In the future, ordinary people will most likely not work for the company. Instead, people will earn income in non-traditional ways through activities such as playing games, learning new skills, creating art, or curating content. This shift in the way we work is not uncommon or unexpected—the idea that most people would be employed by large companies seemed crazy to some in 1800.
This new future work is achieved by networks formed around encryption protocols, which are becoming new ways of coordinating, measuring, and rewarding contributions to complex ecosystems. This shift has begun to unlock new revenue-generating potential for individuals and has led to an increasing shift in value capture from organizations to people who participate in encrypted networks as individuals.
The traditional way of making money is “work to make money”, but the future of income is “X-to-earn”-playing games to make money, learning to make money, creating money, and working to make money.
However, this will not happen magically-it will require a new Decentralized Autonomous Organization (DAO) that can coordinate all these new activities in the context of the enterprise system. This article provides a framework for understanding the options available in future work.
01. Limitations of the company as a coordination mechanism
First, we need to explain the shortcomings of the existing profit model. In the information age, as a means of coordinating activities, traditional corporate employment is rapidly becoming obsolete-we have seen this in the emergence of alternative forms of income, such as influencers, contractors, creators, gig economy participation者 etc. These ways of making money do not necessarily feel like “work,” but they are all examples of people participating in complex networks as providers of personal value and earning income through their contributions.
However, these non-traditional opportunities are limited in number and, when available, often underestimate the value of contributors. This is because the work is still based on the web2 paradigm, in which the company continues to control the business model.
More and more traditional companies have “peripheral stakeholders”, that is, participants who blur the boundaries between the internal and external members of the organization. Think of Apple and the developers who created App Store apps, YouTube and creators, or Uber and their drivers—participants contribute to the company’s development from the outside, but it’s difficult for the company to tie incentives to these stakeholders be consistent.
As the company grows, they can no longer maintain sustainable relationships with these external network participants. The relationship between the company and its participants becomes a zero-sum game. In order to maximize profits, the company begins to squeeze value from these participants.
A corporate model with strict boundaries between internal and external may be meaningful in the industrial age, but in the information age, this model can lead to dislocation of incentives and unsustainable extraction. In a world where we have complex information and external stakeholders, companies are no longer suitable to help us coordinate our activities.
The encrypted network creates better consistency between participants, and DAO will become the coordination layer of this new world.
02. DAO as the new coordination layer
DAO will eventually replace the traditional model. DAO is an Internet-native organization whose core functions are automated through smart contracts and are composed of people who are engaged in things that cannot be achieved by automation (such as marketing and software development). In practice, not all DAOs are decentralized or autonomous, so it is best to think of DAOs as an Internet-based organization that is jointly owned and controlled by its members.
Although DAOs are still in their early stages of development, they are no longer just a promising concept. They are real organizations, managing billions of dollars in capital, providing real products and services to millions of people, and creating new ways of generating income for people.
This is a good overview of the current DAO landscape by Cooper Turley:
There are many different types and scales of DAOs: DAOs that manage encryption protocols (Agreement DAOs), DAOs that make venture capital (investment DAOs), DAOs that provide services to other DAOs (service DAOs), and DAOs that purchase NFTs (collector DAOs). ) ), There are a lot more.
But in all DAOs, there are some common clues that distinguish them from traditional organizations (these are generalizations, so please note that they vary for specific instances):
These elements that distinguish DAO from traditional organizations actually enable DAO to establish a more symbiotic relationship with its stakeholders and participants. The DAO functions as an open economy, encouraging the accumulation of value wherever it is provided, rather than based on arbitrary legal boundaries. Chris Dixon once pointed out:
Encrypted networks use a variety of mechanisms to ensure that they remain neutral as they grow and prevent decoys and switching of centralized platforms. First, the contract between the encrypted network and its participants is executed in open source code.
Second, they control it through the “voice” and “exit” mechanisms. Participants gain a voice through community governance, including “on-chain” (through agreements) and “off-chain” (through social structures surrounding agreements). Participants can exit by leaving the network and selling their tokens, or in extreme cases through a fork protocol.
The structure of the DAO is essentially open and responsible, which is a mandatory function that can share value with the participants who created it. Otherwise, other DAOs will beat them in the competition, or their participants will leave to look for other opportunities.
In fact, the best DAOs are those that reward participants. They are the foundation of the ownership economy. This emerging positive and dynamic is the foundation of the X-to-earn trend, which will shape the future of work.
