Alright, Tally just raised $8 million in Series A funding. Great. More money flowing into the DAO space. So let’s not break out the bubbly just yet. We need to ask ourselves: who is really going to benefit from this cash injection? Are we really democratizing things, or just oiling the path for the crypto oligarchs?

Democratizing DAOs, A Noble Goal?

As Tally pitches itself, they are a DAO infrastructure provider looking to help democratize on-chain governance and make it more efficient. And as they continue to scale their technology and support more DAOs, Sounds fantastic, right? A world where decentralized insolvent organizations trump nation-states, where power is in fact distributed. The CEO is painting a beautiful picture.

DAOs have a voter participation problem. It's abysmal. The apathetic majority of token holders never votes, so these decisions are often made by a minute, self-interested minority. Tally even uses CompoundDAO’s goldCOMP fiasco as a poster child. So, are we really addressing the issue at hand, or just creating a more aesthetically pleasing sandcastle on a bed of unstable sand?

Think about it this way: it’s like building a beautiful, state-of-the-art voting booth but nobody shows up to vote. What's the point?

Tally's solution? Staking mechanisms to reward active governance participants. Stake your tokens, obtain tLSTs, accumulate passive yields, continue to hold voting rights. In theory, that's a solid incentive. This is because this system rewards the people who have the most tokens. Because of this, they have even greater incentive to get engaged. Isn’t that just doubling down on the power structures we’re all used to? It’s the worst kind of corporate welfare—like giving rich people more votes, but at least they’re not getting paid to do it.

Institutions Arriving, A Double-Edged Sword?

Tally is betting big that enterprises and other large organizations that build on shared blockchain infrastructure will need to govern—and want to govern—their infrastructure.

On one hand, institutional involvement might lend the kind of legitimacy and stability that DAOs desperately need. Now, picture this — adorable, smart rising stars paired off with these larger boats, with their industry knowledge and firepower. On the flip side, do we want financialization 2.0, just on the blockchain and with a different feel? Is that the future we envision for DAOs, to become a playground for rich institutional investors? Because they have their own agendas.

Tally aims to advance decentralized governance. That's their stated goal. The recent and rapid influx of institutional capital sure has the potential to corrupt that initial vision. We need to be vigilant.

Tally’s CEO, in a separate conversation, has a vision for crypto as a core primitive for organizing new orgs — not just those within the crypto space itself. This is where the “unexpected connections” really starts to work its magic.

Crypto Beyond Finance, a Realistic Vision?

Think about the potential applications. Picture DAOs helping to govern a community garden, a local public school, or even a small town. Now picture that same world, where these decisions are made collaboratively, openly, and democratically. That's the promise of DAOs.

In order to do that, we need to solve the underlying problems of voter indifference and information imbalance. Second, we must tackle the imbalance of power in our ecosystem. Tally's $8 million could be a step in the right direction if it's used to build tools that truly empower the average token holder.

Or will the crypto elite instead just claw back their power? Or are they building a gilded cage and pretending it’s a decentralized paradise. Time will tell. We need to be asking these questions today, before it’s too late.

The answers will determine the future of DAOs, and maybe even the future of organizations as such.

Ultimately, Tally’s raise is a good thing or a bad thing depending on how one chooses to view it. It is a tool, and like any tool, it can be used for good or evil. It's up to us, the community, to ensure that it's used to build a truly decentralized and democratic future, not just another playground for the rich and powerful.

Here are some questions for you, the reader:

  • How can we ensure wider participation in DAOs?
  • What regulations are needed to prevent institutional capture?
  • How can we make DAO governance more accessible and understandable for everyone?

The future of DAOs, and perhaps even the future of organizations themselves, depends on the answers.

In conclusion, Tally's raise is not inherently good or bad. It is a tool, and like any tool, it can be used for good or ill. It's up to us, the community, to ensure that it's used to build a truly decentralized and democratic future, not just another playground for the rich and powerful.

Let's hold them accountable.