Exploring the rationale behind a DAO governance structure
In the 12th century, a group of French legal scholars known as the Glossators rediscovered Roman laws regarding incorporation by the state. A problem that had plagued Medieval Europe was that partnerships of any kind often ended when one party died as there was no structure in place to carry on the institution past the proprietor’s vision. The Glossators realized that this had already been solved centuries earlier by the Romans and through their work, a legal structure was put in place that would help institutionalize partnerships that otherwise would have simply dissolved upon death.
For centuries, codified under Lex Mercatoria of the common law of the era, mercantilism dominated Europe as both a corporate structure and also a key component of economic theory at the time. Defined by state sanctioned monopoly, mercantilism functions based on an approach of treating most markets as commodities where a single entity is granted control of that sector of commodities. For years, this system allowed for great expansion and wealth accumulation, often helmed by private state sanctioned companies out which one grew so dominant as to remain in the public lexicon: The United East India Company. A multinational conglomerate, the VOC (its acronym derived from the Dutch name of the company) operated with impunity and was solely responsible for a number of spice monopolies and their associated trade routes. Due to their sovereign nature, the VOC was able to engage in brutal acts of conquest on their own without state intervention and while from the outside it appeared that the VOC’s mercantilism was benefiting the European continent, the reality was there was widespread human suffering without any recourse. The monopolistic status of the company meant that there were no other options available and the company would operate as long as the monopoly was state sanctioned. A better solution would be needed.
Rising from the ashes of mercantilism and birthed from the apprenticeship guilds of the 18th century, capitalism has remained the basis for most growing economies in some form or another ever since. Capitalism operates on the concept of free markets, and while what that looks like can change depending on legal and governmental structures, this fundamental of capitalism has always remained true: Freedom of the market, that is, the ability to enter into partnership and compete in the same space as another company, is essential to success. But capitalism is not without its own issues, the most glaring of which is the imbalance of power inherent to its structure: The incentives of the worker and the incentives of the company are always misaligned to the goal of capitalism since by employing others to fulfill your vision, you remove possible competition from the talent pool and consolidate the market. Additionally, purely free markets respond poorly to new and emerging world paradigms such as automation and economic globalization.
The Decentralized Autonomous Organization is not an economic terminus, rather it is a new corporate structure for a new age of capitalism, designed to fight the problems arising therein. If mercantilism solved the longevity problem of companies, and capitalism solved the market stagnation issue, then DAOs solve the consolidation issue. They handle automation well (it’s right in the name after all), and they can function equally well in punishing economic environments as healthy ones making them ideal for an ever globalizing economy. But most importantly, they grant another layer of democratization upon corporate entities where none has existed before. They allow workers to come and go as they please and break down barriers of competition and replace them with open collaboration — all while still maintaining a capitalistic freedom to build what you want, when you want, and with whom.
Of course, it was a natural extension for us to incorporate a DAO structure into GET Protocol. We are a technology provider, existing in an industry that is not only highly competitive, but also widely despised and known for anti-consumer tactics. We aim to change that and part of that change involves giving back to the community. We don’t think we have all the answers around ticketing — which is why as a DAO we will engage with our community to help find them. Imagine if you had a say in the business practice of your ticketing provider? It’s a new world and we are excited to be on the bleeding edge of it.
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