Inventorying the 15 types of DAOs: how to reshape the world?

Unless you’ve ever tried to navigate financial regulation, set up a payroll, or build a charity, it’s hard to understand how revolutionary a Decentralized Autonomous Organization (DAO) is. The former involves recruiting trustees, choosing an organizational structure, writing governance documents, and obtaining approval from the National Charity Commission, along with supporting documentation and proof of income, which can take years. By contrast, a healthy Aragon DAO with transparent fiscal, democratic decision-making, as an autonomous digital jurisdiction, can fund projects in under 5 minutes. DAOs are not subsidized by the government like charities, but the subsidy benefits obtained by the latter are far less than the time and management costs consumed. Once society understands how easy it is for DAOs to self-organize in this way, we will see DAOs undergo a Cambrian-like explosion, just as the Internet revolutionized the way communications.

The DAO first appeared in 2016 and got off to a rough start, when Slock.it launched “TheDAO” on Ethereum to coordinate investment and governance of TheDAO’s token pool. At the end of the 4-week sale, $150 million worth of ETH was deposited and 1.2 billion tokens (0.01 ETH per unit) were distributed. In hindsight, this was an unbearable weight for the young DAO. Solidity (the language used by TheDAO smart contracts) is only a few months old and lacks the documentation and adequate testing required to implement deployments. On June 17, 2016, attackers used recursive calls to execute a “reentrancy vulnerability” and siphoned off 30% of the treasury funds. In hindsight, the Ethereum community decided to hard fork Ethereum from the block height 1,920,000 before the hack and learned from the experience.

That said, the DAO is still very early on the adoption curve – the equivalent of a 56k dial-up modem on the internet timeline. This is not just because of how foreign cryptocurrencies are to the masses, and not just because of the complexity of choosing a DAO framework, but a large degree of legal uncertainty. Currently, jurisdictions such as Wyoming do allow DAOs to register as LLCs, but founders still risk being penalized by securities laws if they promote tokens to unaccredited investors. But in theory, any DAO that succeeded in delegating all control to token holders would have the same status as Bitcoin or Ethereum: due to the lack of substantial control by any one person or company, there is currently no The SEC counts as securities. In addition to this (understandable) hesitancy by developers in dealing with financial authorities, DAOs have significant technical hurdles to overcome before transactions can be fully executed collectively and confidently go beyond the confines of securities laws.

Despite these uncertainties, DAOs are still evolving at an incredible rate. This post can only cover a small subset of existing projects, and new DAO use cases are being built every day. Aragon started out as a dream to increase governance iteration rates, and we can clearly see it being realized today.

developer collective

Developers, educated on remote collaboration through tools like Github, are the most critical resource for building a Web3 infrastructure, so it’s not surprising that DAO sponsors are first-time developers.

BadgerDAO

‍BadgerDAO is a community dedicated to bringing Bitcoin and its collateral to DeFi. Most of Bitcoin’s bridges into DeFi are centralized, so in the absence of a legal entity, BadgerDAO members collaborated to fund and build a synthetic tool called $DIGG that uses elastic supply to track Bitcoin’s price, Stick to the hook. They also built a yield aggregator called $SETT focused on the $WBTC asset. The governance of the DAO, including its treasury, is governed by $BADGER tokens: any vote requires 10% of the tokens in circulation to participate, and more than 50% of the quorum is required to take effect after seven days.

Gitcoin

‍Gitcoin is an ecosystem of developers and contributors who all collaborate in the form of DAOs to build a decentralized network. Since 2018, they have distributed $22.8 million to more than 1,600 Web3 projects, a 300% increase in the first quarter of this year compared to the previous quarter. Aragon is currently sponsoring a new dGov category for its Gitcoin grants program, offering 50,000 DAI of matching funds over two rounds. The first round, GR10, has raised $1.1 million in community funding from around 300,000 individual donors, all approved by the Gitcoin community through off-chain voting. Some of the funded projects include research into ‘commitment voting’ by the RMIT Blockchain Innovation Centre and The Wellbeing Protocol’s open source financial and governance tools for low socioeconomic communities.

