{"id":36007,"date":"2025-07-09T16:31:55","date_gmt":"2025-07-09T16:31:55","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=36007"},"modified":"2025-07-09T16:31:55","modified_gmt":"2025-07-09T16:31:55","slug":"is-there-a-future-for-daos","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=36007","title":{"rendered":"Is There a Future for DAOs?"},"content":{"rendered":"
\n

The cracks in DAO governance are beginning to show. In the span of a few weeks, two high-profile players\u2014Solana-based exchange Jupiter and NFT conglomerate Yuga Labs\u2014abandoned their DAO structures, issuing blunt statements about dysfunction and disillusionment.<\/p>\n

Jupiter cited a \u201cbreakdown in trust,\u201d<\/a> while Yuga CEO Greg Solano called Apecoin DAO<\/a> \u201csluggish, noisy and often unserious governance theater.\u201d<\/p>\n

While hundreds of DAOs still operate across crypto with thousands of participants, questions are being raised over whether DAOs, once the beating heart of crypto\u2019s decentralization dream, can flourish in this cycle.<\/p>\n

DAOs, decentralized autonomous organizations, are blockchain-native governance systems that allow token holders to vote on treasury allocation, protocol upgrades, and more. In the last decade of crypto experimentation, they were heralded as the future of community capitalism. Now, their limitations seem to be catching up with them.<\/p>\n

\u201cI absolutely understand the frustration with sluggish, broken governance,” said Kollan House, founder of MetaDAO. \u201cThis is the problem with token voting.\u201d<\/p>\n

From Political Idealism to Tokenized Theater<\/h2>\n

Originally celebrated as a way to \u201cgive a voice to the voiceless,\u201d DAOs have often been criticized for being a legal and financial gray area. By issuing \u201cgovernance tokens,\u201d many projects found a way to circumvent securities laws, without delivering the accountability or utility those tokens promised.<\/p>\n

Today, CoinMarketCap lists 273 DAO tokens with a combined market cap of over $21 billion. But those numbers are misleading. Nearly 50% of that value is concentrated in just three tokens\u2014Uniswap (UNI), Aave (AAVE), and Bittensor (TAO). At the other end of the spectrum, 63 DAO tokens are worth less than $1 million, effectively dead-on-chain.<\/p>\n

Take Mango Markets for example. It was once a bustling decentralized exchange that notched more than 1,000 governance proposals. It now has zero activity after the platform shut down in February, but $19 million worth of MNGO tokens still exist \u2013 completely useless.<\/p>\n

A Broken Model?<\/h2>\n

DAOs were often criticized for \u201cgovernance theater\u201d\u2014in other words, for appearing to be decentralized and governed by the crowd, but actually being controlled or dictated by a small number of people.<\/p>\n

DAOs required large numbers of people to participate in order to be effective. But numbers were often lacking, leading to disillusionment. \u201cTo vote on anything, you need a quorum. But to reach quorum, you need incentives. And when you start incentivizing voting, you get mercenary participation. Everything works against itself from the start,\u201d House said.<\/p>\n

Joshua Tan is executive director of Metagov, a research group focused on self-governance. <\/p>\n

\u201cThere are reasonable questions about the value DAOs are actually providing,\u201d Tan, co-author of a recent report on DAO M&A, told CoinDesk. \u201cGrant systems are often inefficient. Governance can be a mess. Still, this doesn\u2019t mean DAOs are done. It just means they\u2019re changing.\u201d<\/p>\n

In Tan\u2019s view, the struggles of Jupiter and Yuga Labs are symptomatic of deeper systemic issues. But governance failures at particular projects shouldn\u2019t be confused with a failure of the DAO concept itself.<\/p>\n

Read more: Joshua Tan, Jillian Grennan and Bernard Schmid – The State of DAO M&A<\/a><\/em><\/strong><\/p>\n

\u201cIf you compare billion-dollar DAOs to billion-dollar public companies, sure, DAOs look inefficient,\u201d he said. \u201cBut so do most corporate boards. Governance is a cost center\u2014not a profit center. That doesn\u2019t mean it\u2019s dispensable.\u201d<\/p>\n

Not Dead\u2014But Mutating<\/h2>\n

Far from writing off the concept, Tan and House both see a bright future for DAOs\u2014albeit one that looks radically different. House points to futarchy, a governance model where decisions are made based on prediction markets, as a promising evolution. MetaDAO is actively building a fundraising platform rooted in that vision.<\/p>\n

\u201cWe\u2019re solving issues with liquidity, decision making and ownership,\u201d House said. \u201cThe goal is to build the organizations of the future from the start.\u201d<\/p>\n

Tan is focused on infrastructure\u2014developing standards for DAO mergers and acquisitions (M&A), governance tooling, and valuation metrics through Metagov and DAOstar.<\/p>\n

\u201cWe need to build muscles that TradFi has had for decades,\u201d Tan said. \u201cThat includes M&A workflows, legal frameworks, and robust metrics\u2014not just relying on TVL.\u201d<\/p>\n

The regulatory gray zone is another ongoing headwind. While some jurisdictions like Wyoming, Utah, and the Cayman Islands have built legal wrappers for DAOs, others lag behind. And even where structures exist, they’re often expensive and impractical for small teams.<\/p>\n

\u201cWe\u2019re still seeing two to three DAO registrations per week in the Caymans,\u201d Tan noted. \u201cThese are $50K setups. The fact that people are paying that much tells you DAOs still offer unique advantages.\u201d<\/p>\n

DAO Consolidation is Coming<\/h2>\n

Both experts agree: a shakeout is inevitable.<\/p>\n

\u201cWe\u2019ll probably end up with 50 to 100 vibrant DAOs,\u201d Tan said. \u201cJust like after the ICO boom, most will disappear. And that\u2019s fine.\u201d<\/p>\n

What remains will be leaner, better governed, and\u2014hopefully\u2014less performative.<\/p>\n

Tan sees a future where DAOs don\u2019t disappear, but merge into broader organizational strategies, particularly in the merging of TradFi and DeFi. DAOs could become tools in the corporate stack\u2014used when necessary, ignored when not.<\/p>\n

\u201cThe underlying tech, smart contracts, is here to stay,\u201d he said. \u201cNot everyone wants the \u2018movement\u2019 version of DAOs. But the infrastructure layer is decentralized. It\u2019s modular. Companies will choose what fits.\u201d<\/p>\n

What Happens Now?<\/h2>\n

A good governance system is invisible when it works\u2014and painfully obvious when it doesn\u2019t. That truism now haunts the DAO ecosystem.<\/p>\n

\u201cThe dream of community-led protocols isn’t dead,\u201d said House. \u201cBut we\u2019re still discovering the right way to build it. And failure is part of that.\u201d<\/p>\n

\u201cGovernance can\u2019t be optional. Without it, you get chaos. But that doesn\u2019t mean the system we\u2019ve built so far is the right one,\u201d Tan said.<\/p>\n

It remains to be seen whether more DAOs will follow Yuga and Jupiter in shutting down community governance, but one thing is clear. DAOs may be struggling, but they aren\u2019t dead, for now.<\/p>\n

Read more: What Is a DAO?<\/a><\/em><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The cracks in DAO governance are beginning to show. In the span of a few weeks, two high-profile players\u2014Solana-based exchange Jupiter and NFT conglomerate Yuga Labs\u2014abandoned their DAO structures, issuing blunt statements about dysfunction and disillusionment. Jupiter cited a \u201cbreakdown in trust,\u201d while Yuga CEO Greg Solano called Apecoin DAO \u201csluggish, noisy and often unserious […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-36007","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/36007","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36007"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/36007\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}