03. The future of DAO “work”
In order to better understand the options available to people, we must explore the specific structure of the DAO:
Graphic inspiration from the team of Brian Flynn, Zakku and Orbit
As an open economy, DAO will promote the X-to-earn trend, which will make work more flexible, smoother and more interesting than we are used to.
The openness of these crypto-economy will allow people to participate in multiple DAOs and crypto networks, mixing and matching different income streams and ownership returns (remember, the best DAO is to distribute ownership to their participation through their own native tokens By).
People’s income will be things we have done in life (such as playing games), things we think of as traditional jobs (such as bonuses/contracts), and things that only a small number of people can get (such as investment, passive Income). In other words, the DAO will expand the types and number of opportunities open to multiple types of participants, including token holders, bounty hunters, and core contributors.
For example, token holders may obtain grants from major DeFi protocols, passive income income from various tokens, etc.; bounty hunters will earn by completing incentive chain actions; network participants can play Axie Infinity or other upcoming P2E games to make money.
In this new future work, the work will be more short-lived and dynamic-the cost of switching between jobs will be lower, the opportunities will be more obvious, the work will be reduced to more atomic units, and the whole world will be unified in one workforce. Get all the opportunities. We will discover new opportunities based on our on-chain history, ownership and reputation, and we will match where we have the best comparative advantage to contribute.
Here are the details of how participants saw money-making opportunities through DAO.
Core contributor: work-to-earn ( work to earn money )
Core contributors are what we usually think of employees today—people who focus on one (in some cases, 2-3) projects or organizations full-time. A single focus enables individuals to integrate into the project and accumulate context and strategic knowledge.
The need for dedicated and embedded workers will never disappear, but in web3, this group of people will be much smaller than ever. Software and, to a greater extent, smart contracts enable a small group of people to have a huge impact. Instagram was acquired by Facebook for US$1 billion, with a team of 13 people at the time. This type of result will become common in the future, as the power of software automation and a larger network of smaller contributors will keep the number of core contributor team members within a small range.
In the future, there will be no obvious difference between working for this team and working for the company-DAO will still have core contributors whose interests are most directly aligned with the health of the organization. Because the DAO is more transparent than the company and can be accounted for by a larger community, but it is more stressful (think about the censorship of public officials).
Bounty hunter: contribute-to-earn ( contribute to earn )
“Bounty Hunters” complete clearly defined tasks at an agreed price and/or duration. These people are usually functional experts in the fields of finance, development, and design. They provide services to multiple DAOs at the same time and complete specific tasks with clear boundaries.
Bounties are usually publicly posted for anyone to claim, and can sometimes be competitive, rewarding the best submission based on the merit and value of the contribution after the fact, rather than based on a pre-application process or bidding war.
Many bounty hunters will join forces to form their own service DAOs—thinking these organizations as organizations that provide outsourced assistance to DAOs who do not have the required skills on hand. The emergence of these service DAOs is to complete tasks that require functional knowledge, such as money management (e.g., Llama), software development (e.g., RaidGuild), governance (e.g., Fire Eyes), and so on.
Although bounty hunters and service DAOs may sound like contractors and professional service companies, they will be different and more popular among DAOs for several reasons:
- Smart contracts will automate a large part of DAO’s core functions, leaving more peripheral work that is clearly defined, functionally specialized, and well captured through bounty.
- DAO will deliberately try to push work to the periphery to maintain decentralization and avoid large hierarchies, and bounty creates a sustainable way to do this.
- The transparency of DAO will reduce the coordination cost of bounties.
Network participants: participate-to-earn ( participate and earn )
This is the latest and perhaps the most exciting part of future work. In any given DAO, this is where most people will fall.
The network gains power with more activities and more participants. However, over the years, users, consumers, and participants have been adding value to the network without gaining their share of value (for example, Apple’s app developers, Creator of YouTube and driver of Uber)).
Compared with a closed organization, DAO is more like an open economy, DAO will reward each individual’s contribution based on the value it provides, regardless of who it comes from. This means that everyday behaviors that are valuable to the network will be transformed into revenue-generating opportunities.
Almost everyone can earn some income by simply living online, using products and participating as a user. For people who get paid for participating online, earning income feels like a game.
Play-to-earn (earn while playing)
Play-to-earn is a new type of game mode that rewards players for playing games and achieving achievements in the game. The traditional game model involves a unilateral value transfer to the game creator or platform, and the game earns the game and rewards the user.
