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Why should I incorporate my DAO? In what geographic jurisdiction should I incorporate my DAO? What legal entity type should I choose?
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By
MIDAO
Imagine trying to run a global organization where every decision requires a vote, every voter needs technical expertise, and participation costs money each time. Welcome to the world of traditional DAO governance, where the promise of decentralization often collides with the realities of practical implementation. But a revolution in governance is underway, and it's transforming how DAOs operate at their core.
"Participating effectively in large DAOs can feel like a full-time job," observes Anthony, CEO of Aragon X, during a recent episode of the Just DAO It podcast. This candid assessment reveals a fundamental paradox: while DAOs aim to democratize organizations, their traditional governance models often create new barriers to participation.
The result? A system where those with the most time—not necessarily the most expertise or stake—end up wielding significant influence. "The most engaged people are those with time," Anthony explains. "Most of the strongest technical founders, product developers, and visionaries in our industry are building projects and doing things—they don't have time to participate in governance across the space."
This situation has sparked a wave of innovation in DAO governance, leading to groundbreaking new models that promise to maintain decentralization while dramatically improving efficiency and accessibility.
One of the most promising innovations discussed during the podcast is the gauge system. "A gauge is a methodology for voting," Anthony explains. "It was invented by Curve on Aragon, and it's quite a complex system. Basically, participants lock or stake their tokens into what's called a ve contract—a voting escrow contract."
The gauge system offers several unique advantages:
Jessica introduced another innovative approach during the discussion: "Methodologies like optimistic governance, where proposals maybe pass optimistically but there's an opportunity to veto... there's less overall strain and less overall demand on not only people's time but people's attention as well."
This model represents a significant shift from traditional governance approaches, reducing the burden on participants while maintaining security through veto mechanisms.
A significant advancement in DAO governance is the ability to operate across multiple blockchains. Anthony describes their latest development: "You can essentially start to have tokens across a plethora of different chains that are EVM-compatible. You can vote from those chains, and it gets aggregated, and then it executes—not just on one chain; it can execute across different chains as well."
The podcast revealed exciting developments in voting verification. Anthony discusses their work with Risk Zero: "By using Risk Zero in Aragon, you remove the need to bridge to vote. That's a big deal. You also allow any type of token to vote, which is super important."
This technological advancement addresses several key challenges:
The podcast highlighted how modern DAO frameworks are enabling greater flexibility. Anthony explained their approach: "We started from scratch and built a framework that separates the DAO logic from the governance logic. Now you have plugins where you can plug in different governance methodologies."
This modular approach offers several benefits:
The discussion also touched on the relationship between different governance tools. Anthony noted, "Snapshot X can actually plug into Aragon OSx, our DAO framework, and be a voting plugin. That gives people modular voting capabilities on a modular DAO framework."
One of the most significant innovations discussed was the concept of multi-body governance. Anthony explains: "You can have different types of proposals with different governing bodies. For example, a protocol upgrade might require input from a security council at first, and as the DAO matures, that council could be removed."
This approach mirrors traditional organizational structures while maintaining decentralization. As Anthony notes, "The people with the context and expertise in specific areas focus on those areas without being involved in everything else."
The podcast revealed how leading projects are implementing these models. "We're working with Polygon and other projects where only a specific council can put up proposals on-chain. Token holders, however, retain the ability to veto," Anthony explains. This hybrid approach balances efficiency with decentralization.
The adoption of innovative governance models presents technical challenges. As Anthony points out, "Where it gets very challenging is in creating a clean, user-friendly experience for DAO participants, voters, and the community. That's the real challenge—especially from a UI perspective and integrating with contracts."
Jessica emphasizes the importance of bringing communities along on this journey: "It's about being clear that you're on a journey, understanding the steps you need to take... and being honest about the trade-offs required at each stage."
The podcast revealed exciting possibilities for cross-chain governance. Anthony shares their vision: "Something else we're working on, which I think is going to be even more exciting, is using storage proofs and ZK proofs, particularly with Risk Zero, to enable multi-chain voting."
The discussion highlighted how governance standards are evolving. Anthony notes an important shift: "With storage proofs and ZK proofs, we remove that limitation. Now, ERC-20 tokens that weren't designed for voting can still participate in on-chain governance. That's a massive shift."
The evolution of DAO governance models represents a significant step forward in decentralized organization. As Jessica concludes, "It's about being all hands on deck to move the ball forward—to bring as much of this on-chain as we can and make it as robust and resilient as possible, as quickly as possible."
These innovations in governance models, combined with advancing technical capabilities, are creating new possibilities for DAOs to operate more efficiently while maintaining their decentralized nature. The key will be continuing to develop these models while ensuring they remain accessible and effective for the communities they serve.
