DAOs and Blockchain Games - Lessons from Alien Worlds

DAOs are blockchain-based systems for managing treasuries and representing group decision-making on-chain through stake-weighted voting

Key challenges include:

• Low voter engagement/participation
• Difficulty coordinating anonymous participants
• Legal/liability issues due to lack of formal structure
• Vulnerability to whale manipulation
• Community interest often fades after initial enthusiasm

Stake-weighted voting is necessary to prevent account splitting, but creates issues where a few large holders can control decisions

Successful DAOs need:

• Clear long-term purpose beyond speculation
• Engaged community
• Easy to understand resolutions
• Minimum voting thresholds
• Interface making governance accessible

Alien Worlds implemented DAOs as competing teams within their game:

• Players use NFTs to mine tokens
• Tokens can be staked for DAO governance
• DAOs receive inflation-based funding
• Weekly elected custodians manage treasury
• 3/5 custodian approval needed for decisions

DAOs work best when:

• Communities can self-organize effectively
• There’s ongoing activity and engagement
• Resolutions are clear and actionable
• Legal frameworks support operations
• Treasury management is transparent

The technology shows promise but faces human coordination challenges, especially when overlaid with crypto price volatility