# L2 DAOs - biggest challenges we face to make L2s sustainable long term | Devcon SEA

- Channel: [Devcon](https://streameth.org/devcon)
- Date: 2025-10-07
- Duration: 25:01
- Watch: https://streameth.org/watch/yt-rG3Zkuo08SM
- YouTube: https://www.youtube.com/watch?v=rG3Zkuo08SM

## Description

Today L2 DAOs are mostly focused on growth and supporting their ecosystem builders. But long-term they will be responsible for the management and maintenance of their chains from all perspectives - ecosystem growth, software development, security, chain economic parameters management, and others. In this talk, I will explore what DAOs need to figure out and fix before they will be able to take this responsibility in the coming years and why we should be addressing those issues already today.

Speaker(s): Krzysztof Urbański
Skill level: Intermediate
Track: Coordination
Keywords: Coordination, DAO, Governance, processes

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Devcon SEA was held in Bangkok, Thailand on Nov 12 - Nov 15, 2024.
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## Transcript

[Music] Friday morning after the great parties yesterday uh you know uh I I really I really appreciate it so today we'll be talking about Dow my favorite topic and we'll be talking about like what are the challenges to for for the Dow to be still there in like five or 10 years or how we can put it another way aligning with you know current sentiments how can we make Dows great finally you know we'll be talking about Good Dows very good Dows the best D in the world some things about me uh as you can see I'm old and I'm that old that I've been here during the open source boom uh I've I've been very involved into free software free and free culture movement and even though free software won at the end like everybody like all the devices that you are using are using some kind of a free software that way or another the fact is that the organizations behind those U those free software did not actually survive they were all captured by uh corporations so my Mission being in governance is how to uh how to make it different how how can we do something to make it work this time a little bit of uh background about L2 beat if you don't know L2 beat this is what we're doing we are assessing l2s um through their risks and you can check in A2 bit like if the L2 that they are keeping your funds at are safe and we are also delegates as governance we are delegates in um all the L2 dolls our goal is to be present in all L2 do so we are the biggest delegate in arbit the biggest delegate in optimism one of the biggest delegates in the casing the biggest delegate in scroll and so on and so on like we present in hop Unis swap Ever Clear stocket polygon Lisk and our goal is to be present across the space if you want to follow what we are doing here's the link at the top and at this page we are putting all the updates of what we uh what we are doing the current moment and I am known for saying that governance is the most important thing we are trying to figure out in crypto and I really mean it you know I appreciate a lot all the different technical topics you know ZK those all those um all this magic that BS those systems work however if we are Building decentralized Systems then we need to figure out how to actually you know how to make decisions how to coordinate how to manage manage those systems longterm and I'm also known for saying that we do not have much time really it's not that we can play for the next 10 years to figure it out because we are managing live serious protocols with a lot of money locked in it we need to figure out quickly how to actually um manage them so okay we will be talking about Dow so to you know to to to to make you wake up a bit what does d stand in the Dow decentralized so decentralization is great yeah it has no single point of failure it has no Gatekeepers nobody is telling you whether you can get involved in the Dow or not it has no stupid ideas but not in a way that there are no stupid ideas in the Dow simply nobody can tell you that your idea is stupid and therefore we shouldn't be you know approaching it any idea is um is good there is no exclusivity nobody has like exclusive U access to the Dow if you are if you have something valuable to add you are welcome and you are good to good to contribute and there are no holy cows you know even though as I said like we are the biggest delegates in house it doesn't mean that we are always right it doesn't mean that somebody can't call us out and say that you know what we think or what we are doing is maybe not the best approach you can literally call out everyone however with decentralizations comes no efficiency anybody who actually worked in the Dows know knows that coming to a conclusion in the Dow could be hard you know do managing stuff in the Dows could be could be could be tough there is no coordination like we are all those separate atoms simply you know running in circles and trying to find our way around the Dow and there is no central power to tell us okay you now all of you go into that direction there is no continuity which means that if there is some initiative uh especially if if some some one person um is doing handling some initiative there is no guarantee that this this person will stick forever and there is no process by Design to make sure that if this person leaves somebody takes over his responsibilities there's kind of no choice and what I mean by that is that we don't get to choose who do we want in the Dow like basically we we get to choose only from those people who came and you know said that they they they want to be involved so sometimes it's not a players sometimes it's not you know your your dream developer or your dream marketing person you've got who is that and you need to you need to go with that like you you you can't get to hire or proc procure services at least by Design if you know if you don't implement it yourself there is no like pattern in the D how to do it and there is no stability uh we you know I've seen many ds throughout the years and if you uh if you followed for example maker you know that there are dramas in the Dows uh and things are changing sometimes in an unexpected ways okay and what is a what does a stand for in the Dows autonomous so what does it mean this means that there is no higher instance there is no one that is telling us what to do there are no boundaries it's not that you know you can't you can't go there you can't achieve try this idea you want to Launch 50 million VC fund go do it like if you can convince people that this is this is something you want to do that's that's great if you want to distribute you know millions of tokens to to users of your applications if you can convince people let's do it like there is there's no Nothing is Stopping Us from experimenting there are no dependencies like it's not that you can that you need to you know first do something before you can do that like you literally it's us who are making the rules and there are no obligations you don't owe anybody nothing if you are