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DAO Strengths
Self-ownership leads to increased passion
Flexibility and malleability
Skin-in-the-game
Creative signal creation and propagation - ideas flow more freely
Protections provided by smart contracts; reducing counter party risk
Lower friction and barrier to entry
Less coersive
Rapid iteration on organizational and financial structure
More autonony, self responsibility and less victimization
Regulatory arbitrage
Contracts can be enforced on chain
Decentralization of decision making process
Scale powerfully with network effects
DAO Weaknesses
Lower coersion can lead to less accountability and control of accountability
No guaranteed accountability
No rulebook, lack of established process and model
Information asymmetry, contributors are often at a disadvantage in information compared to leadership
Hard for DAOs to interoperate because of lack of shared process and structure
No single person who is responsible or has the onus to take action
Sybil attacks
Shared creative vision can lead to a dilution of that vision
Friction to achieve consensus
Necessity to achieve consensus
So many of these weaknesses are engineering problems that stem from the lack of rulebook, process and models
DAOs often don’t have a specific desired outcome or mission
Lack of legitimate structure
Distributed liability
Contracts cannot be broken
Hyperfinancialization of governance
Corporation Strengths
Coersive efficiency - you can be easily fired if you don’t produce
Formalized structures
Well known organizational models, process and rulebooks
Lots of capital and access to capital
Explicit dictators - leadership is codified
Rigid effective hierarchy
The dominant human organizational technology
B2B Corporations easily interoperate
Clarity of expectations and requirements
Clear and consistent rewards
Ability to interoperate easily with current legal structures
Limited liability
Personhood
Can breach contracts
Corporation Weaknesses
Legal and regulatory capture
Highly coersive - you are often under constant threat of being fired
Can have their contracts breached
Monopolization; economies of scale lead to widening wealth gap
Centralization of decision making process
Rivalrous internal nature of corporations leads to undesired behavior
Opacity in many ways
Near-sighted and tunnel visioned on short term profits
Always have to grow
Soul crushing
Concentrates benefits to fewer and fewer people and entities
High employee turnover; low benefit to staying in place
Complacent spirit; low innovation