Hi folks, Josh here from Metagov. I recently came back here to give an update on a recent grant, and after a lot of reading and talking to folks, I am just trying to come to grips with the crossroads that this community is coming to. To put it starkly: there’s a real possibility that Aragon might effectively dissolve or become very much diminished, with ~100 million USD flowing out of the treasury and likely out of the ecosystem.
As a researcher of DAOs and governance more generally, I find this situation super interesting. It’s related to similar challenges at DAOs like (the now-defunct) DXdao. But it’s also a bit sad for those of us who are fans of Aragon and believe in its mission.
I just wanted to pose two questions from the perspective of ethics—of what should be the case. Think of it as a request for comment, in the style of an Ethicist column.
What is owed to the mission, and what is owed to token holders?
The Aragon Association is a nonprofit, with a mission to build tools and infrastructure for DAOs and digital organizations. Like most nonprofits, it has a board that makes choices about how to execute that mission, along with a core team that does the work.
Usually, nonprofits are not in a position to be performing buybacks, much less at the scale of hundreds of millions of dollars.
But also, nonprofits shouldn’t rug their contributors.
And to speak the quiet part out loud, nonprofit boards are typically not invested in the financial performance of the organizations they steward.
So how do we balance these interests? What does AA owe to the token holders in Aragon DAO? Asked less often, but still important: what do token holders in a particular smart contract owe to the mission of AA, a Swiss legal entity? Does that smart contract have a mission, too?
I honestly do not know.
I do know that there is plenty of discussion on financial maneuvers and on legal constraints. But where has this community talked about what it owes to itself, about its values, about the legitimacy of the board and the legitimacy of the DAO? Why does Aragon exist? Aren’t these discussions, too, a part of governance?
What is the best possible governance that will serve the mission?
Aragon has a token, with all that entails. Plenty has been said about the limits of one-token-one-vote. Plenty more has been said about the limits of board-based governance. In the best-case scenario, these two systems can complement each other, as it does in certain Web3 projects and in many good-old-fashioned corporations.
There’s plenty of debate on the effectiveness of Aragon in realizing its mission (and, implicitly, of Aragon’s governance) over the past several years. To be fair, these debates go to the heart of not only this community’s present troubles but of the entire DAO ecosystem’s troubles—and its potential. Great tech doesn’t usually get built without years of failure and many, many pivots.
For people who build DAOs because they believe in digital and collective governance, the question is not “do DAOs work” but “how can we make DAOs work in the future“. For the people who built Aragon because they believed in its mission and vision, the question should not be “does Aragon work” but “how can we make Aragon work in the future”.
One last thing. In my role at DAOstar, I nominally represent the DAO ecosystem. And the dissolution or diminishment of Aragon would be bad for the ecosystem. It would be bad for DAOs. And if that is what is at stake, then I think the whole of this ecosystem should be here.
We should say something.
