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By
MIDAO
In the rapidly evolving world of Decentralized Autonomous Organizations (DAOs), innovative tools and platforms are emerging to address the complex needs of these digital communities. Two recent developments in the DAO space have caught the attention of industry experts: the launch of DeXe Network and Tally's new liquid staking governance protocol. These advancements promise to reshape how DAOs are created, managed, and governed.
In this article, we'll explore these new tools and their potential impact on the DAO ecosystem, drawing insights from a recent episode of the "Just DAO It" podcast. Hosted by Adam Miller, co-founder of Midao, with guest Arnold Almeida, founder of Lighthouse, the discussion provides valuable perspectives on the current state and future of DAO tooling.
DAOs have been around for several years, but the tooling to support them has sometimes kept pace with their needs. Adam Miller, reflecting on his experience in the space, notes:
"Looking back, I'm either unimpressed by how much progress has been made, or I'm not aware of the progress that has been made in the DAO tooling space, like for DAOs."
This observation highlights a critical gap in the DAO ecosystem. While many enthusiasts and entrepreneurs recognize the potential of DAOs, the need for more user-friendly tools has been a significant barrier to entry.
Miller emphasizes the crucial role that accessible DAO tools play in the growth of the ecosystem:
"Most people who want to start a DAO, either there's going to be a tool that helps them do it, or they're not going to start a DAO—they'll do something else."
This insight underscores the need for platforms that simplify creating and managing DAOs, making them accessible to a broader audience beyond those with technical expertise in smart contract development.
DeXe Network emerges as a promising solution to the DAO tooling challenge. Described as "an AI-powered, permissionless launchpad for building high-level Web3 products across different chains," DeXe aims to revolutionize how DAOs are created and managed.
Arnold Almeida offers his thoughts on the potential of DeXe:
"I think it's an innovation. Composing DAO tooling is very complex and probably cost-prohibitive for many people, which is why, in the last three to five years, there's probably only been a small handful of players who have been able to deliver on that promise well."
Almeida's comment highlights the significance of DeXe's approach in making DAO creation more accessible and affordable.
One intriguing aspect of DeXe is its incorporation of AI. Almeida notes:
"They're alluding to AI automation. That also signals this idea of a cybernetic organization but with a lot of turnkey solutions."
This integration of AI could automate various aspects of DAO management, further simplifying the process for users.
Almeida points out a key challenge in creating universal DAO tools:
"The way most organizations are structured, they're very diverse, and each has its objectives. As such, they might have different internal hierarchies that must be purpose-built for that organization."
This diversity in DAO structures underscores the need for flexible, customizable tools that adapt to various organizational models.
The discussion between Miller and Almeida reveals the intricacies of creating tools that can work across different DAO ecosystems. Almeida shares his experience with Lighthouse:
"Even when we did our analysis of the top 300 DAOs, for example, there was such a diversity in that small set, which makes it quite a challenge for an indexer like ourselves to create consistent tooling and deliver a consistent interface."
This insight highlights the complexity of creating universal DAO tools and the importance of platforms like DeXe that aim to offer customizable solutions.
Tally, a prominent player in the DAO tooling space, has introduced a new liquid staking governance protocol. This innovation allows token holders to stake in the Tally protocol and receive a Tally Liquid Staked Token that:
Miller emphasizes the novelty of this approach in organizational governance:
"I think staking is a good example of the kind of mechanism that I don't think existed before crypto or before DAOs in organizations, right? Like, Microsoft never said, 'Well, if you take your Microsoft stock and you stake it and you lock it up for a year, we're going to give you a discount on your next Microsoft purchase.'"
This comment underscores how DAOs are introducing new paradigms of organizational participation and governance that were impossible in traditional corporate structures.
Almeida offers his perspective on the potential impact of Tally's new feature:
"For the first time, we can still maintain voting power and effectively have a means of rehypothecating the token, which can then be used for additional yield. Now, that's very complicated, and I'm not sure how that translates to security laws or whatnot, but we've seen examples of this with Curve.”
This observation highlights the innovative nature of Tally's approach and the potential regulatory considerations that may arise from such novel governance mechanisms.
Composability refers to the ability to combine different tools and components to create more complex systems. In the context of DAOs, it means being able to mix and match various governance, treasury management, and other tools to create a customized organization.
Miller notes the widespread agreement on the importance of composability in the DAO space:
"It seems like everyone, or most people in the DAO space, probably agree on the importance of composability for DAO tools, right? Whether you're building a big tool with 50 parts, where maybe people want to pick and choose parts and bring in another part, or if you're just building a component, or a part, or a platform, or a layer, or whatever."
This emphasis on composability aligns with the approach taken by platforms like DeXe, which offers a library of components that can be combined to create custom DAOs.
Despite the consensus on its importance, achieving true composability in DAO tooling remains a challenge. Almeida shares his experience with Lighthouse:
"I wouldn't say it's fully composable, but so far, we have integrated with Snapshot, and we've done integrations with DAOs that leverage variations of the OpenZeppelin Governor contract. Even within that space, what we've actually seen is that there is such diversity in terms of how—even just like Snapshot—that's one tool, but Snapshot has this interesting feature called strategies, which means they can layer different ways based on the organization."
Given the diversity of existing systems and governance models, this insight reveals the complexity of creating truly composable DAO tools.
Introducing innovative tools like DeXe Network and Tally's liquid staking protocol represents a significant step forward in the evolution of DAO tooling. These advancements promise to make DAOs more accessible, flexible, and powerful, potentially accelerating the adoption of this new organizational paradigm.
As Almeida reflects:
"It's a new model, and I don't know what's going to come out of it, but it's an interesting experiment. I'm really excited to see what happens there."
As the DAO ecosystem continues to evolve, we expect to see further innovations in tooling and governance mechanisms. These developments will likely shape the future of decentralized organizations, potentially revolutionizing how we think about collaboration, decision-making, and resource allocation in the digital age.
The journey of DAO tooling is far from over, and platforms like DeXe and Tally are at the forefront of this exciting frontier. As more entrepreneurs, developers, and organizations explore the potential of DAOs, the tools, and platforms that support them will play a crucial role in determining their success and impact on the broader world of organizational governance and collaboration.
