How has DAO made money so far?

Think of web3 as your high school.

DeFi is home to calculus masters, statisticians with graphing calculators, and extroverted sports players.

NFT is where artistic youth, theatre stars, bands and orchestra members go.

The DAO is where all the history and literature nerds go. (I am one of them.)

Things get interesting.

From a day-to-day perspective, the DAO’s work can be quite interesting for lovers of history and literature in the DAO field. You might see an ancient Sumerian Zigguart taking up the entire slide screen at a conference. You might start tweeting about hunter-gatherer societies. You may support your ideas in forums with philosophy and theory rather than accepted business best practices.

For me, navigating the DAO realm has been a rich intellectual experience. As a former liberal arts college student, I could talk about theory and ideas all day long. I once wrote thousands of words on a line from an obscure Shakespeare play. I love these things.

But…even as an English major I start thinking about the sustainability, profitability and commerciality of what we do. Especially when I see Silicon Valley laying off workers because of the recession.

It feels like the DAO is moving out of an academically based, theory-loving mindset. That’s not a bad thing – it just means we need to get creative when we make enough money to pay contributors and keep it going.

It is a huge paradox that most DAOs are not profitable in this highly financialized space. That doesn’t mean they’ll never be profitable, or that they can’t operate as efficient businesses. But it does mean that we need to move away from some old notions of what it means to be a successful business and what a DAO needs to support its core team.

It seems that DAOs that use Token as their own product and rely solely on “Token rise” to pay contributors are outdated. But when it comes to other funding models, DAOs are deadlocked. They didn’t really launch a product (yet). They sometimes provide services, but this is mostly within Web3. They don’t talk much about business strategy or profits and losses.

It often feels like we live in a different reality than how businesses operate.

Of course, it’s not all about money. But… when you have a team of skilled contributors who dedicate at least 70% of their time to the organization (let’s be realistic… does anyone in web3 only work on one project?), money is a huge one that we can’t ignore question.

I think part of this fear of blatant money making comes from the sheer greed we see in web2. Platform monopolies, sales of personal data, billionaires. Everything in there has become disgusting. And in web3, we want to purify ourselves.

We’re here to opt out, not opt ​​back in.

But if we don’t get serious about making money, DAOs will be a very short-lived experiment.

Inspired by the Orca twitter space and Hasu’s I Pledge Allegiance chapter digging deep into DAO profitability, I’m analyzing the way DAOs combine business awareness and DAO awareness.

Accept tough decisions and obey the big picture

In the web2 business world, making a steady profit usually means being ruthless about what you release, who you hire, who you fire, how you spend track money, and where your company is going. (While these ruthless decisions are not true in all web2 organizations, they are certainly tainted). Compared to the open source, public goods, and positive-sum ethos of web3, this feels very focused and out of place.

However, in order to build a lasting business, these decisions need to be made at some point. Unless you’re very lucky, I think you need to make a lot of tough decisions to get real and sustainable gains.

Hard decisions are tough for DAOs because a compromise is usually required to bring a proposal to a vote, and a compromise is usually not a hard decision, but a “somewhat happy, but also a little bit angry” decision.

How does a DAO accept “subordination to the big picture”, that is, choosing a path forward regardless of whether the parties agree or not, rather than going around in circles looking for a compromise that doesn’t exist? Especially when passing rates and voting thresholds are required to advance something?

One approach is to keep most decisions within the small team responsible for the DAO’s funding and critical feedback. Then, let a few decisions go through the voting process – but these will be big items that will require serious debate and discussion.

Keeping most decisions at the guild/team/small group level is a great way to move your organization forward fast. However, these teams still have to submit to the larger DAO (members, token holders, decision-making groups in the organization) to get funding.

Then, you get a pyramid like this:

How has DAO made money so far?

Then, the hardest and most critical decisions are made at the DAO level, keeping topics and small issues within the team. This allows the DAO to focus on some rather than many hard decisions.

Once decisions have to be made at the DAO level, it is especially difficult because it takes longer to reach consensus. So only the most important decisions should be kept. Like this inverted pyramid:

How has DAO made money so far?

Another approach to dealing with hard decisions in a DAO draws on the Teal philosophy: when an organization faces an existential threat, key leaders can use an advice process (soliciting feedback and suggestions from others about an idea) to formulate a solution at scale. Program.

Giving contributors shared responsibility on the issue—in this case, finding a profitable path forward—can help inspire new leaders.

