With the DAO vs equity drama playing out (Aave DAO / Labs being the latest example), I want to share my own disillusionment from the past 12 months of trying to bootstrap a DAO - the @pwndao.
It's been a year since we launched it - and truth be told, we launched it too soon. I promised an arbitrary deadline to early supporters, and instead of doing the less time-consuming but psychologically harder thing (renegotiating), we "delivered" on time. That was a mistake.
What was supposed to become a truly cryptonative credit union - a DAO leveraging its treasury on the very protocol it governs, using PWN features to the fullest - slowly became a burden. And, in hindsight, it also came with the faint smell of decentralization theater. Don't get me wrong: I still believe in DAOs and I'm proud of the DAO structure we built. But we should have put most of that effort elsewhere - into the product and business development.
Doing things the "right way" isn't always the right move
*Note: by right here I mean with integrity, without fake hype, KOLs or paid for liquidity deals - sure some people will think that's exactly the right way to do it, but it's not the right way for where I come from.
We didn't rush it. We approached this with real engineering rigor. We didn't just copy-paste, we built a contract structure based on AragonOSx, with several custom extensions including:
- Fast-track protocol gov decisions via Stewards
- Ultimate veto right of Token voters
- Included dilution for passive token holders (if you don't vote you get diluted)
We tried to do things the "right way." We didn't do an ICO. We didn't rush an airdrop. We observed, learned, and moved cautiously. We onboarded early contributors and 30+ amazing angels. We published a fresh whitepaper for the DAO alone. We set up a forum. We created bots to notify people about upcoming votes. We built our own interfaces for "staking" and voting. We launched a non-transferable token to stay compliant (which actually gives us more optionality now).
None of it solved the core problem.
Token holders still didn't care. Vast majority didn't proactively engage with any subject we raised as a collective. Out of the 30+ angels and 25+ team members who received token allocations, only a handful participated in decision discussions - and mostly only when actively chased. The collective-mind just didn't occur.
One of the more painful moments for me was hearing a developer on payroll say: "But I contribute to the DAO with my code. I shouldn't be expected to take part in anything besides that". Right, devs did contribute code - however they earned a regular salary for doing that job. They would be fired if they didn't. Building a DAO is a very different beast than a day job.
It's supposed to be collective effort, collective decision-making, and collective responsibility. My expectation was that people with vested interests would contribute to decision-making by taking responsibility and bearing the accountability coming with it.
PWN's reality was that most directional decisions were initiated and made by me, and most people simply nodded along. Besides, if I didn't like a particular direction or an experiment I'd be the person to proactively stop it - decentralization theater at its best.
To be fair here, some directions were initiated by others too. But many of those faded as soon as the first real roadblocks showed up - the general issue was lack of ownership and willingness to go lengths to turn conviction into a reality.
Maybe I wasn't able to align incentives. But it's more likely there just wasn't anything the whole group cared about the way I did. Quite objectively, there might not have been anything real enough for many participants besides "a token I can eventually sell." I now realize I was trying to push the DAO idea - basically asking everyone to be a co-founder - on people who didn't want the responsibility which comes with it. I was trying to distribute founder's accountability to a group that didn't ask for it, and then being unhappy with the result. I don't blame anyone, I was stupid!
Did we try everything? Absolutely not!! That would be unrealistic and irrational. Let's keep in mind that the goal of a DAO rarely is the DAO itself (or the token). PWN DAO's goal was the lending product that was supposed to be governed and used by the DAO. Building a novel product is the core endeavor and building a DAO alongside it is another similarly hard and time-consuming effort.
So why now? A couple of weeks ago I ran an experiment: an attention litmus-test vote for a week. I posted it in PWN Discord and on the governance UI: https://governance.pwn.xyz/#/community-voting/proposals/1
This time I didn't chase people like usual.
Participation?
Zero.
Let's rip the band-aid off! At this point, it feels safe to call PWN DAO dead!
Lessons learned
- In short: don't start a DAO unless you already have one.
- Don't start a DAO unless you have the right principled people - people who see it as *their* chance to build something, not just a token they'll sell later.
- Don't motivate people by giving them tokens for time. Instead set shared goals, then giving people their fair share once the goal is reached. Let the people who don't understand the difference between their "salary job" and building a collective entity leave early - they'll otherwise weaken the culture and the mission.
- Even smart money is just money. It takes a lot more to get people excited and involved besides their money. That's also why DAOs with genuinely high voter participation deserve real praise.
Will I do this again? Maybe. Why not. I still believe DAOs are future global coordination engines. But I won't try to bootstrap one prematurely again. I might only attempt it once the flywheel is spinning fast already - product traction, real usage, real reasons to coordinate with a global collective.
What's next?
What comes next is boring. I'll keep building onchain mortgages, as a top-down company. No more decentralization theater. No more ideological alignment stress. Just pure focus on building something unprecedented with a fair shot at changing how mortgages work - something useful enough for people to pay for. Time to own it!