Decentralized Governance Structures

Tarun Chitra provided an excellent description of when governance is needed within DAOs in his recent piece for a16z,

---------SIGNAL VS NOISE Social governance in DeFi applications is usually coordinated through online forums and Discord channels. Snapshot applications conduct "off-chain" voting before protocol changes are encoded on the blockchain. DeFi governance evolved organically but created a lot of noise because proposals, discussions, and votes spread acr... See more

DAOs work best when the governance burden related to curation, security, and risk can be reduced faster than the natural increase in coordination costs that accompanies the need to have members involved in voting on every decision made.