“When employees are fully involved in the advising process in a crisis, they are asked to share responsibility for difficult decisions and are trusted to contribute. It’s empowering and helps the organization grow.”

Reinventing Organizations Wiki, Crisis Management

Simply saying, “We need to find a way to make enough money to pay our core team Y while doing X. How do we do that?” This is a powerful way to drive the conversation about profitability . Leaders will emerge, and new solutions will emerge.

Having a visionary CEO is not a prerequisite for running a great company…. having many great leaders is.

There is a common belief in web2 that a visionary CEO is necessary for a company to succeed. Steve Jobs and Apple, Bill Gates and Microsoft, Elon Musk and Tesla, Mark Zuckerberg and Facebook are all visionaries touted as the best of the best. Business leaders at web2 are skeptical of DAOs because they lack that single vision.

To me, it’s like saying that a great country needs to be ruled by a monarch to function: I just don’t buy it.

Corporations are so new that I think we’re still in the monarchy in terms of best practices and standards for corporations: we’re in the 14th century at best.

I believe that visionary CEO philosophy is more about correlation than causation. In our complex and unpredictable world, in a complex web of other factors and agents, it is nearly impossible to attribute causality to a single agent. While these CEOs are indeed gifted in their technical and leadership skills, I believe we are moving beyond this phase of work into a whole new phase that is giving way to democracy.

To me, DAOs are not leaderless: they have multiple leaders with different backgrounds and experiences. Rather than being a figurehead, these various leaders can set the tone for the direction of the organization.

And, as long as they are united by the mission and not divided by their understanding of the mission, these leaders can even lead the DAO to a larger mission than a single leader can lead. This is where “subordination to the big picture” comes into play, and moving the organization toward its true goals must take precedence over the individual’s ego and perspective.

How has DAO made money so far?

Connecting this to profitability, the key is for the DAO to have a real purpose around which leaders can come together. If there are many self-directed purposes competing for resources, the DAO will never make enough money to continue to pay for its core team. A unified mission is necessary for profitability.

The idea of ​​a public good is sometimes applied to something that is not a public good…which hinders the generation of income.

Using cryptocurrencies to fund public goods without taxation is one of the most revolutionary ideas in the cryptocurrency space. But not everything we build in cryptocurrencies is a public good.

I think a lot of our public goods ethos permeates everything in the DAO space.

In a DAO, we act like a public good by avoiding talking about how to make money. We don’t know when or how to get into the conversation because it feels like something’s not right. When we tried to be Regen, it felt too Degen. And, since the DAO attracts a lot of people like me who like to debate theory and ideas (again, that’s not necessarily a bad thing), we might be circling a forum post for years.

In a recent issue of “I Pledge Allegiance”, Hasu talked about how DAOs typically give all their proceeds to token holders, without keeping any tokens to run their business and bring in profits. They hoped that these token holders would reward them by being active contributors or participating in governance, but the reality is that most token holders just sold their tokens.

In this case, it is critical to clearly define the DAO’s mission and place in the ecosystem early in the organization’s creation process. Does the DAO build a public product and fund a small core team to keep it running? Does a DAO want to deliver a product, make a profit, and hire a large team? In a DAO, it is important to make such critical decisions early on.

While we are in an ownership economy where users gain unprecedented power and ownership, DAOs need to balance this with making enough money to take care of their core team. If we treated every DAO as a public good, then taking care of the core team would never have happened.

“The future of work doesn’t have to be bad” – the best thing I’ve heard on twitter

I talked to some DAO service providers on Twitter Space, and my favorite quote I heard that day came from Cokie, the founder of Twali: “The future of work doesn’t have to be bad.”

Because right now, if you’re trying to make a living as a full-time DAO contributor, there’s no denying that the jobs of the future are going to suck.

You might hop between multiple DAOs trying to get bounties and take on a range of roles. You’re dealing with coordination nightmares and endless meetings. You’re trying to progress on a career path, not follow the crowd. You’re paying for your health care out of pocket, and you may struggle to get a loan to buy a home.

The future of work doesn’t have to be like this. That’s what motivates me to continually strive to make The DAO better every day.

And profitability is a big part of that.

We literature and history nerds will find out. But we can’t figure it out if we don’t refer to past businesses, cooperatives, governments, and corporations.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/how-has-dao-made-money-so-far/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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