All DAOs are not the same: distinguishing DAOs across various layers

Abstract

Decentralized autonomous organizations (DAOs) represent a new form of organizing, offering novel solutions to the problems of decentralized coordination and control of transactions. Leveraging the power of blockchain technology, DAOs facilitate large-scale production and exchange activities without the need for a centralized authority. The DAO architecture consists of two layers: the Layer 1 (L1) infrastructure at the core and the outer layers such as Layer 2 (L2) and Layer 3 (L3) applications at the periphery. The L1 infrastructure establishes the design principles of the DAO, while the outer layer applications provide myriad possible use cases to end users. Building on the idea of layers, I discuss Dr Jirásek’s (J Org Des. https://doi.org/10.1007/s41469-023-00146-w2023, 2023) case of Klima DAO, an outer layer L3 DAO that is both enabled and constrained by its underlying L1 base layer and L2 DAO infrastructure. It is crucial to distinguish between DAO layers to fully explore the broader implications, including the opportunities and challenges, of applying outer layer DAO designs.