The Decentralized Union: A Blockchain Use Case

In this article, I propose a new blockchain use case, the DAO union and speculate as to who might benefit from belonging to such an organization. I also explore some of the potential features and functionalities that decentralized unions could eventually offer.


Since Bitcoin’s 2009 debut, a motley collection of futurists, developers, finance professionals, amateur investors, and casual observers has giddily speculated about the use cases that have become conceivable with the advent of blockchain technology, ranging from the techno-utopian to the exploitative and violent. Many proposed applications center around the executable distributed code contract (EDCC), colloquially known as the “smart contract,” essentially a computer program that exists and runs on a distributed ledger. These EDCCs can entangle with each other such that they interact around a function or set of functions, in some cases forming digital entities known as decentralized autonomous organizations (DAOs).

This article is an argument for a type of DAO which, to my knowledge, has not yet been proposed: the union. Crucially, I am not advocating for the automation of extant unions, which have efficaciously leveraged their members’ collective voices in pursuit of favorable terms of employment for centuries. The type of union I propose is one that seeks to safeguard the rights of various classes of people, including but not limited to workers, for whom unionization has been impractical or impossible up to this point.

Part Two of this article, which addresses some potential challenges that DAO unions might face, will be available next weekend.

Who Might Benefit?

In his 2017 book Whose Global Village, UCLA professor Ramesh Srinivasan encourages readers to imagine a world in which sharing/ gig economy apps “could work with labor unions … rather than relying on flexible contract labor without benefits or insurance.” As the industrialized world seemingly moves toward a more contractor-oriented model of employment, the question of how to achieve such an outcome becomes more urgent.

Contract and supply chain labor: The blockchain could be an ideal tool to establish a union through which, for example, motorcycle riders in Saigon and SUV drivers in Los Angeles could coordinate their efforts to negotiate contracts with an international ride sharing company. 

Much of the clothing and textile industry made the shift to the contractor-based model decades ago and now, many leading brands sell finished products that have passed through countless contracting and subcontracting firms. Perhaps workers under these systems could form collectives that span a brand’s entire supply chain. Such an organization cannot exist today but in the future, if IoT sensors line supply chains and record the data that they gather onto blockchains, and software capable of analyzing and processing these data is developed, this could change.

Data trail exuders: One blockchain use case that has already been proposed, though not in the context of unions, is the tokenization of access to internet users’ data. In the current paradigm, an online merchant can track a customer’s searches, clicks, and purchases – and a social media platform can monitor user activity – then sell these data to third party vendors, who in turn sell them to advertisers interested in marketing products to these surveilled netizens. The blockchain could empower users to take control of their data and choose whether to keep it private or sell it and reap the associated profits. Services that tokenize access to this information could act as unions for social media users and online shoppers.

Vulnerable people: If unions can be formed around these kinds of shared interests, why not others? It’s easy to imagine an EBT or welfare recipients’ union, or an organization through which vehicle-dwelling Americans could advocate for their rights. Unions for people living near heavy industry sites, like oil refineries or battery recycling plants, could advocate for strict safety procedures to be placed on the facilities and work to ensure compliance.

Classes of customers: As a union member whom I interviewed for this story suggested, people who have been prescribed a certain drug could unionize, as could the tenants of a property management firm that operates across state or national borders. Along those lines, why not a union for all the patients consuming any drug produced by a particular pharmaceutical firm, or all homeowners who purchased their homes with loans from a particular lending institution? Or an American meat-buyers’ union could negotiate with entities like small farmers and agro-giants in order to end the practice of feeding antibiotics to livestock, stamping compliant suppliers with its seal of approval. The possibilities, as they say, are endless.

(How) Will It Work?

To understand whether or not a particular type of institution can be effectively translated into a DAO, one must examine all the individual functions that the body in question serves. If enough of these functions are automatable, then the humans, bureaucracies, and conventional computer programs that cooperate to perform them can be replaced with, or heavily supplemented by, EDCCs, and the organization can be considered “decentralizable.” 

