MOST DAOS DON'T WORK

Summary from the TLDR Crypto newsletter

Most DAOs falter because they lack clear goals, aligned incentives, and functional hierarchy. Token rewards and airdrops often optimize for short‑term or legal risk offloading rather than sustainable governance. For example, Compound drifted into mere treasury management after costly, low-delivery hires, while Aave retained strong team leadership, implemented revenue sharing/buybacks, and kept execution tight, and Lido's dual governance lets stETH holders delay/veto proposals at 1%/10% thresholds. Uniswap's split between DAO, Foundation, and Labs enabled $145M in UNI spending and triggered a delegate resignation, and Arbitrum's hybrid model funds outside managers as Offchain Labs' Timeboost has already sent $2M+ to the treasury. Emerging “BORGs” mix legal entities with automated, onchain processes, emphasizing the broader point that decentralization should be applied where it fits, not by default.