The first generation of DAOs was a revelation. They proved that strangers could coordinate, govern, and build with shared treasuries and shared purpose. They showed the world what decentralized action could look like. But like any early species in a new ecosystem, they were built for an environment that no longer exists.

Today, the landscape has shifted. Players have moved on. Communities fracture and reform every day. New governance experiments are appearing everywhere—lighter, faster, more aligned, more equitable.

And whether we admit it or not:

Evolution is calling to DAOs.

This is not a warning. It’s an inevitability. And if approached with clarity and intention, it can be something profoundly hopeful.

Before we talk about evolution, it’s important to clarify what we mean by the generations of DAOs.

Gen 1 DAOs were the earliest organisms in the ecosystem—MakerDAO and a handful of pioneers who formed long before most people even understood what a DAO was. These communities were experiments in the purest sense, building foundational mechanisms from scratch.

Gen 2 DAOs arrived during the 2020–2022 surge, when DAOs became a movement. Hundreds of communities formed almost overnight, riding the cultural and financial wave of the bull market. Many of today’s legacy DAOs belong to this era.

Gen 3 DAOs are now beginning to emerge—the first intentional iteration in the cycle. These aren’t just DAOs formed in a frenzy; they are designed with reflection, lessons learned, and a focus on alignment, efficiency, and long-term sustainability. They represent the next evolutionary branch, not a reaction but an intentional creation.

Legacy DAOs do extraordinary work, but many are experiencing the same quiet symptoms. Governance becomes heavy. What began as fluid experimentation thickens into layered processes, committees, cycles, and rituals. Participation drops because the cost of participating rises.

Power concentrates. Even without malice, early whales, long-term holders, or entrenched groups become gravitational centers. Culture bends around them.

Incentives drift. Treasuries grow and priorities shift from building to protecting. Risk appetite collapses, replaced by “responsible stewardship” that too often looks like inaction.

Familiarity becomes stagnation. Programs persist long after their energy has faded because they are already part of the identity. Change becomes harder not because it is wrong, but because it is heavy.

And beneath everything, fear murmurs. Fear that new governance models—more efficient, transparent, and equitable—might outshine the old ones. Fear of replacement. Fear of irrelevance. None of this is about bad actors. It’s about the natural inertia of any institution, even decentralized ones.

But here’s the hopeful truth:

In nature, evolution never punishes old forms. It simply invites them to give rise to new ones.

The most powerful revelation we can embrace is this: new DAOs don’t need to be competitors. Different DAOs evolve differently. Some legacy DAOs will see new experiments as successors, carrying forward the mission with structures better suited to today. Some will treat them as partners, building alongside one another as peers in a wider ecosystem. Some will treat them as children, nurturing them into independence while learning from what they eventually become.

No path is inherently better than another. What matters is recognizing that evolution is not a threat — it is continuity.

Legacy DAOs hold vast treasuries, often built from early enthusiasm and market tailwinds. But treasuries cannot remain static in a dynamic landscape. They should not function as monuments to the past cycle — they should fuel the next one.

And so, a simple but transformative question emerges:

What if DAOs used their treasuries not just for grants, but for governance R&D?

Instead of trying to overhaul their own systems from within — a slow, contentious, and often impossible task — DAOs could fund new governance primitives, incubate micro-DAOs built around fresh ideas, support radically different organizational models, explore alternative identity, delegation, or incentive mechanisms, let small communities test what large communities cannot, and run evolutionary branches in parallel.

This turns the DAO into a self-upgrading organism, one that evolves through external experimentation, not internal conflict. Treasury deployment becomes a form of biological branching — generating variation so the DAO can later choose what works best.

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Right now, when a DAO wants to make a major change, the options are usually to do nothing and slowly decay, or push change and risk a hard fork, splitting community and trust. Hard forks are expensive, traumatic, and almost always reduce the vitality of both halves.

No community thrives by tearing itself apart to evolve. But if a DAO actively seeds new governance experiments, then every major change can be tested outside the main body before anyone is asked to adopt it.

