Ethereum World's Fair @ Devconnect

Making DAOs Work — with Trust Zones
2025-11-20 , World's Fair Stage

The Hats Protocol team introduced the Delegation Trilemma in blockchain-based organizations: the fundamental tradeoff between effectiveness, cost-efficiency, and hardness that every DAO must navigate when delegating in order to get things done.

We showed that this trilemma is the real problem with DAOs. Every time a DAO wants to accomplish something, it must delegate. And every delegation requires making difficult tradeoffs between these three dimensions.

The question is: how do we make optimal delegations within these constraints?

The answer, we believe, lies in two breakthrough technologies that are fundamentally changing what's possible:
- AI: drastically changing the tradeoff between effectiveness and cost
- Programmable Hardness: allowing us to apply the automation and flexibility gains from AI to the hardness dimension itself

Together, these technologies push the possibility frontier outward, enabling combinations of effectiveness, cost-efficiency, and hardness that were previously impossible.

But to actually leverage these technologies in practice—especially programmable hardness—we need a comprehensive framework for understanding and programming the parameters of delegation.

Introducing: the Trust Zones Framework.

Nicholas Naraghi is a co-founder of Hats Protocol, DAO true believer since 2017, BTC since 2011.