Breaking down the concept of “autonomy” in DAOs

What is Autonomy?

Decentralized autonomous organizations, aka DAOs, have made headlines as one the innovative ways to pull resources, organize collective decision-making, and allocate assets without centralized control.  Defined loosely, a DAO has been described as a group of people with a shared interest and a bank account on the blockchain.

One key element that differentiates DAOs from traditional organizations is autonomy, which is the ability to make decisions and take actions independently, without external control or influence. Beyond the simplicity of this definition, autonomy is a rather complex and multi-faceted concept within DAOs. It is therefore important to break down the term to avoid ambiguity.

As already mentioned, autonomy is the ability to act independently. In the context of DAOs, it refers to the ability of a seemingly “decentralized” organization to operate without hierarchy or centralized authority. Every member of the group has a level of decision-making power, and collectively, decisions are made through a consensus-based process. However, autonomy can be further broken down into several sub-categories

Types of Autonomy in DAOs?

Referencing the book “Anarchist Cybernetics: Control and Communication in Radical Politics” by Thomas Swann, BlockScience founder and Chief Engineer Michael Zargham shared a rather interesting take on the subject in April 2022.

In a Medium post published by BlockScience, the research and analytics firm, asserted that “in practice, no person or system is ‘truly’ free from external influence.” Does this mean that the idea of autonomy is a mere façade? Although this may be subject to further debate, autonomy can be broken down into two categories – functional and political.

Functional Autonomy

The theory of functional autonomy was developed by American psychologist Gordon Allport in an attempt to provide an explanation for motivation. To Allport, functional autonomy entailed the ability of a person to perform independently the various tasks required in daily life.

“Functional autonomy refers to the degree of flexibility an individual or organization has to respond to complexity pursuant to its goal or function in an operational sense,” BlockScience wrote.

According to the article, functional autonomy deals with the internal operation of a system. It can be further divided into strategic and tactical autonomy. While strategic autonomy revolves around the freedom to set goals, tactical deals with the freedom of action allowed to achieve the set goals. For example, a DAO’s decision to raise $100k falls under strategic autonomy. However, choosing to raise the said amount from the sales of NFTs, crowdfunding, or merch sales is completely tactical.

To paint a clearer picture, BlockScience gave the example of a “self-driving” car. While the car has tactical autonomy to react based on its environment, the car does not have the ability to decide its destination. This strategic autonomy is reserved for its owner.

Political Autonomy

While functional autonomy focuses more on the internal operation of a system, political autonomy refers to a group’s authority to make its own decisions without interference from external individuals or organizations.

You’d agree that DAOs have performed quite well in this regard by token-gating governance processes. However, is this enough to assume that there are no external influences within DAOs? For once, autonomous organizations are made up of entities with diverse preferences. Balancer DAO’s eight-month-long battle with a yield-farming whale known as “Humpy” comes to mind.

Bearing this in mind, it is not out of place to discuss political autonomy in DAOs as a relationship between individual actors and collective actors, thus introducing the concepts of individual autonomy and collective autonomy.

Coordination amongst a group of individuals towards a shared purpose necessitates holding tension between Individual and Collective Autonomy […] For “decentralized” organizations, an effective pattern is to associate Collective Autonomy with Strategic Autonomy, where the group sets goals, policies and an initial social contract or constitution, and Individual Autonomy with Tactical Autonomy, where an individual can decide how to pursue those goals within any constraints being enforced by the organization.

Conclusion

Autonomy is undoubtedly a powerful and important concept in DAOs. Nevertheless, it is not without its challenges. For one, there is the potential for conflict and fragmentation within the organization. Since decision-making power is distributed among members, disagreements can arise, and consensus can be difficult to achieve. Furthermore, there is the risk of manipulation or external interference, often exacerbated if the DAO is reliant on external infrastructure.

To mitigate some of these risks, it is important for creators, builders, and communities within the space to establish clear and transparent governance structures early on, as well as create mechanisms for easy decision-making and dispute resolution. This may include inclusive voting mechanisms, penalties for malicious actors, and other tools that promote inclusivity, transparency, and accountability.

Check BTC Peers guide of the most promising crypto