API3

The interface between the distributed ledger and external data is a weakness of the DeFi stack, as the blockchain cannot directly query APIs. Instead, they must rely on third-party notary services called oracles to transfer data, with varying degrees of decentralization. To completely close this gap, API3 is building a multi-chain compatible network, governed by the Aragon DAO, to incentivize API operators to serve their own oracles. This is achieved by a free and open source middleware called Airnode, which connects any web API directly to any blockchain application.

In order to join the DAO, Airnode operators can stake $API tokens into API3’s insurance contracts. This generates weekly staking rewards that pool their operational risk with other DAO members and grant them voting rights.

‍Worker collective

Most workers no longer expect to have a job for life, and salaried positions are increasingly being replaced by freelance jobs. DAOs can fill the void left by the eclipse of traditional unions, as the legal and practical barriers to unionization cannot affect decentralized autonomous organizations. Strategies to combat unequal treatment can be coordinated and funded globally, and voted on to decide what is best practice.

There were guilds before unions. The most powerful medieval guilds were so successful that they maintained high standards in the industry they still exist today and existed as “evergreen corporations”, protecting their members with their huge coffers. Raid Guild and dOrg focus on Web3, referencing this ancient collective tradition of workers in their design and development agency. Through shared resources and selective recruitment, they also co-fund good projects and set global standards for work in their fields.

art collective

As yields in traditional money markets fall, art as a large asset class is only going to get bigger. The art market further reduces the friction between buying and selling to attract more capital. Now, the industry is beginning to explore how decentralized currencies and organizations can accelerate progress in the art market. The most high-profile adopters so far have been auction houses Christie’s and Sotheby’s, both of which sell NFTs and offer some cryptocurrency payment options. DAOs have the potential to bring this trend to an end by vertically integrating entire industries, from commissioning and curation to buying and ownership.

KnownOrigin

KnownOrigin is an NFT marketplace that tested the concept of an art DAO with OsakaDAO in 2019. As a decentralized collective of patrons, they raised $900 and then, acting as a gallery, they sold everything for a 56% profit. After deducting the original commission, 5% of the money is returned to the artist, and the rest remains in the DAO’s vault at the discretion of the members.

PleasrDAO

PleasrDAO started as a Telegram group to buy an NFT called x*y=k on Foundation, created by an artist called plpleasr. The piece eventually sold for 310 ETH ($525,000) and seeded a DAO that now hosts some of the most iconic NFTs in cryptocurrency.

community collective

As the user experience of DAOs improves – especially with the advent of “no-code” solutions – a growing community of non-developers will begin to collaborate to pool their resources into DAOs due to the trust guarantees provided when dealing with money management . Before DAOs, collectives were limited to a single jurisdiction if they wanted to avoid currency conversion costs, and expensive legal frameworks if they wanted to avoid fragile informal agreements. Many viable projects simply won’t get off the ground because of the frictional costs involved. This amounts to a huge waste of potential worldwide. Thankfully, this is starting to change, and traditionally under-resourced or under-represented communities are making their voices heard on merit rather than privilege.

Zebpay – Women’s DAO

eToro’s 2021 study found that female users make up only 20 percent of its platform, and other companies report similarly low levels of female participation. To help address this gap, Zebpay has launched a female-led DAO, powered by Aragon. New members are accepted only by majority agreement, and any vote must reach a 60% consensus to pass. The DAO is currently working on a project to help rural women in rural India mine Bitcoin for financial independence and empowerment by building solar panels. Creating such a permissionless decision-making platform helps women bypass unfair traditional systems and compete for capital and influence on a level playing field.

DisCO

Community collectives are one area of ​​organization where the DAO’s structure is particularly unstable. DisCO is a “distributed cooperative organization” that uses an open corporate governance model to coordinate commons-oriented work, rooted in feminist economics, which sets it apart from the rational, transactional nature of many DAOs. Their social and environmental divisions are similar to public or private partnerships, where nurturing shared public resources is as important as economic production.

social media

Once social networks become too popular, they tend to dissipate and lose their purpose. For example, after Facebook lost its credibility feature to Instagram, it quickly became a platform for petitions and special interest groups. This tendency to preach is being catered to by a new generation of Web3 social networks that combine social groups with special interests. As a result, social relationships become more purposeful in nature, based on the unified mission of each DAO.

