Organizations vs. Agora DAOs
Clarity makes a distinct differentiation between Organizations and Agora DAOs. While both of these structures may rely on information stored on the blockchain to operate, they do so in different levels of decentralization and automation.
All groups on Clarity begin as Organizations. Organizations can restrict particular actions on the platform to a selected group of admin users.
For Organizations that desire more decentralization, admins can be upgrade their Organization to an Agora DAO by deploying governance contracts on-chain using Clarity.
Both types of groups can use Clarity to poll their community, but the techniques to do so are slightly different.
An organization is a group of actors with a shared purpose and goal. Organizations can be web3 enabled by issuing tokens to their users. Using Clarity, organizations can poll their token holders to get feedback from their community.
However, organizations do not rely on smart contracts to execute passed proposals automatically. This means the desires of the community have to be executed manually by either a trusted individual or a multi-sig wallet.
Organizations can optionally limit creating and/or voting on proposals to only a select group of admin users.
Agora DAOs are a subset of organizations that are more decentralized.
Agora DAOs rely on smart contracts to manage themselves in a completely trustless and transparent way. Members of Agora DAOs are able to submit on-chain proposals that execute smart contracts automatically if and only if the proposal is passed by a community-wide vote.
By executing passed proposals automatically, Agora DAOs remove the need for trusting an individual or group of actors to actually carry out the DAOs decisions, hence their 'trustless' nature.
Any actor who holds the required number of tokens as determined by the DAO to participate in a given governance action has the permission to do so. For example, any individual holding more Governance Tokens for a DAO than the threshold to create a proposal as set by the DAO has the permission to create a proposal.
- Governance actions are free, as they do not require on-chain transactions.
- Restricting governance actions is useful to many early stage projects, or teams who desire more control over the direction of their project.
- Malicious proposals that passed are not automatically executed.
- Some members may not have the ability to participate in particular governance actions, no matter how many Governance Tokens they hold, depending on how the Organization is configured.
- Rely on trusted actor(s) to execute decisions of the Organization.
- Governance actions are not stored on-chain, so more trust is required when members want to self-verify votes are counted accurately.
- Any DAO member holding enough Governance Tokens is able to participate in any governance action, from creating to voting on proposals.
- No dependency on actor(s) to execute passed proposals.
- All governance actions are recorded on-chain, which allows trustless self-verification of the recording of votes.
- Governance actions require on-chain transactions, which cost users fees.
- Since anyone is able to submit proposals that will execute automatically if passed according to the rules of the DAO, malicious actors who are able to meet these thresholds have more attack vectors on the organization.