The interpretation of a Decentralized Autonomous Organization (DAO) remains contentious, primarily due to the ambiguity of the term 'autonomous.' There are two interpretations: The first is a robotic interpretation, where an organization’s operations and functions run autonomously, independent of any entity or individual. The second interpretation is more traditional and managerial, where an enterprise does not exert centralized control over its globally distributed subsidiaries but allows them to operate independently based on either function or localized business needs.
A DAO includes both interpretations in a blockchain protocol context but is more weighted to the robotic interpretation, where a DAO should comprise automated functions that enable the organization to run independently of any entity or individual. However, not all functions of a DAO are automated, and this is where the second interpretation comes into play. Although distributed, the community contributes to the DAO grouped by function or geography. Governance is a great example; it is a function uniformly applied but represents an aggregation of distributed views that has to consider its contribution from a sovereign and legal jurisdictional point of view.
However, the community of contributors, particularly in the governance example, is fluid. A core group may remain committed longer, but the relative majority could easily shift from one jurisdiction to another. Extending the governance example, a community, initially composed of mostly US-based token holders, could evolve into a relative majority in any other country.
The push to incorporate DAOs is driven by the need to examine the complexity of fluidity and create a regulatory touchpoint of responsibility as a solution. However, incorporating relies on a consistent central point of responsibility.
Consequently, incorporating a DAO creates a contradiction, as it centralizes responsibility and accountability to one region, contradicting the DAO's decentralized nature and not considering the fluidity of the relative majority, which is arguably a strength if the DAO's autonomy is mainly robotic.
The Earth is a great example of a DAO; the Earth spins, orbits the sun, and, in essence, provides the functionality of being habitable. While performing these functions autonomously, humans have developed and contributed to the planet (not always well) in aggregate, with the predominant contribution coming from a fluid majority over time. To incorporate a DAO would be the same as incorporating the planet and saying that it is the responsibility of one group of people. And, like DAOs, it isn’t.
In reality, we live in sovereign states governed by law, so our actions are judged on that basis. Reflecting on the governance example, if contributing to a DAO is treated differently from one legal jurisdiction to another, how can a DAO provide an equal opportunity for universal access, contribution, and treatment? The answer is that it can’t. A DAO in its optimal form satisfying its tenets of existence would require a universal law that does not exist (at least, not at the moment). Practically, right now, the tenets of a DAO are impossible because incorporation cannot include universal plurality and fluidity of the relative majority, which is central to the nature of a DAO.
But there is a final point: arguably, the most important characteristic of a DAO, which is completely ignored and makes the point of incorporation moot. A decentralized protocol and, by extension, the DAO, if properly formed, should offer the user self-sovereignty, including acknowledging and understanding their responsibility and the consequences of using a protocol. In contrast, incorporating a DAO or simply looking for a touchpoint of responsibility in this light speaks to the fact that DAOs, in general, are either impossible or still developing.
The conclusion, it seems, is that incorporating a DAO contradicts its purpose—but, and this may be the fatal flaw, is the assumption that a real DAO exists in the first place. So, we may be solving for a thing that doesn’t exist, which makes it more of a madness than a contradiction.