Technology integration has also become tighter. To filter out tepid members, FWB (Friends with Benefits) uses a token to allow access to its gated Discord groups. Aragon recently partnered with the Witnet decentralized oracle to provide DAOs with off-chain “optimistic” voting using only emoji reactions via Discord.

Metaverse/Virtual World

In the early days of the Internet, Second Life emerged: an online virtual world with its own local currency and real estate. Second Life’s “Linden Coin” is in many ways the conceptual origin of cryptocurrency, and history has now completed a cycle with the emergence of Web3’s own virtual world.

Decentralized

Decentraland claims to be the first fully decentralized Metaverse by throwing away the private keys to its founding smart contracts. The rest of the existing smart contracts are controlled through the DAO and Decentraland’s assets. $MANA is Decentraland’s native governance token, and token holders can vote on issues such as security committee membership, development grants, land and property policies, what wearables are allowed in Decentraland, and moderation of content.

asset Management

Asset management is perhaps the most typical use case of DAO crypto-native: it also promises maximum capital distribution. The efficiencies gained by DeFi’s low-friction architecture translate into relatively high interest rates for stakeholders and investors looking to get a yield on their capital. Once Ethereum switches to proof-of-stake by the end of 2021, the economic efficiency of the entire network will be greatly improved, and there will be no need to fund proof-of-work mining and hardware arms races, so it is expected that its relative yield will improve further. In fact, as marginal revenue approaches marginal cost, staked Ethereum may converge to the “base rate” of DeFi across the crypto-economy.

In theory, collective intelligence can make the allocation of DAO funds more rational and efficient when aggregating the experience and insights of multiple independent agents.

Another key point of DAOs from an asset management perspective is their transparency in the use of funds.Using a DAO allows all stakeholders to track spending and holds the DAO accountable. Such as Aragon DAO’s budget association, which is used for day-to-day transactions to provide transparency on the use of funds for all stakeholders.

DecentralizeWSB

Chamath Palihapitiya, CEO of Social Capital and chairman of Virgin Galactic, called Reddit group r/WallStreetBets “the world’s largest hedge fund” after panelists found that short interest in NYSE:GME was greater than the stock’s float, pushing prices from $18 rose to $340, forcing professional institutions to cover shorts.

DecentralizeWSB is a nascent attempt to organize the r/WallStreetBets movement into a DAO where investment strategies can be voted on and executed. About 20,000 signatures follow so far.

PieDAO

PieDAO provides cryptocurrency asset management in the form of index trackers and high-yielding “PieVaults”. The composition of the vault is entirely determined by $DOUGH holders, who also earn a portion of the fees generated by the platform. PieDAO also introduces the concept of “meta-governance,” whereby any governance tokens held in PieVault will be automatically delegated to PieDAO, giving $DOUGH holders the right to vote in the protocol’s governance decisions. This is equivalent to individual ETF holders being able to vote on internal decisions of securities companies.

BitDAO

DAOs are primarily grassroots disruptors, but recent activity shows that they can quickly reach Sequoia’s magnitude. BitDAO recently raised a whopping $230 million from investors including Peter Thiel, Pantera Capital, and Dragonfly Capital. $BitDAO token holders will vote on where their funds are invested, making it one of the largest DAOs in the world with assets under management.

venture capital

The advantages of asset management under the DAO structure also apply to venture capital.

AngelDAO

Resembling a small family business, AngelDAO consists of four founders with equal voting rights who pool their skills to identify and manage investment opportunities in distributed systems and decentralized finance. With their administrative burden limited to the DAO and their own personal finances, founders have more time to provide technical, marketing, and community support for the projects they invest in.

Metacartel Ventures

VentureDAO is a sub-DAO of the MetaCartel ecosystem that differentiates itself from traditional venture capital firms by offering relatively small funding rounds to cryptocurrency-native projects with a lot of additional support in building a strong user community. Currently, VentureDAO straddles the world of cryptocurrency and venture capital by wrapping its Ethereum smart contracts in a Delaware LLC, which does limit its ability to admit new members without permission. Instead, membership is dictated by the ability to unilaterally “exit in anger” with access to the DAO’s full share of assets at any time. So far, they have raised pre-seed, seed, and Series A rounds for 20 projects including Rarible, Zapper, and PoolTogether.

