Editing DAO (section)

=== Openness ===
A DAO being '''open''' means its rules for accepting new membership is unrestrictive—everyone in the world has equal access to join, an equal opportunity to gain power, and an equal freedom to leave (while taking much of their personally accumulated value with them).<ref>Open is synonymous with permissionless in public blockchains.</ref> It is preferable that a DAO adopt these properties of openness for two primary reasons.
[[File:NetworkEffect2.png|border|right|412x412px|Network effect]]
First, an open network encourages greater growth. Combined with the network effect, this means a decentralized group grows in power faster than a centralized organization as its membership increases if communication is effective. To understand the '''network effect''', notice how <math>n</math> members don’t merely have <math>n</math> connections, they have <math>1+2+...+(n-1)=\frac{1}{2} (n^2-n)</math> individual connections. Connections grow quadratically with membership. A group of  members also has an exponential number <math>2^n</math> of potential subgroups. Each subgroup of size <math>m</math> has <math>m!</math> different role assignments. Etc. As a group grows, there is more talent and more knowledge with quadratically more connections and exponentially more arrangements to foster more powerful collaboration. A decentralized organization with effective communication leverages the available energy of its members more effectively than a centralized organization.<ref>One of the major reasons centralized groups have been more competitive against decentralized groups in the past is that the tree structure of a hierarchy is the most efficient means of communication. It eliminates all redundancy. With contemporary information technology, however, we can now communicate practically with maximum redundancy. Everyone in a group of practically any scale can broadcast to and monitor the entire group.</ref> An open DAO leverages the available energy of the entire population more effectively than a closed DAO. This network effect is a major reason that decentralized organizations can be superior to centralized organizations, because a rigid hierarchy is limited to a single power structure for organizing its members to achieve all the tasks it will ever perform. When the market changes, a centralized system is not as agile as a decentralized system for solving new problems.

The second major reason openness is ideal is that it serves the social good. It is a matter of basic justice that all people in a society are given equal opportunity to participate in all of its institutions. People prefer not to participate in a group that does not serve their values, especially one that limits their opportunities to gain power in the group. More importantly, they should not be forced to participate.

However, openness is a major security risk that needs to be continually addressed. Equal opportunity to participate is essential, but the types of participation that are beneficial to the group are naturally limited. Members who behave poorly must lose some of their power in the group, lest the group be destroyed by selfish behavior which virally spreads until the group becomes completely disorganized. [[Corruption]] must be limited or it will multiply until it destroys the group. Therefore, to maintain openness, a DAO needs strong, automated, executive governance.