DAO has moved to center stage.
Since 14% of the entire ETH supply was locked in The DAO at the beginning of 2016 , we have spent 5 years studying the key significance of DAO to collaborative digital work groups.
DAO is an Internet community with shared equity structure tables and bank accounts.
Members work together to create, distribute and capture value related to the common mission. Ownership shares economic, social and political content, creating best practices for digital collaboration.
In this article, we will disassemble the DAO and study the relationship between its financial capital and social capital.
DAO layout cover
The DAO mentioned in this article is not complete, I must have missed something.
What is DAO
DAO is a promise to share value with the community.
The DAO seeks:
- Provide voice channels for members through governance.
- Form a flat structure to create a flexible workflow.
- Allocate resources to complete a core task.
A Telegram group with 10 members and one ETH is a DAO.
A DeFi protocol with assets exceeding 1 billion U.S. dollars and governed by more than 10,000 coin holders is also a DAO.
Regardless of the size, DAO seeks to solve the core task-evolving from a group chat to a success-driven community.
There are currently more than 100 DAOs, and they manage more than $10 billion in assets.
DAO 2021 layout
DAO operating system
The beginning of DAO is the operating system used to create them.
These projects provide the community with different templates, frameworks and tools to gather resources and start their first DAO.
They usually provide smart contracts and interfaces to promote on-chain actions in decentralized communities.
The DAO operating system allows anyone to easily start a DAO with limited technical capabilities.
The first real use case of DAO is grants.
The community donates funds and uses the DAO to vote on how the funds should be distributed to various contributors in the form of governance proposals.
The governance of grant DAOs (Grants DAOs) was initially carried out through non-transferable equity, which means that participation is largely driven by social capital rather than financial returns.
The grant-based DAO shows that niche communities are more flexible in capital allocation than formal institutions.
Protocol DAOs (Protocol DAOs) transfer power from the core team to the hands of the community, spawning a new way for projects to issue fungible tokens in the market.
Although the beginning of the DAO was characterized by non-transferable equity, the protocol-based DAO pioneered the issuance of transferable ERC20 tokens with secondary market value.
These tokens are usually used for management protocols, which means that only token holders have the right to propose, vote, and implement changes to the underlying mechanisms of the network.
Projects usually vote on how to distribute tokens, which opens the door to liquid mining, fair issuance, and all possibilities between the two.
Protocol DAO provides a framework for any network that issues tokens and hopes to be held and operated by its community.
With the introduction of new types of tokens in the protocol DAO, it seems logical for groups to join forces to invest in them.
After a long period of non-profit DAO, the investment club reversed the situation, and they let members focus on generating returns.
Although these DAOs have to face more legal restrictions than grant DAOs, they show that any group of people can gather to invest in larger capital with a lower threshold.
Investment DAO allows members to pool capital and invest in the initial stages of the project.
With the emergence of so many tokens, projects need talent. Service-oriented DAOs are engaged in talent allocation, using on-chain credentials to transport and allocate resources from one DAO to another DAO.
Service-oriented DAOs create decentralized working groups for individuals to work for the open Internet-essentially equivalent to a talent organization native to the encrypted world.
From law to creativity, from governance to marketing, from development to treasury management, service-oriented DAOs create channels for signing contracts with web practitioners. Work is usually rewarded with ERC20 tokens—providing ownership of the value they create for the network.
Service-oriented DAO explores future jobs and employment patterns native to the crypto world.
What does it mean to be a member of the DAO?
In this speculative-led industry, social DAO focuses on social capital rather than financial capital. Social DAO is a natural evolution product of group rent chat, in which friends become co-workers.
Social media turns everyone into a media company, and social DAO turns every group into a digital enterprise.
They challenge the definition of participating communities and provide ways to join digital native tribes.
The social DAO demonstrated that cryptocurrency is not only about making quick money, the Internet is the best place to meet people with similar interests.
I believe you are no stranger to NFTs during this time, and you cannot ignore them.
In the context of NFT entering the mainstream, the collector DAO appeared with the purpose of collecting NFT.
The role of the curator group is to secretly combine specific artists, platforms and work series to create the long-term value of NFT.
Collector DAO aims to operate NFT with long-term value.
In an era where information is available on a global scale, so should the ownership of the narrative that spreads with the information.
Media-based DAOs return this power to those who consume content.
They break the way of publishing content involving writers, streamers and readers. Whether it is a media mining plan that encourages contributions or the management of front-page topics, media-based DAOs turn consumption into a two-way road.
Media-based DAOs share a way out of an open agenda to spread awareness and news.
Looking at the big picture, there is a set of tools that are becoming the de facto standard for most DAOs today.
- Gnosis Safe-Multi-signature wallet, usually used to manage community funds.
