What Co-ops and DAOs Can Learn From Each Other

Although co-ops and DAOS are both collectively owned and co-determined organizational forms, there are some key differences. Primarily, cooperatives have one-member, one-vote governance. This means that people vote, not dollars. No single member of a cooperative can purchase more power than anyone else.

While it is possible for DAOs to emulate cooperative governance, it’s more common to observe the easier-to-implement governance pattern of one-token, one-vote, since verifying one’s personhood is still a nascent field in the world of blockchain. 

At the end of the day, the best framework for an organization may not be a choice between a cooperative or DAO model, but a blend of both. Incorporating cooperative values into crypto networks could take the form of a traditional cooperative that bootstraps its network through on-chain tokenized contributions. Alternatively, a DAO could decide to a... See more

The first three principles outline how cooperatives should function:Voluntary open membershipDemocratic member controlMember economic participationThe other four principles outline shared virtues and values:Autonomy and independenceEducation, training, and informationCooperation among cooperativesConcern for community 

From my experiences in the two spaces, I have noticed that DAOs tend to be better at enabling collective ownership at scale, even if their cultural understanding of the rights, responsibilities, and accountability associated with ownership is comparatively underdeveloped. And while cooperatives tend to be less successful in securing funding, they a... See more

Crypto networks and DAOs often use the concept of the “ownership economy,” an idea first articulated by venture capitalist Jesse Walden, as a kind of guiding philosophical infrastructure.

By learning what we can from the past, and looking forward to the future, we can create communities that embody the best of both worlds: effective, principled, well-resourced organizations working to build a more equitable, democratic, and collectively-owned future. 

Since DAOs are blockchain-based organizations that usually are not tied to a corporate entity, they leave a lot of room for rapid experimentation in organization and incentive design. Members can collectively source an idea, funnel collectively managed resources toward shared goals, iterate, and ship with rapid speed.

Co-ops often emerge as an attempt to respond to market failures and exploitative economic systems. They are designed to bring benefits to their members: good jobs, dignity, and collective agency. Because co-ops are motivated by serving members’ needs, rather than profit, they are often guided by racial and economic justice missions. There aren’t an... See more