you know contributing to the Dow it's simply a community and there are no role blogs because of that like it's not like in traditional corporate settings that you know in order to to uh come up with you know push your idea you need to go through Jeff from this department because he's you know he's the one who's uh who who doesn't like your idea and he will he will kill it but unfortunately that means that autonomous systems do not have strategy that are that is given from someone you need to figure out the strategy yourself as you know as a group there is no long-term goals nobody gave us this like normally corporate setting is someone who is you know setting this up for for everybody in the Dow you need to figure it out yourself or you need to or the Dow needs to figure out how to actually manage this and similarly as with dist as with decentralization there is no organizational continuity there is no intrinsic value that is being passed to to to Next Generation there is also no choice in terms of like how you manage this and again on an organizational level there is no stability and here's a tricky question what does o stand for in in the Dow organization I would say that in the Dows that I've been involved with o stands for o because we really lack organization in those Dow we are like this set of shareholders that you know has stake in the company but there is no company there is you know there are people owning stuff but there is no staff to manage those systems and we need to change that if you saw BK talk two days ago about the L2 lands scale or how how do we you know grow the L2 ecosystem he called it that it's time to grow up and I Amplified this message and I would like to say that in the Doos it is time to grow up it is time to get together and figure out like how to make those systems work because if we don't figure it out in few years from now somebody will tell okay this this whole funny stuff with the Dows with people making decisions by voting um you know on chain it was fun and all but maybe let let's grownups do this thing from now on so what does it mean from my perspective to grow up like what we what do we need to do first of all I think that you know we are super opposed to centralization like we mentioned in the very beginning distance for decentralization but it doesn't mean that some parts cannot be centralized it's actually good to sometimes have kind of a centralized entity within the organization that is handling stuff and we've been learning this the hard way by experimenting and trying first decentralization and then coming up with maybe a bit a bit more efficient structures uh I would recommend you checking out like the optimism Story how optimism went especially within grants how optimism went through all the token holders deciding what to fund and what not and voting on like tens of projects to small grants Council that is managing the whole process accepting inbound assessing the pro the the the the projects then Distributing funds and then keeping the projects accountable checking whether they actually delivered on the Promises so I would suggest that this is the right way to go we and having those centralized entities doesn't mean that we don't have control over them the how I understand the value of decentralization is not that everybody is voting on everything and every decision have to be done collectively is that we have Collective control and we can provide Collective oversight so even if we have those entities um internally we are still controlling them and we can still change them another statement that I would make that people uh people are somehow usually opposed to those organization that they have within those Dows usually all like most of the Dows that we have right now are coming with those trading Wheels somebody who set up the Dow usually also set up some entity that is supposed to at least help the da um you know do their stuff and people in the Dows for some crazy reason show no trust to those organizations they rather would have you know five different random people in the internet decide on strategic directions for the da instead of people who are hired and are working full-time waking up thinking about this organization throughout the whole day thinking about this organization and when they go to sleep they also think about this organization somehow five random people from the internet are more aligned with W with our values than those people who are dedicated full-time to it so I would say your foundation or your Labs or your other entity centralized a bit that is in your ecosystem is not your enemy you should start working with them not against them you should start listening to them you should start taking their advice and asking them for advice because they usually know better and they have more skill in the game you don't have to figure out everything uh yourself and this is also something you know when when when people are coming to the DA with some proposal they try to own everything they try to you know figure out everything by those STS from the very basic stuff up to the whole oversight and management process it shouldn't be like that like you know there is because of that there is a high super high crazy cost of coming up with proposals and therefore you know when somebody spent weeks and I really mean it like weeks working on some proposal it's kind of you know bad and bad move to to Simply vote it down because it doesn't work that well so but if we work together if we split the responsibility we can be more efficient we can do better designs because we can also learn from each other and this is the famous saying from yat some uh famous already late uh anti-communist uh hero from Poland and when he was fighting the system he was saying don't burn committees form your own if you want to change the system you need to figure out how to change the system and not just complain not just fight it so I would also uh I would also advise this if you want to change the Dows that you are working with don't just try to destroy something try to build something try to show if you think that things are going wrong way show it how show how it should be done and that's by the way the huge power we have in the Dows because as I mentioned in the previous slides nobody can stop you nobody can tell you no we already have this at home if you can convince people that your way of doing stuff that your way of thinking about the organization is better than the current way then let's do it you know you simply have to convince people who will vote for you and last thing and this is something that you know drives L2 beat as an organization trust but verify and there this is something that I see lacking in many ds we accept proposals we fund stuff we let people do their do their things and run their programs and then there is no one because you know no one proposed in this proposal like the proposal themselves didn't put out oversight and control structures so no one is responsible for checking for keeping them accountable and checking if they are first of all delivering the work if