- Snapshot-off-chain voting platform for simple token-based governance.
- Discourse-Forum, usually used to discuss governance proposals.
- CollabLand-a robot that sets limits on the currency holdings of group visitors and provides information to the group.
- Coordinape-a collaborative game used to decide which contributor should receive token rewards.
- Parcel-money management, can easily track and send payments.
- SourceCred-Tracks examples of community participation and rewards for active members.
- Mirror-Financing creative projects through tokenized crowdfunding.
- Tally-Governance dashboard, used to track the voting records of different protocols on the chain.
- Boardroom-a governance center managed by token holders, empowering key decisions.
- Sybil-Create and track on-chain decision delegation (delegation).
- RabbitHole-Reward tokens for completing specific tasks on the chain.
In short, this stack allows anyone to build a funding pool, introduce governance, reward important contributions, and engage the community in ongoing discussions.
The evolution of DAO
DAO is a spectrum.
The lightest DAO is socially advanced off-chain governance. The purpose is to create lively discussions and a sense of belonging in the community-not to create profit.
The heaviest DAO involves huge amounts of capital and requires on-chain governance to execute and approve proposals.
What we are currently witnessing is the transition from very heavy agreements to very light microeconomics.
The community is creating social DAOs in real time, not limited to starting from an on-chain architecture.
For heavier DAOs, many on-chain proposals are about creating and authorizing light off-chain working groups. The recent developments around grant-based DAOs highlight this most. They allow trusted community members to move funds faster, rather than having to reach a quorum to perform simple payments.
As the development momentum of the DAO has greatly increased, proposals for diversified funds can often be seen. These events allow the wider community to directly contribute to a DAO’s fund pool in exchange for its native tokens.
This transformation shows that the community pool of funds can also be used for fundraising, rather than just managed by the core team.
Once this method proves to be safe, the DAO needs to figure out how to use it for work. I am deeply fascinated by the evolution of the working group and subcommittee, and we are also observing its real-time development.
DAO is maturing with community-driven services and governance.
With the growth of the fund base and the improvement of the quality of the community, core contributions have become more and more important to the sustainable development of DAO.
Through Fire Eyes DAO, I was fortunate to participate in the adoption of on-chain proposals for protocols such as Aava, Balancer, Rocket Pool, and Gitcoin.
Governance will become more and more important, and the design of this category has very broad possibilities. Therefore, the number of teams dedicated to using funds for work through on-chain proposals will also increase.
From grants to salaries, token exchanges to mergers and acquisitions-it is expected that the next wave of web3 practitioners will show why web3 governance is a complete paradigm shift. (My next article will focus on this topic).
Soon, we can see DAO becoming a new limited liability company .
I feel that it is the general trend that tokens will eventually replace equity, and the traditional legal structure supporting equity will also be eliminated.
Just DAO It
This article was published in June 2021, and the latest update was in August 2021.
The following is a continuously supplemented list of resources to follow up the development of DAO and the key people that need attention. This list will be updated regularly, welcome to share any content worth adding!
- [Clay Robbins]-“DAO Nation”
- [Gaby Goldberg]-“Curators All the Way Down”
- [Alex Zhang]-“Evolution of the FWB DAO”
- [Julia Lipton]-“Open Source DAO Market Research”
- [pet3rpan]-“How to Grow Decentralized Communities”
- [Linda Xie]-“A Beginner’s Guide to DAOs”
- [Kinjal Shah]-“DAOs & Creators-Resources to Get Started Today”
- [Cooper Turley]-“How to Launch a Token”
- [Bankless]-“Life of a Protocol Politician”
- [Kevin Owocki]-“Know Thy Enemy-Coordination Failures”
- [Packy McCormack] –DAO Nomichi (The DAO of DAOs)》
- [Packy McCormack]-“Cooperation Economy”
- [Patrick Rivera]-“A Guide to Crypto Tokens”
- [pet3rpan]-“An Introduction to DAOs”
- [ Vitalik Buterin ]-“DAOs, DACs, DAs and More: An Incomplete Terminology Guide”
To the DAO contributors in the world-please keep working hard.
We still have a long way to go before the DAO is proven to have traction on a scale, but this snapshot should show that some of the smartest people in the world are working to achieve this goal.
At the same time, keep the output and remember… When there is hesitation- Just DAO It
Special thanks to Carlos Gomes for providing pictures, Li Jin, Jesse Walden, Pet3rpan, Lucas Campbell, Kinjal Shah, Jess Sloss, Brian Flynn, Jake Chervinsky, Packy McCormick and Alex Zhang for their feedback on this article.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/aspects-of-dao-the-relationship-between-concept-layout-operating-system-and-social-capital/
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