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  • George Samuels

The Rise of DAOs and the Tiny Home Movement: Two Trends to Watch in 2022

A look into DAOs and the tiny home movement being spurred across the globe, with a realistic look at the pros and cons of DAOs.

If you’re not familiar, DAOs stand for Decentralized Autonomous Organizations.

There’s been a lot of hype about them recently but, if I was to reference any past movements to help explain it, it’s like a combination of agile-scrum, holacracy, and co-ops, sprinkled with a desire for “decentralization” and democratic governance.

The latter piece is the kicker - although the original DAO was called a DAC (Decentralized Autonomous Corporation), most DAOs today are trying to use the term to push for democratic consensus-building.

Nothing wrong with it, just not what original DACs/DAOs were designed for. The “autonomous” part meaning that there was usually little human involvement required.

Democratic vs Decentralized

The problem with democratic consensus-building is that we know what happens when there are too many people involved - death by consensus. Bureaucracy overtakes action.

And this is what we find happening in many DAOs today → either too many discussions before decisions can be made, or no-shows of voters leading to less-than-desirable outcomes.

DAOs may be good when there are clear tasks and roles set ahead of time, but fall short with more complicated organizations and high levels of uncertainty. There are also potential legal issues with DAOs, since they essentially form a Partnership, but with all the liability (except for Wyoming, who mades the first legal DAO entity, giving them the same legal powers as a Limited Liability).

The idea of decentralization - or everyone having a say - is an alluring one. But the reality is that, even with this push for democratic decision-making within DAOs, you need to have:

  1. An educated populace

  2. Everyone needs to vote

  3. Votes need to be trustworthy

Even Plato outlined the pitfalls of democracy, stating that it essentially leads to demagoguery or dictatorship without an educated populace.

And democracies have elected leaders, which DAOs often try to avoid.

Within human groups, if everyone’s a leader, is no one a leader?

Tiny Homes

Thanks to a fellow subscriber, I came across an intersection of DAOs, blockchain towns, and tiny-homes.

There's a growing number of people exploring this realm:

For the uninitiated, "tiny homes" and the "tiny-house movement" is an architectural and social movement that advocates for downsizing living spaces, simplifying, and essentially "living with less."

Tiny houses on wheels were popularized by Jay Shafer. With the Great Recession hitting the world's economy from 2007 to 2009, the small house movement attracted more attention as it offered affordable, ecologically friendly housing, but it still only accounts for less than 1% of home-buyer properties.

However, with the 2020 pandemic, those numbers are shooting up again. And folks like Lee Pera are leading the charge with urban tiny-home communities.

Disconnected Communities

"Community" is labelled as a major key to success these days, especially in the crypto/Web3/NFT spaces.

A reason for this is that most local (physical) communities are so disconnected, that the next generation is used to seeking that 'sense of belonging' virtually.

It's far easier to connect with people from all over the world virtually, take on new identities, and even entertain escapist fantasies.

So it's no surprise that some are going in the other direction.

There's a good book titled Bowling Alone: The Collapse and Revival of American Community, which describes this phenomenon in more depth for American communities (but may apply to most Western or modernizing countries).

From Digital to Physical

This overlap of tiny-homes with DAOs is intriguing. Because it's almost a reversal of going all digital. And this might be connected to other trends we're seeing globally like reverse-migration.

Either way, both DAOs and Tiny Homes seem to be responses to mass shifts in culture due to the pandemic, remote work, and resetting economies.

It will be interesting to see how the two come together, and/or if they will work long term.

But after researching for this article, I'm definitely a fan of tiny homes!

PS. If you're wanting to dive deeper into this topic, from an actual expert on the subject, I highly suggest you check out Lee Pera's website.