Strengths, weaknesses, opportunities, and threats for the future of decentralized organizations

This is a post on the Aragon One thesis series:


Strengths

  • Orders of magnitude cheaper to create and maintain
  • Eventually everyone could use it due to its global and programmable nature
  • Full assurance that the entity belongs to its stakeholders

Weaknesses

  • 51% attacks. A malicious majority can take advantage of a passive minority
  • Unlimited personal liability if participants are not pseudonymous
  • Hard to codify subjective human intents in code
  • Interaction with the traditional financial system

Opportunities

  • Arbitrage stupid laws that make capital allocation inefficient
  • Target countries where existing organizational and financial infrastructure is lacking
  • Target use cases where pooling resources from large, global groups makes possible things that would be impossible as individual, uncoordinated participants

Threats

  • Existing infrastructure may compete by making it faster and easier to run traditional organizations
  • Decentralized technology is still being built, and in the meantime some actors will try to shut down nodes and other centralized parts
  • Decentralized infra is still on its infancy

Targeting weaknesses

51% attacks

Solution: Aragon Court.

Revenue stream: Jurors need to stake ANT to work for the Aragon Court and earn fees. Demand for dispute resolution drives demand for ANT.

Human subjectivity

Solution: Aragon Court.

Revenue stream: Jurors need to stake ANT to work for the Aragon Court and earn fees. Demand for dispute resolution drives demand for ANT.

Unlimited personal liability

Solution: Liability shield.

Revenue stream: Unclear for SCoDA, one of the possible models for personal liability protection. For other kind of shields, there could be a liability DAO that does whatever other DAOs ask it to do (e.g. open a fundraising) in for a fee.

Onboarding

Solution: Great user experience. In particular, meta-transactions.

Revenue stream: A meta-transaction relayer could be run by the Aragon Association, and could make money for the Network. A subscription model could be implemented.

Interaction with the traditional financial system

Solution: Legal entity that acts as a proxy.


This post was a collaboration between

Luis Cuende, Aragon One

  • Luis Cuende

    Luis Cuende

    Co-founder of Aragon and CEO of Aragon One. Advisor to a few crypto projects that awake my curiosity

    More posts by Luis Cuende.

    Luis Cuende
  • Aragon One

    Aragon One

    Aragon One is a for-profit company that encompasses the foundational team working on the Aragon project. The company is currently established in Switzerland, although we want it to function as a DAO

    More posts by Aragon One.

    Aragon One