The function of playing a money-making game is similar to the economy: players provide labor (their time and energy) and capital (usually buying NFTs to participate in the game), and are rewarded with fungible tokens for their achievements and progress in the game. Earning currency from games is nothing new, but instead of rewarding players with in-game currency that is limited to use in games, the game is used to earn and distribute replaceable token rewards. These rewards can be exchanged for Other encrypted tokens or fiat currencies.
This means that video game players can pay their bills through their achievements in the game, especially for people in countries where wages and living costs are lower. This phenomenon has become a source of income for millions of people, especially through Axie Infinity.
Axie is a popular blockchain game where players can buy pet NFTs (Axies), breed them, fight with them, and trade them. These actions happen in the game, but each user actually owns the Axies they bought or created. The game has been very popular in the past few months, with total revenue in July and August exceeding 200,000 ETH (currently US$860 million) (these numbers have declined since then, which is the subject of a heated debate I discuss below) .
Source: Axie World
This explosive growth is attributed to the consistency of incentives between Axie and its users, which Axie describes in the following way:
Axie has a real money economy owned by 100% of players. Instead of selling game items or copies, game developers focus on developing players into a player economy and charging a small fee to monetize them. Axies are created by players using in-game resources (SLP and AXS) and sold to new/other players. The holder of AXS tokens is the government that receives tax revenue. Game resources and items are tokenized, which means they can be sold to anyone and anywhere in an open peer-to-peer market.
Axie has opened up the way to earn income, and more importantly, it allows people to see a greater X-to-earn trend, showing how people can earn income by contributing to the network.
Learn-to-earn (learning is earning)
Learn-to-earn is a new education model in which a person is actually paid for proving that they have learned something, rather than paying for learning. This is possible when a person’s learning skills, knowledge, or information add value to the network and the network is willing to fund learning.
On RabbitHole, the encryption protocol pays for tasks, thereby incentivizing users to complete specific operations on the chain. When users complete these operations, they will receive the rewards provided by the agreement. Although bounty hunters usually contribute to the construction of the agreement, these on-chain actions are often related to participating in the agreement.
This new positive interaction helps all parties:
- Users learn to use new skills or methods in the crypto industry and earn tokens for them
- Encryption protocol gains knowledgeable new users
- RabbitHole gets a certain percentage of income to promote interaction
This new model is similar to Google sharing part of their advertising revenue to learn about new products, or paying to your university because you strengthen their alumni network. In both cases, you are providing value to the network without being rewarded, but now, you can.
Since its launch, RabbitHole has distributed more than $750,000 in rewards, paid for by some of the largest cryptographic protocols (such as Uniswap, Aave, Compound, The Graph, Pool Together, and Polygon). Although this space is still premature, if you consider the income generated by the current education and advertising that users have not received, the potential for earning rewards through learning is huge.
Create-to-earn ( create that is earned )
Cryptocurrency has created new wealth and digital scarcity, which paved the way for the explosion of the NFT market in the past few months. This provides artists all over the world with opportunities to earn a living, and in some cases even a wealth that has been passed down from generation to generation.
But this is no different in function from any artist getting paid when the work is successful. What’s more interesting is that creators get paid for the added value they add to the network, not just the personal profit they get from their work.
For example, the NFT market SuperRare airdropped 15% of its tokens to early users, collectors and artists on its platform in recognition of the role these value creators played in its early network success.
Audius is a decentralized protocol for music streaming that allows creators to earn tokens by uploading music and curating playlists. Because of the value that creators bring, Audius gives them network ownership.
Token holders: Invest-to-earn ( the investment that is earning )
Anyone with an internet connection and an encrypted wallet will be able to invest in high growth opportunities.
In a world where every network has a token, tokens are obtained through participating in the network, and the ability to purchase tokens does not require permission, and everyone becomes an investor.
Investment will become the main source of income for more and more people. Not every investment will appreciate, but individuals will have the opportunity to obtain opportunities previously reserved for a few people, and will unlock a whole class of income earning opportunities.
04. What is needed to start the DAO and the future of work
Only when DAO becomes mainstream, X-to-earn opportunities will become mainstream. DAOs show a lot of hope, but they are still in the early stages, and there is still a long way to go before future work can be realized. In a recent survey of 422 DAO participants conducted by Gitcoin and Bankless, <45% of the respondents indicated that DAO is their main source of income.
