When Co-ops Meet DAOs

At Autark, we are building open source tools on Aragon to serve digital cooperatives and this is also one of the main topics you are exploring...

Nathan Schneider: Yes, that’s a big question for me. Are there ways in which these digital tools can help new cooperatives get off the ground more easily, but also - can they be used by older cooperatives to claim some of their potential? That’s a big ask because those older cooperatives are very conservative, they are careful with their members’ money and struggling to keep up with better capitalized competitors. There is some promise there though - especially, the ability to use things like DAOs [decentralized autonomous organizations] and shared governance technologies to recapture the lateral member-to-member relationship that made cooperatives take off in the first place.

Could you share some of your favourite functioning examples of cooperatives operating nowadays?

There are a few examples that lurk around in the economy. In the US, the most wealthy corner of the cooperative movement is the credit unions, which is also a powerful movement here in Germany. These organizations grew by serving communities that didn’t have access to financial institutions - they were able to do that because they built upon the member-to-member relationship. They built on the idea that people in a neighbourhood could decide on who was creditworthy - better than some banker who never set foot there - based on relationships, based on reputation systems, based on a stake. And as these institutions grew, they received public policy frameworks and regulation to support their growth, and now they operate like a nicer, nonprofit version of banks. About a third of US citizens are members of these institutions, which constitute a powerful piece of infrastructure where people can put their money in a place that feeds their community. But what does the next generation of traditional credit union cooperatives look like? How can we really use this model as a lever to transform the current economic system rather than just work around the edges?

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