An onchain organization is simply one that uses smart contracts to conduct activities, like governance and finance. “Onchain” refers to the fact that a blockchain (like Ethereum), serves as the ledger of record for things like assets, permissions, and governance structures. 

Up to this point, DAOs (Decentralized Autonomous Organizations) have dominated the mindshare of onchain organizations. However, many DAOs are neither decentralized nor autonomous – and they often have great reasons for this to be the case. The industry’s early conception of the “right way” to run an onchain organization was too narrow. Onchain organizations is a broad umbrella phrase, including DAOs.

Just as the governance of our federal government must differ from the governance of a Fortune 500 company, the governance of a Protocol DAO must differ from a City DAO, a Network State, a Smart Company, and a Guild. The tools which they use will also differ. The optimal structure for an organization should be dictated by its purpose; there will not be a one-size-fits-all solution. 

In the years ahead, we will see mass proliferation of structures for onchain organizations. Some will closely emulate familiar structures, like a company or congress. Yet others will push the frontier of governance with methods to easily shift support (delegation), distribute power (quadratic voting), or leave (rage quit). It is in everyone’s interest to support many differing approaches and experiments. For the first time in history, humans can rapidly implement and stress-test new methods of coordinating with each other at unprecedented scale. It is only through experimentation and variance that we will find the most suitable organization structures for different use cases.  

This piece is designed to provide an approximate ontology of the current array of onchain organizations and define some key clusters with similar approaches and strategies. This also acts as a survey to include some of the most meaningful projects in each category.

Ontology of Onchain Organizations

While there are many ways to dissect the structure and attributes of onchain organizations, a few key characteristics stand out. Is the organization digital-first or is it oriented around a geography? Does it aspire to be entirely automated by smart contracts, or will it perpetually include human dependencies? Is the organization’s purpose primarily for building things, allocating capital, or aggregating humans with commonalities?

In the following sections, we will give many examples of these organizations and dive into each of the branches, from top to bottom.

Autonomous

The “A” of DAO stands for “Autonomous”, which means there is no surprise that there should be a category dedicated to autonomous (and autonomous aspiring) organizations. These are organizations that operate with an incredibly high degree of automation, facilitated by smart contracts, in such a way that all players are entirely aware of the rules of engagement and corresponding limitations.

Frequently, people use the phrase “gradual decentralization”, but this is also generally accompanied by “gradual automation” and the removal of human intermediaries in favor of smart contract execution.

While there are many types of entities that allocate capital onchain (also including investment clubs and grant councils, which we’ll see later), the protocols in this section are uniquely oriented toward autonomous allocation of capital, conducted by smart contracts.

Products & Services

Another category of onchain organizations is operational, meaning that there are substantial components of human decision making and coordination. Most of these organizations expect to remain this way in perpetuity, although some may eventually automate through the adoption of protocols. While many identify themselves as "DAOs", and embody the "culture" of web3, this cluster of organizations are often neither decentralized nor autonomous.

Although many of the sub-categories are likely self-explanatory, these are rough definitions for many of the operational onchain organizations:

• Products - usually teams of software developers building products. Examples include teams building tools for  fundraising (Juicebox), governance (Decent DAO, Raid Guild), and others

• R&D - teams who have  aggregated capital and choose which experimental project to fund. Examples include Vita (longevity science) and MoonDAO (software and space exploration)

• Service Guild - those who complete work for other teams, usually for cash, token, or equity compensation. Examples include dOrg, BD3, and Growth DAO.

• Talent Collective - An aggregation of people who may be well suited to help with a particular type of work. For example, LexDAO aggregates lawyers, Vector DAO specializes in graphics, UI and interfaces.

• Media - similar to traditional media companies, these are teams who publish writing, content, videos, or other media, and potentially share in the revenues. Coinage, for example, has owners via NFTs and is structured to issue dividends to members of the media organization.

• Professional Delegates - this is an emerging category of governance analysts who comment and submit governance proposals for large organizations, the largest DAOs often compensate these groups

• Mixed - some organizations touch many of the categories above. For example, Gauntlet has an advisory service, but also participates in governance and they build products. 
  