This allows communities to avoid civil wars, avoid zero-sum political battles, avoid fragmentation, and avoid the identity crisis that accompanies forced reinvention. Instead, DAOs can evolve organically: Try many things. Watch what works. Adopt the best. Retire the rest. This is how living systems grow.

We’re entering a new phase. Players want new games. Builders want new incentives. Communities want new forms of governance that reflect who they are today, not who they were in 2021. And for the first time, we’re beginning to see real infrastructure capable of supporting this shift — tools designed not just to run a DAO, but to help many DAOs evolve in parallel, each exploring its own path without collapsing under operational complexity.

Projects like Flows.wtf, the work @rocketman and CObuild are doing across Farcaster and Zora, and governance frameworks like Dan Singjoy’s Fractal Governance model at edenfractal.com all enable competitive—but collaborative—parallel experimentation. They make it possible to deploy capital in ways that are efficient, equitable, and appropriately competitive, encouraging a diversity of solutions without incentivizing copy-cats. Alongside these frameworks, mature infrastructure tools such as Snapshot, Tally, Collab.land, and Colony.io now provide robust layers for voting, coordination, identity, and contributor management — capabilities that simply didn’t exist in earlier generations.

Nouns.build , for example, takes the complexity out of launching a DAO — handling the treasury, governance, and on-chain auction logic so communities can focus on building, not wrestling with infrastructure. It’s the sort of integrated infrastructure Gen2 DAOs never had access to, and it quietly expands the frontier of what new communities can attempt.

This is not a revolution. It’s an invitation. DAOs don’t need to defend their past. They can invest in their future. They don’t need to fear being being replaced. They can help give birth to what replaces them!

Rather than cling to the ground we’ve already gained. We can plant the seeds of what comes next.

Evolution is already happening. The question is simply whether DAOs want to resist it — or participate in it.

And the hopeful truth is this: The next era of decentralized governance will be shaped by the DAOs that choose to evolve together, not apart.

The first generation of DAOs was a revelation. They proved that strangers could coordinate, govern, and build with shared treasuries and shared purpose. They showed the world what decentralized action could look like. But like any early species in a new ecosystem, they were built for an environment that no longer exists.

Today, the landscape has shifted. Players have moved on. Communities fracture and reform every day. New governance experiments are appearing everywhere—lighter, faster, more aligned, more equitable.

And whether we admit it or not:

Evolution is calling to DAOs.

This is not a warning. It’s an inevitability. And if approached with clarity and intention, it can be something profoundly hopeful.

Before we talk about evolution, it’s important to clarify what we mean by the generations of DAOs.

Gen 1 DAOs were the earliest organisms in the ecosystem—MakerDAO and a handful of pioneers who formed long before most people even understood what a DAO was. These communities were experiments in the purest sense, building foundational mechanisms from scratch.

Gen 2 DAOs arrived during the 2020–2022 surge, when DAOs became a movement. Hundreds of communities formed almost overnight, riding the cultural and financial wave of the bull market. Many of today’s legacy DAOs belong to this era.

Gen 3 DAOs are now beginning to emerge—the first intentional iteration in the cycle. These aren’t just DAOs formed in a frenzy; they are designed with reflection, lessons learned, and a focus on alignment, efficiency, and long-term sustainability. They represent the next evolutionary branch, not a reaction but an intentional creation.

Legacy DAOs do extraordinary work, but many are experiencing the same quiet symptoms. Governance becomes heavy. What began as fluid experimentation thickens into layered processes, committees, cycles, and rituals. Participation drops because the cost of participating rises.

Power concentrates. Even without malice, early whales, long-term holders, or entrenched groups become gravitational centers. Culture bends around them.

Incentives drift. Treasuries grow and priorities shift from building to protecting. Risk appetite collapses, replaced by “responsible stewardship” that too often looks like inaction.

Familiarity becomes stagnation. Programs persist long after their energy has faded because they are already part of the identity. Change becomes harder not because it is wrong, but because it is heavy.