The No-Brainers:

Dues: One common feature of many unions is the collection of dues – a task which existing EDCCs are already equipped to handle, as they’re capable of automatically transferring dues from members’ e-wallets to a wallet belonging to the organization.

Voting: Voting is another functionality that blockchain technology currently supports. EDCCs not only enable the casting of votes, but in many cases they can execute the resulting outcome. For instance, if a member suggests raising monthly dues by a dollar and the proposal passes a vote, a contract or set of contracts could enforce the increase by altering the code of the EDCC that automatically deducts dues from members’ wallets. Voting could also determine other changes to the structure of a union, such as who the organization should pay to represent its members and who gets to join.

Collective bargaining: In addition to enabling votes on issues of union leadership, membership, and structure, the blockchain could help members register their opinions on contract negotiations. This functionality represents a potentially important improvement to the negotiation process in that it would allow members to vote iteratively and in real time on proposals from management, providing feedback every single time a new offer appears on the table. Today, by contrast, many union representatives only consult with membership before and after negotiations take place. As one union organizer told me, the more involved workers are in negotiations, the happier they tend to be with the outcome.

Ensuring compliance, audits: In contrast to a traditional contract, which can serve as the basis for legal action against parties that violate its terms, EDCCs’ self-executing nature often makes them very hard to violate in the first place. For a simple example, let’s consider the problem of wage theft. A common mechanism for victimizing workers, the practice can be prevented by programming an EDCC to define wage levels and tie the payment of those wages to other EDCCs or data streams, e.g., one verifying that a laborer has shown up to work. Such a system could generate permanent records of how much money workers have earned as well as what they’ve actually received.

On its website, the Fair Food Standards Council (FFSC) describes itself as the third-party monitoring organization that conducts audits of farms that participate in the Fair Food Program (FFP). The site explains that these audits involve “access to company records at the farm office level and access to the fields to observe harvesting operations,” in-person interviews with all levels of management and much of the workforce, and reviews of company policies. The audits culminate in the generation of a report and a corrective action plan. If an organization on the blockchain were to take on these responsibilities, those conducting the audits would have a greater capacity to gather data continuously, meaning that audits could be conducted in an ongoing manner. This might serve as a check on corporate malfeasance, but it also increases the possibility that worker-interviewees would share less information with interviewers who, by virtue of communicating from afar, could appear less interested in the laborers’ plights.

Buyers’ premium: The FFSC requires FFP-compliant buyers to pay a premium on top of the base price they pay for tomatoes, which the watchdog organization ensures is delivered directly to laborers regardless of the amount they earn during a given pay period. Though a modest sum, the FFSC claims that it alleviates economic hardships enough that workers feel empowered to speak up when they witness or encounter abuse. Such a task would presumably be much less laborious to execute via the blockchain.

Legally binding customer agreements: The FFP also commits participating buyers to a zero-tolerance policy regarding forced labor, so that if a supplier is found to have violated that standard, Program signatories must immediately stop doing business with them. One can easily imagine an EDCC that would act as a “circuit breaker,” automatically invalidating a business relationship if a certain condition, like the use of slave labor, were met.

Complaints: In addition to its audit program, the FFSC maintains complaint hotlines that are staffed at all times, documenting all steps in the complaint process in its database. A decentralized union could certainly perform this duty, potentially even anonymizing complaint submission to reduce whistle blowers’ fear of reprisal.

Legal aid and other services: A union built on a decentralized platform could easily make a wide range of resources available to its members, everything from legal guidance and actual legal aid to a portal connecting members to their health insurance plans.

Childcare: Some activists have opined that social movements which offer childcare services to would-be participants, enabling the poorest and most marginalized people who cannot afford babysitters to participate, are more likely to succeed. A decentralized union would never require members to be physically present, increasing ease of access by doing away with the obligation to attend meetings in person, essentially eliminating the need to secure childcare.

Open-source architecture: Due to the typically open-source nature of DAOs’ constituent code, if applicants to one union are rebuffed in their attempts to join, they can simply copy the union’s source code and build their own organization with the same governing principals, altering those elements of the software that do not precisely suit their needs.

Please return next weekend for Part Two.


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