Optimal autonomous organizations – by Curtis Yarvin
In 2022, the distributed autonomous organization is sort of a thing. DAOs exist. They are not a joke. But we can hardly say they are mature.
The 2022 DAO standard design has not been ruthlessly optimized by experience and competition we should not expect the current practice of the field to be in any way optimal. We should expect it to reflect the hopes of the players, not their experience.
Autonomous and sovereign are of course synonyms or near synonyms. When we draw up a contract for a DAO, we are drawing up a constitution for a government. In both cases, there is no power above the organization that can directly regulate it; and the organization has some power (mathematical or military) that can effectively defend it from all competing powers.
Contrast the DAO with the corporation, which is anything but autonomous while it does act independently like a sovereign, the corporation s process is regulated by the laws of a higher government. The sovereign can do anything it wants to the company; but the company trusts it to enforce contracts, not through math but through lawyers. Have you hired a lawyer lately? Lawyers are lovely people.
Yet the architecture of the corporation has been ruthlessly optimized. Big, ambitious companies approach and exceed the scale and ambition of many historical sovereigns. If there was a better way for Apple to organize itself to build phones, or SpaceX to build rockets, probably someone would have found this way.
Instead the basic design of the Anglo-American limited-liability joint-stock company has remained roughly unchanged since the start of the Industrial Revolution which, a contrarian historian might argue, might actually have been a Corporate Revolution. If the joint-stock design is not perfectly optimal, we can expect it to be nearly optimal.
While there is a categorical difference between these two types of organizations we could call them first-order (sovereign) and second-order (contractual) organizations it seems that society in the current year has very effective second-order organizations, but not very effective first-order organizations.
Therefore, we probably know more about second-order organizations. So, when designing a DAO, we should start from corporate governance, not political science.
There is a categorical difference between sovereign and contractual power. We have to adapt the corporate design for that difference while optimizing away any ancient spandrels from the paper age.
But at least we are looking for something optimal. Let us try to rederive it from scratch, in the context of a DAO: the optimal autonomous organization, or OAO.