to bring together other high-context DAO governance experts and operators to discuss challenges, share ideas for solutions and resources, and identify other potential collaboration opportunities.
At the latest Governance Geeks Gathering in November 2023 alongside Devconnect Istanbul, we ran a workshop focused on capturing the challenges, concerns, and initiatives that governance facilitators and designers have top of mind going into 2024. We mapped out the main governance challenges we face in great detail, and tried to outline specifications to solution formation.

Click here for the full description and summary of the last Governance Geeks Gathering Workshop! At the bottom of this post, you will find a template of questions used in the workshop for anyone who wants to run through the exercises themselves.

Key Challenges & Our Approach
For anyone who’s been in the DAO space for a while, you may notice that the problems and challenges DAO governance operators face today are not much different than those we faced when the DAO space first started booming way back in 2019. The key challenges then, which included fairly distributing influence and power to a diverse set of stakeholders, building a healthy community where contributors are motivated and properly incentivized, and having the right accountability mechanisms in place to allow for permissionless work and contributions - remain the key initiatives for today’s governance operators and designers.
However, significant progress is being made. With each passing year, the complexities of these challenges are becoming clearer, and projects are continuing to experiment with new creative mechanisms and tools. Governance operators are identifying the root of problems more clearly, which will likely lead to better solutions for these challenges. Below is a summary of the top challenges governance operators from Radworks, MakerDAO, SafeDAO, and others are tackling in 2024.

1. Finding a Shared Purpose
A clearly defined purpose is one of the most important mechanisms for governance coordination, development strategy, and sustainability goals for Radworks & for all other decentralized communities and DAOs. Having a clearly defined purpose allows different teams/sub-DAOs to better coordinate their own strategies and initiatives to align with the shared DAO purpose. We noticed that many of the challenges we came up with as a group stemmed from the lack of a clear shared purpose/vision for the DAO. Not having a clear shared purpose leads to:

• Inability to design effective governance & incentive mechanisms
• Lower transparency on roles, responsibilities, and strategy alignment
• Difficulties finding “DAO/Product fit” (see Challenge 2 outlined below)
• Poor process for off-loading work to the community

Community participation is absolutely essential when curating a shared purpose in order to gain an understanding of the perspectives of diverse stakeholders as well as give the purpose legitimacy. For example, Radworks went through a purpose definition process earlier this year with the help of Apiary, an applied research company that advises teams on building better systems for collective, decentralized decision-making. This purpose lies at the core of all our governance initiatives.

2. Identifying DAO/Product Fit
DAOs need to create alignment across a variety of variables: with their purpose and with other factors such as their ecosystem and their community. Importantly, a DAO needs to align with the business and products it supports and is supported by. Without alignment between the DAO and its related product(s), both are distorted and momentum collapses. In the same way that a go-to-market strategy must have alignment with the ideal customer profile of a product, a DAO should seek to service the right community and compound its value proposition. To nurture this alignment, DAO leaders need to find and maintain clarity on the DAO’s mandate and relationship to the product.

In an effort to create clearer alignment between Radworks and the products it supports, the Radicle and Drips Orgs, the two products currently supported by Radworks, both produced MoUs (see Radicle MoU, Drips MoU) in addition to their 2024 Org proposals. These documents define the relationship between Radworks and the product Orgs. Specifically, they describe the grant funding terms and expectations for the Orgs’ 2024 operational funding and outlines expectations and processes for continued funding into 2025.

3. Designing for Accountability
Designing adequate accountability mechanisms that engage contributors while also providing the necessary checks and balances around decision making remains a key challenge. To understand and design mechanisms for accountability, you first need to clearly outline the roles and responsibilities of participants. They are often not well defined or may be highly subjective and dynamic over time. A few solutions that have started to become common practice across DAOs include milestone/deliverable-based payout systems, templates for proposals, updates, and objectives/deliverables, and frequent reflections on which processes are working and which are not. Particularly crucial is understanding the WHY behind success and failures to help calibrate for more promising future outcomes. Gathering more thorough community input, and doing so on a more frequent basis is one way we’re planning to build in more accountable governance mechanisms in the Radworks Governance Committee in 2024.

4. Sharing Knowledge
A recurring theme in many discussions was the frustration over the absence of resource sharing among DAOs, which often results in duplicated work, inefficient problem solving and overwhelmed DAO operators trying to solve similar complex problems in isolation. It would be immensely beneficial for all governance leads and operators in the DAO space to have more opportunities to collaborate by exchanging research, and sharing past experiences, resources, and best practices. While there may be challenges to sharing and exchanging governance practices and research between DAOs given variation in community makeup, products, and purpose, there was a strong and widespread eagerness to find more solutions for facilitating the exchange of knowledge and insights. The Governance Geeks Gatherings provide one way to do this, but solutions with more consistent tough points and concrete deliverables remain lacking between DAOs.

Next Steps
While our understanding of these challenges continues to improve, we as a decentralized industry are nowhere close to designing the perfect governance system. This will likely remain the case for years to come, perhaps in perpetuity. In the meantime, the Radworks Governance Committee, along with our colleagues at other leading DAOs, remain confident that our continued efforts to bring together fellow “governance geeks” at subsequent gatherings will continue to strengthen the overall ecosystem health and culture, bringing us ever closer to our goals of securing internet freedom for all. 🌱