In order for the DAO to truly become the center of work, we need to develop infrastructure, tools, and systems that can support the DAO and its members.
Most DAOs currently rely on a combination of Web2 software, which are not designed for DAO, or are very young web3 software. In both cases, the requirements of DAO are not fully satisfied.
DAOs have incredible potential in harnessing the power of decentralized networks and the collective wisdom of people, but they need better software tools to coordinate. The DAO will need tools that support governance (e.g., Snapshot, Orca), software collaboration (e.g., Radicle), money management (e.g., Parcel, Multis, Gnosis), discussion (e.g., Discourse), access (e.g., CollabLand), etc.
Of particular relevance to this article is that an interesting area that requires new solutions is rewarding contributors. DAO does not have a CEO or human resources department to decide who should be paid, so it needs a new, decentralized way to determine how much value a person contributes and how much they should be paid for. Some early but interesting solutions include having colleagues determine each other’s rewards (Coordinape) and use algorithms to create a contribution graph and calculate the rewards (SourceCred).
The DAO is open and permissionless, but new methods are still needed to determine the objects of trust, cooperation, and rewards.
The traditional company solution is to conduct an extensive interview process, but this runs counter to the spirit of the DAO. A more complicated issue is that many people involved in the DAO are anonymous. In this new world, the DAO needs a new way to determine to whom to allocate scarce resources.
This highlights the need for an on-chain reputation system. The on-chain reputation system will capture our behavior on the blockchain: our contribution to the DAO, our governance voting history, our token holdings, etc. Ultimately, the reputation system will use these on-chain behaviors to predict our future behavior to determine who is trustworthy, credible, and consistent. On-chain reputation will replace the company’s current way of using credentials, resumes, and interview processes.
However, there are many privacy and security issues in tracking distributed ledgers of public activities related to personal identities. Currently, blockchain identities mainly revolve around addresses, but to make these reputation systems feasible, we will need more powerful decentralized identifier solutions (such as Ceramic/IDX) and identity management.
05. Warning: about creating value and possible pitfalls
In the long run, it is not clear how much revenue can be obtained through these channels. X-to-earn does not mean that everyone can make art and play video games for a living.
X-to-earn is about rewarding value where it creates value. DAO makes these non-traditional paths more sustainable and available to more people, but the market will not reward everyone. Market dynamics are still relevant, and to be rewarded, you need to provide value. Creators need to find an audience, gamers need to achieve results, bounty hunters and contributors need to create impact.
However, the ongoing debate on the sustainability and scale of certain revenue-generating opportunities does not deviate from the theme of this article: creating value within the network should be rewarded, and the DAO will coordinate the return of value within the encrypted network to realize new revenue-generating opportunities.
More broadly, the future work will not be absolutely good. As with any major technological change, there are usually positive and negative sides. DAO will lead to the same result. Here are some directions worth paying attention to:
Competitiveness and gap
Measuring and rewarding all contributions to the network will lead to a more elite allocation of resources. The other side of elite rule is a world where the DAO actually adds to the laws of power previously demonstrated by the web2 economy. For example, on Spotify, the top 1.4% of creators earn 90% of royalties. In addition, a truly global workforce with lower switching costs will only increase these competitive dynamics. If the DAO exacerbates this trend, how will people coordinate the increase in divergence in results?
The processing power of the human brain is limited. Dunbar number is the well-known limit on how many social relationships the human brain can manage, but “DAObar number” is the DAO version of that concept: how many DAOs can a person participate meaningfully in? Each subsequent DAO participation will increase processing power to maintain context and awareness of what is happening. DAO tools for communication and collaboration (discussed above) will try to alleviate this situation, but people may struggle with additional overload.
On the one hand, DAO allows people to choose how they work and connect with communities that share their values. On the other hand, by reducing most of the work to atomic units and pure economic incentives, we risk reducing the meaning of people to pure economic rewards. We run the risk of turning work into discrete, meaningless tasks in which labor is reduced to goods and services.
There is a common analogy, the future has arrived, but it is not evenly distributed. This is certainly the case with DAO and future work. Every day, more and more people join DAO and devote themselves to web3 full-time. DAO is growing rapidly, and it is in great need of talents to help them achieve their mission.
The future of work is emerging, and it will develop in unexpected and fascinating directions.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/a16z-the-future-of-work-is-dao-and-encrypted-networks/
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