And beneath everything, fear murmurs. Fear that new governance models—more efficient, transparent, and equitable—might outshine the old ones. Fear of replacement. Fear of irrelevance. None of this is about bad actors. It’s about the natural inertia of any institution, even decentralized ones.

But here’s the hopeful truth:

In nature, evolution never punishes old forms. It simply invites them to give rise to new ones.

The most powerful revelation we can embrace is this: new DAOs don’t need to be competitors. Different DAOs evolve differently. Some legacy DAOs will see new experiments as successors, carrying forward the mission with structures better suited to today. Some will treat them as partners, building alongside one another as peers in a wider ecosystem. Some will treat them as children, nurturing them into independence while learning from what they eventually become.

No path is inherently better than another. What matters is recognizing that evolution is not a threat — it is continuity.

Legacy DAOs hold vast treasuries, often built from early enthusiasm and market tailwinds. But treasuries cannot remain static in a dynamic landscape. They should not function as monuments to the past cycle — they should fuel the next one.

And so, a simple but transformative question emerges:

What if DAOs used their treasuries not just for grants, but for governance R&D?

Instead of trying to overhaul their own systems from within — a slow, contentious, and often impossible task — DAOs could fund new governance primitives, incubate micro-DAOs built around fresh ideas, support radically different organizational models, explore alternative identity, delegation, or incentive mechanisms, let small communities test what large communities cannot, and run evolutionary branches in parallel.

This turns the DAO into a self-upgrading organism, one that evolves through external experimentation, not internal conflict. Treasury deployment becomes a form of biological branching — generating variation so the DAO can later choose what works best.

Subscribe to support more articles like this one on Paragraph

Right now, when a DAO wants to make a major change, the options are usually to do nothing and slowly decay, or push change and risk a hard fork, splitting community and trust. Hard forks are expensive, traumatic, and almost always reduce the vitality of both halves.

No community thrives by tearing itself apart to evolve. But if a DAO actively seeds new governance experiments, then every major change can be tested outside the main body before anyone is asked to adopt it.

This allows communities to avoid civil wars, avoid zero-sum political battles, avoid fragmentation, and avoid the identity crisis that accompanies forced reinvention. Instead, DAOs can evolve organically: Try many things. Watch what works. Adopt the best. Retire the rest. This is how living systems grow.

We’re entering a new phase. Players want new games. Builders want new incentives. Communities want new forms of governance that reflect who they are today, not who they were in 2021. And for the first time, we’re beginning to see real infrastructure capable of supporting this shift — tools designed not just to run a DAO, but to help many DAOs evolve in parallel, each exploring its own path without collapsing under operational complexity.

Projects like Flows.wtf, the work @rocketman and CObuild are doing across Farcaster and Zora, and governance frameworks like Dan Singjoy’s Fractal Governance model at edenfractal.com all enable competitive—but collaborative—parallel experimentation. They make it possible to deploy capital in ways that are efficient, equitable, and appropriately competitive, encouraging a diversity of solutions without incentivizing copy-cats. Alongside these frameworks, mature infrastructure tools such as Snapshot, Tally, Collab.land, and Colony.io now provide robust layers for voting, coordination, identity, and contributor management — capabilities that simply didn’t exist in earlier generations.

Nouns.build , for example, takes the complexity out of launching a DAO — handling the treasury, governance, and on-chain auction logic so communities can focus on building, not wrestling with infrastructure. It’s the sort of integrated infrastructure Gen2 DAOs never had access to, and it quietly expands the frontier of what new communities can attempt.

This is not a revolution. It’s an invitation. DAOs don’t need to defend their past. They can invest in their future. They don’t need to fear being being replaced. They can help give birth to what replaces them!

Rather than cling to the ground we’ve already gained. We can plant the seeds of what comes next.

Evolution is already happening. The question is simply whether DAOs want to resist it — or participate in it.

And the hopeful truth is this: The next era of decentralized governance will be shaped by the DAOs that choose to evolve together, not apart.