This should serve as a help to the legal subgroup and to wherever else applicable.
(work in progress)
DAOs are unique in their structure, not particularly because of the manner in which they are structured but how their structure is in fact a ‘hybrid sum’ of two well-known organisational structures – Electoral and Corporate, both of which try to organise two very unique and exclusive systems.
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In a simplified electoral structure (ignoring the legislative layer), the voting system is sybil-resistant, i.e. 1 entity = 1 vote. The imposition of 1-entity-1-vote constraint is necessary to ensure equal representation of all voters (human capital) which is desirable in a social framework. When looked at from human capital perspective, 1-entity-1-vote constraint encodes the principle that human capital is equally distributed among all participants; in other words, everyone is equally important. The resulting 1-entity-1-vote system then folds onto public governance through the elected legislative assembly.
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In a (simplified) corporate structure however, 1-entity-1-vote constraint is relaxed and voting system is sybil-agnostic since the end resource to distribute and maximise is not human capital but instead financial capital; this leads to replacement of ‘equality’ with ‘equity’ as a measure of contribution to the system. The further discretisation of total financial capital in ‘shares’ is then performed to distribute the financial capital among shareholders in a sufficiently fractionalised and equitable fashion. The resulting 1-share-1-vote system then folds onto the inner corporate structure through board of directors; in a loose sense board of directors are equivalent to legislators in an electoral system.
It appears that from a strict analytical/mathematical perspective, both systems are effectively the same except for a transformation that maps human capital to financial capital.
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DAOs, it seems, are a hybrid sum of the two since they intend to map the ‘end node’ in an electoral system (a voter) to an end node in a corporate system (share).
This comes with certain consequences; as pointed out above, the two systems – electoral and corporate – are similar but not precisely the same; therefore there is no direct 1-to-1 map between the end nodes of the two. They can in fact only be mapped accurately by a transformation that captures all the elements of human and financial capitals and their correspondences. The ‘forced’ hybridisation of the two to yield a DAO structure results in a bunch of paradoxes and loopholes that DAOs have only begun to unearth.
ENS DAO: (edits by @ENSPunks.eth )
(to be continued)
Original Post: On the nature of DAOs and their projection on Electoral & Corporate structures - DAO Infrastructures - Interplanetary Forum