they are even doing something and if they are doing something if this is exactly what they promised more often than not like sadly first of all people are simply not doing what they were what they promised that they will be doing and then again quite often even if they are doing something they not are not delivering on everything that they promis in the proposal so verify this is super important in order for make to make our organizations more effective and we we if we Implement simply those few things that I mentioned we can really have the da we can really have an organization that is autonomous that has its own mandate that has its own strategy it's all goals that is decentralized that is controlled you know by this Comm community and is driven by this community and if we implement it hopefully you know we'll have flying cars and everything will be great but we need to figure out that quickly we don't have much time left and i' would like to also call from the stage if you would like to see how it's going if You' like to you know know your way around the Dows and see how does it look like running the Dow from the front seat in the most in the biggest L2 protocols we are hiring come ask me about uh about that we want you to join our team because we you know we are handling a lot and right now at a little bit it's just me and CA sitting out there and it's a bit too much for us to to handle everything so if you would like to try your adventure in Dow governance call me find me after the find me after the The Talk and let's let's talk about it and thank you very much this is how you can how you can uh find me and yeah we've got two minutes left I think we can go to to the QA now yes so for now our favorite and the most important part Q&A session you can take a photo of the QR code and it leads to the mirat you can log in Via your zup pass uh you can also upload questions okay I will go with the first one how should L2 go differ from L1 governance so it depends on what exactly do you mean uh because uh as I'm saying governance is not just voting governance is not just this point in time when we are making the decision governance is everything actually for me governance is everything else it's how we Source ideas how we structure the ideas how we be how we build consensus how we convince others that the our approach is better than than the current approach this is what is important in governance so and these things are kind of universal it's human so this is is similar however there are specific things in L1 governance because usually you know L2 governance is centralized as then there is usually at least right now a single sequencer a single entity like a DA managing everything while in and in L2 governance we we don't have Forks at least so far uh which is the case in L1 governance if you've got if you've got people running their own infrastructure and controlling the network the way of like the there are different decisions to be made and there are different coordination mechanisms to to make this happen because like people can simply go and run their own stuff that and they can split the way how ethereum splits from for example from E eum classic what's the one Dow you think every other Dow should look to as a ro model I don't think that there is any role model Dow right now but I would totally recommend learning from each other I would recommend optimism people to to look into how are things uh running in arbitro arbitro people to check how the processing and structures are created in optimism in my opinion optimism is doing an amazing job uh and you know shout out to Justine who's leading that amazing job in trying to experiment on the processes and structures uh they're documenting it they are doing it in a you know um in the continuous fashion experimenting with different designs and there's a ton of learning from from this process on the other hand in arbitrum for example what one could uh could learn from arbitrum is how to manage chaos uh because arbitrum approach to decentralization was like YOLO let's give people tokens and let them figure out how how it's done you know we will not tell them how it's done like they need to figure it out and we'll be staying you know from the side and and just helping them if needed um and there are things that are you know there there there's stuff to be learned from from other organizations as well for example uh there is a question what are some good Dows that you see I think that all the Dows that we are involved are good um however there are also examples of great Dows that not everything went very well there um a lot of people that I know have huge PTSD after maker da for example but in my opinion what make out that was amazing like they they they were literally on the frontier and they were trying and experiment with things that nobody's seen before also One D that I would recommend every everybody to learn about is m Da like one of the first crazy Dows that that experimented with a lot of stuff and they introduced the the rage quid mechanism uh there is a lot to be learned from that as well as when we are speaking about m Da the next one to to mention is definitely meta cartel da uh and and the story about it okay why is it taken as a given that token holders should be the ones to have any say at all other than opting in or out or buying or selling their token so well that's how it's created it depends actually because it's not always like that uh in order for token holders to really have a say like really have a say token holders need to have control and there are very few Dows in which token holders have actually actually do have control one of the examples is arbitrum and the reason why token holders have a say there because that's how it was designed this token is literally controlling the whole ecosystem as in token holders need to vote in order for any upgrade to be implemented like there is no other way and as well token holders are controlling for example the foundation it's not like that the foundation is somehow you know securing the The Da and they have the last say no token holders arbitrum can and one day will change the director for example uh token holders can vote something to ask Foundation to do and Foundation is obliged from from the BOS from the reg you know the the stat statutory documents to follow the will of The Da so why is it taken as a given because that's how it was designed but it doesn't work like that in every system you you need to check if your system if in your system token holders actually do have a say do we have any other is an elephant in the room D are maybe in part oo by Design to upus skate layers yes uh I believe so that some Dow designs are made complicated and uh crippled by Design [Music] to to not give out and to not pass all the control but it's a bigger politics and in my op in my opinion we'll see how it goes like how the there is this tension between equity and token in the structures that that that we see uh in crypto and I think this will be the Hot Topic of the next year or two okay my time is run up thank you very much