The downside of a dao

In the short time I’ve been reading this forum actively I noticed the downside of a DAO. I think many things which are voted upon are useless, like removing a collateral which is not producing enough surplus. This is not such a critical thing to need everyone’s attention.
So I think for each set of actions we should just choose someone responsible to take care of it instead of putting up a vote. Like how you would pick a team for running a website e.g. someone in charge of frontend, backend, security etc…
Like i see it perfectly fine that @SebVentures just chooses how much resources to allocate to something in the RWA area, he can of course talk to other team members but it’s just much cleaner that there is formal person in charge of something and others won’t waste their time arguing and pushing the changes back in time.
I want to note that i’m fairly new and this might be a very bad take! I’m just saying what i’m observing.


Don’t forget that you are empowered to propose to change anything. If you see process that is inefficient then design a better process and propose it.

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I’m not experienced enough to do that! But i’m sure people can get tired of writing formal proposals/signal requests to change things! Specially when they are most likely more knowledgable than people who are voting on their proposal!
All i’m saying is maker can benefit to move to a lesser of a DAO. Choose certain people based on their contributions in the past in charge of certain things which they regularly deal with. Leave very global decisions to the DAO and make votes for them.

Neither am I. Most of us are not. And most of us do not see the depth of the processes, especially the possible consequences. And while most of us are open to new information and new insights, it requires an investment of energy that most of us cannot sustain over the long term, because most of us do not do it for a living. But the goal is to get most of us actively involved, because that’s what makes the DAO what it should be. So go ahead if you have ideas.


I’m a big believer in empowerment. If we are electing people to do jobs within the DAO (and giving them a budget), getting out of the way and allowing that to happen is productive. Let me do my job and let me count on others to do theirs. When someone or a group doesn’t perform, the community can vote to remove them.

It’s another form of delegation that I will be actively promoting, and implementing, for the CES Core Unit.


I think the beauty of a DAO is not just the decentralized nature, but the fact that the contractual obligations of different employees (such as core unite facilitators) can be implemented through code.

I think the ultimate solution to the problem you addressed revolves around “streaming power” to employees. You allow the MKR voters to delegate decision making power with the ability to diminish it at any time, or cut it off all together. This gives some level of autonomy to employees while still having MKR voters be indirectly in charge. Currently, this is not being done in MakerDAO. There is no ability to stream funds to core units, or “stream power” to the different employees. I am currently researching these topics to solve the problem you proposed.


So with a DAO that doesn’t have a legal entity, there are no contractual agreements. Any time there is an internal political regime change, there is no guarantee any previous arrangement will be honored. I will direct you to the current P1-DROP debate as an example.

Good news is that we have this at the highest level (vote delegation). For the first time, I’ve actually seen people discussing the delegation of real power to units/parties at lower, more circumscribed levels. Unsure whether that’s an idea that will take off or not.

While Maker doesn’t stream power, it does actually stream funds to most core units. The balance accrues and is taken from the Surplus Buffer when that core unit calls for their balance.

Hope that helps! Glad to see you engaging with the community so much, too!

Can someone from @GovAlpha-Core-Unit also make sure @colby gets signed up for SourceCred (if he isn’t already)?


So, by this, I did not mean a contractual agreement enforced by law. I meant a contractual agreement forced by code (ie smart contracts). I was referring to granting the ability to grant permissions to certain people, and have them be enforced by the code.

I am familiar with the delegate system. When I said the following…“delegate decision making power with the ability to diminish it at any time, or cut it off all together”…I was referring to a more fine grained approach than delegates (an approach I did not introduce yet).

Yes, I am familiar with this. I was referring to a broader approach to streaming funds that gives the ability to do away with budget proposals in MIPs (but I did not describe this approach either).

Ultimately, apologies for being so broad in my reply. Based on what I said, I should have been interpreted the way you interpreted me. I was waiting to have a few more days to work on the ideas I hinted at in my post before posting them to the forum.

Also, not sure what SourceCred is.


It’s where Maker pays you money for posting on the forums :slight_smile:


Paper ain’t lying, you can see payouts for all the participants here:

Perhaps time to get back to the topic at hand though which is downsides rather than benefits of the DAO. Feel free to message me here (or on Maker Discord, same handle) if you need assistance enrolling or have further questions.

Thanks for bringing up this topic @sasa. There are a lot of tradeoffs made by decentralization, at least in the forms we’re seeing so far they tend to trade off efficiency for lack of central authority. This manifests in many ways (like to your point debating/voting on topics less relevant to general parties), but the neat thing is we aren’t married to the current paradigm.

The protocol has the ability to designate decision making to authorized Multi-sigs, if we wanted to go down that path. Fairly easy implement on the governance side too. So if there are items you feel should be under the discretion of a select group of people, it might be worth reaching out to them and seeing if they’d be up to make the proposal/take on the responsibility.


DeFi goverance is definitely a work in progress. Maker will continue to learn and adapt its decentralized goverance, as will other DAOs.

Perhaps focus more on improving the governance of Maker as DAOs are quite new as compared to more traditional corporate entities? The modern corporate structure didnt evolve overnight.

Though the first modern corporation was founded in 1600, the East India Company, there have been many changes to corporation structures since then as they adapt to new challenges. And even the East India Company was based on centuries of prior corporate structures that stretch back to Roman times.