Tally, one of the leaders in the DAO governance infrastructure space, has just closed $8 million in Series A funding. AppWorks and Blockchain Capital are co-leading this investment. Their support is a strong vote of confidence in Tally’s vision for the future of decentralized organizations. The big question is: will this funding be enough to tackle the pervasive issue of voter apathy in DAOs and truly revolutionize how these organizations are governed?

One of the biggest problems plaguing DAOs today is the inability to drive engaged participation among their members. Research has demonstrated that over three-quarters of DAO members never participate in discussions or votes on proposals. In reality, this inaction frequently entails the absence of more than two-thirds of the members. This minimal and perfunctory engagement can often result in the most controversial outcomes and erodes the intent behind the decentralized decision-making principles of the process. Tally is doing something about it head on. Using this new funding, they’ll be iterating on their DAO governance tools further, creating on-ramps that make the platform more accessible and their governance more engaging to token holders.

Tally hopes to grow its governance tech in to the governance tech of choice for more existing, crypto-native DAOs. This will unlock dynamic new multichain ecosystems of users, delegates, and stakeholders. We’re not only focused on the typical, passive token holder. We hope to inspire participation from the major orgs that rely on the infrastructure these DAOs will create. This coordinated strategy understands that more robust institutional engagement can help increase the effectiveness and legitimacy of DAO governance, which in turn strengthens each DAO’s governance function.

Tally’s CEO, Dennison Bertram imagines a world where active, engaged, and informed members in DAOs are directly incentivized. This strategy focuses on maximizing economic value for token holders. He argues that on-chain organizations can start providing competitive advantage, even out-competing classic nation-states to the point where the classic state is no longer needed. This vision reflects the immense transformative potential of DAOs and underscores the need for sound governance mechanisms.

Addressing the Challenges of DAO Governance

There are a number of reasons for this deep challenge of low voter turnout and general disillusionment in DAOs. While these challenges are deeply discouraging, it’s important to understand them to appreciate the potential impact of Tally’s work.

  • Low Participation in Governance: The overwhelming majority of DAO members do not actively participate in proposal discussions or voting processes. This lack of engagement can stem from various reasons, including a lack of time, understanding, or motivation.
  • Voter Apathy: One of the most pervasive issues is voter apathy, where members simply lack the interest or motivation to participate in governance decisions. This can be due to a feeling that their individual vote doesn't matter or a general disinterest in the specific issues being addressed.
  • Difficulty in Achieving Consensus: Reaching a consensus in a decentralized environment can be a complex and time-consuming process. The need for extensive discussions and negotiations can sometimes lead to divisive outcomes, further discouraging participation.
  • Inefficient Voting Processes: Cumbersome voting processes can also contribute to apathy. If the process is difficult to navigate or requires significant technical knowledge, members may be less likely to participate.

These challenges further emphasize the need for truly innovative solutions that can reduce friction in governance, foster democratic engagement, and create meaningful incentives for participation. Tally’s technology is designed to solve these problems by offering a simpler, more rewarding, and more engaging governance experience.

How Tally Aims to Improve DAO Governance

Tally’s technology comes equipped with a few important features specifically built to enrich DAO governance and combat challenges outlined above. Here's a look at how Tally intends to make a difference:

  • On-Chain Governance: Tally's protocol enables on-chain governance, allowing token holders to participate in decision-making processes without the need for intermediaries. This direct involvement fosters greater transparency and accountability.
  • Increased Voter Participation: By providing a more engaging and accessible platform, Tally aims to combat low voter participation and apathy. The platform seeks to make it easier for token holders to understand proposals, participate in discussions, and cast their votes.
  • Autonomous Proposal Execution: Tally's technology allows for autonomous proposal execution, streamlining the decision-making process and reducing the complexity of forming and operating organizations.
  • Multichain Governance: Tally's MultiGov feature enables the creation of multichain networks of users, delegates, and stakeholders, facilitating more comprehensive and inclusive decision-making processes across different blockchain ecosystems.
  • Secure and Transparent Governance: Tally's protocol secures the governance of leading protocols, such as Arbitrum, Uniswap DAO, and ZKsync, through on-chain governance and security council elections, ensuring the integrity and transparency of decision-making processes.

Tally’s approach might seem prescient, given the recent regulatory clarity and changing attitudes toward crypto governance in the U.S. This change has created unprecedented opportunities for additional institutions to participate in DAOs. Tally’s upcoming funding will put them at the forefront of this accelerating trend.

The Future of DAO Governance and its Implications

Improved DAO governance could lead to:

  • Increased Adoption: A more engaging and effective governance ecosystem could lead to greater adoption of blockchain technology. As more people become familiar with the applications and benefits of DAOs, they may be more likely to embrace blockchain solutions in other areas of their lives.
  • Stronger Decentralized Organizations: Enhanced governance mechanisms can lead to stronger and more resilient decentralized organizations. This, in turn, can foster greater innovation and economic growth within the blockchain ecosystem.
  • A More Equitable and Transparent System: By empowering token holders and promoting active participation, improved DAO governance can create a more equitable and transparent system for managing decentralized organizations.

Tally’s recent funding marks a big milestone achieved in the battle to make DAO governance better. While challenges surround efforts to advance the company’s disruptive technology, the innovation is clearing the path. Their strategic emphasis on inclusion of institutions nurtures an engaged, healthy, and productive decentralized future.