It is generally true that most of these organizations have pooled assets of some sort, generally in a multisignature wallet like Safe (formerly Gnosis Safe). These organizations may need tools for capital formation (fundraising, crowdfunding, donations, grants), for capital expenditure (payroll, billing, expenses, offchain expenses), and in many cases revenue generation (subscriptions, transaction fees, membership models, NFT models, invoicing, digital sales). 

Capital Allocation

Capital allocation simply refers to organizations whose primary purpose is distributing a pool of capital for a particular purpose – profit, impact, ecosystem development, or for collecting items. Capital allocation organization in this category are very operationally intensive and require substantial efforts from a core team to keep them functional. They have processes for aggregating research, deciding where to allocate capital, and the team is often compensated for their time and efforts (payroll).  

• Grants-  these groups usually have a budget given to them by a DAO and a mandate for them to achieve. These are often described as “subDAOs” or selected by DAO governance in some way.

• Investing - these are profit-seeking entities making strategic allocations of capital in teams and businesses. Some may be very centralized, others are democratic. 

• Collectors - usually collecting NFTs and/or artwork. Usually tokenholders vote with their tokens to make decisions, but there may also be some delegated responsibilities to specific individuals.

Interest Groups & Social Organizations

There are two more clusters of “operational” onchain organizations. They are often referred to as “Culture DAOs”, “Social DAOs”, “NFT DAOs”, “Affinity Groups”, “Interest Groups”, and other related phrases. These are loosely clustered since all of them have very different objectives and styles. Some are very specific, like Assange DAO, which raised tens of millions of dollars to support Julien Assange’s legal fees. Others are more broad, like Bored Ape Yacht Club (BAYC) including anyone who happens to hold the NFT. 

These groups may or may not have a treasury. Sometimes they hold events in person or digitally. 

Onchain Societies 

Onchain Societies have an important aspect of geography – there’s some kind of physical location. This may be a single site for a short period of time (Zuzalu), or it may be an ambition to build a new type of self-governed society with autonomy and political recognition, like Praxis. 

City DAOs & University DAOs

City DAOs are generally composed of many people in a specific geography. Activities may include events, meetups, conferences, and sometimes more. Many city DAOs are the primary organizations behind major events like EthDC (DC DAO) , Taipei Blockchain Week (BuZhi DAO), and Eth Denver (Spork DAO). 

They may or may not have permanent treasuries, their operations are usually a hybrid of onchain and offchain activities. Some have loose governance structures, others are very formalized. 

City DAOs are  also closely related to University DAOs. These may be simple clubs at universities, sometimes they may manage money, run an accelerator, host events, or build products. 

Key Attributes

There are a few important axes in which onchain organizations may differ. These are high-level attributes that will inform which kind of governance structure is most suitable and who the participants will (or will not) include. 

• Decentralized / Centralized

• Flat / Hierarchical

• Public / Private

• Permissionless / Permissioned

• For profit / Non profit 

• Tokenized / Securitized 

• Unregulated / Regulated

• Autonomous / Operational

• Fully Onchain / Hybrid 

• Anonymous / KYC'd

• Token Voting / Per-Human Voting
  

These categories are best established at the beginning to align expectations. These are not always binary factors or permanent traits. For example, many organizations start centralized, but have thoughtful plans to gradually decentralize over time. Some organizations may move more of their governance and finances onchain over time. These attributes will also inform key operational tasks like selecting smart contracts and choosing a legal structure. 

Summary

The structure of organizations themselves have undergone very little innovation since the advent of companies and democracies. Onchain Organizations, however, offer an enormous amount of organizational diversity in structures in attributes. There will be many more structures that evolve in the years ahead as groups continue to experiment with governance, mechanism design. Future research pieces will cover emerging models, like RevNets, Smart Companies, and BORGs.

Thank you to additional contributors and feedback from: Florian Glatz, Kevin Owocki, Austin Cain, Mohib Jafri, Dara Khan, Jon Hillis, Pruitt, Cole, Traub, Aashraya Rau, TommyJo, Tobalo, and more.