DuckDAO

DuckDAO has gone a step further and built a complete ecosystem of fixed-rate, staking and NFTs around its incubation service, leveraging the resources of around 25,000 members to support around 50 investments.

Insurance

Fundamentally, DAOs pool risk and reward, taking advantage of the stability afforded by such economies of scale. No industry understands this better than the insurance industry, so it’s natural to think that companies managing risk will start exploring how DAOs can defend against their risks.

One King

UnoRe is working with Aragon to develop a reputation-based DAO to manage a reinsurance system where insurers cede a portion of their risk portfolio to other parties to reduce the likelihood of having to pay large debts due to claims. Reinsurance is a huge asset class, but has historically been hard to come by for all but the largest investors.

Uno Re’s broader vision is to create a platform for innovative insurance products, provide retail investors access to risk pools, enable traders to buy and sell risk instruments, and ultimately create a marketplace for freelance actuaries.

Trust Fund

Trust funds have historically been reserved for those with the resources to set up and manage complex legal structures. But now, the DAO can operate as a virtual trust fund that only requires an Ethereum address to get started. This easy access opens financial doors to younger generations who don’t have the opportunity or instinct to save like older generations. Additionally, DeFi’s superior yields should help them get a fairer proportion of total socially investable assets.

Trusts aren’t just about parents who want to set aside money for their kids: gamers on Twitch or YouTube stars can have full-fledged careers before they hit puberty, so kids protecting their wealth will be an increasingly normal use for DAOs . In a virtual world, the question of who is believed to have stewardship still applies to traditional finance, but in the event of a dispute, on a platform like Aragon Court, arbitration is far quicker and cheaper than any family law case.

Company/Project Fundraising

DAO meets all the requirements of a well-targeted organization including: full leadership involvement, specific goals, clear communication, consistent motivation, full empowerment of employees, defined core values, performance indicators and beliefs, etc. DAO meets these requirements of EY Ireland . DAOs can even use KPI options to incentivize performance. Aragon Client already includes a fundraising module that enables crowdfunding to transcend any geographic or legal barriers, and, as the world moves toward a more purposeful economy, this combination of human and technological factors is essential for raising and deploying capital. A particularly effective dynamic.

VitaDAO

DAOs are particularly useful in areas where current incentive models run counter to societal goals. The best example of this is the field of intellectual property (IP), which is a veritable “dark forest” of discordant incentives. Invention companies often find themselves challenged by professional “patent magnates” who have registered numerous patents for the sole purpose of enforcing unwarranted claims, even though they have not used the patented technology themselves. An unusual fact in the pharmaceutical industry is that because natural products cannot be patented, researchers are incentivized to focus their efforts on creating new compounds rather than discovering naturally occurring ones. Not only is this very inefficient, but it also means that rainforests are only treated as wood, the living dispensaries they should be!

VitaDAO is one such decentralized collective focused on longevity research, and they set out to redefine the pharmaceutical industry’s broken incentive structure through democratized access to intellectual property.

Human Capital Contract

In the history of the Internet, there have been various attempts to tokenize human capital. In 2013, startup Upstart allowed students to sell a portion of their future earnings in exchange for capital investment. In cryptocurrencies, Ben Gravis was the first to tokenize himself on the Zap protocol, and in other projects, we’ve seen a gradual move towards something that might look like a share index of human potential.

Calaxy

Brooklyn Nets point guard Spencer Dinwiddie pioneered the space by becoming the first athlete to tokenize himself on Ethereum. The NBA ruled that his actual contract could not be transferred to any third party, so he issued a Professional Athlete Equity Token (PAInT) backed by the assets of a newly created LLC. Only 9 of the 90 tokens were sold, but his experience laid the groundwork for him to create Calaxy: a platform for creators to issue tokens in their own name and find their value on the open market. As the concept matures, we may see a migration from centralized services to a more liquid, permissionless marketplace where anyone can issue their own tokens, not just athletes and celebrities.

Fan economy

Fan ownership of sports clubs has matured, and fan bases are growing in strength, as evidenced by the recent dispatch of the European Premier League. A network of scouts around the world can collaborate as a DAO, funding promising players in exchange for a percentage of their future earnings. If fan-owned clubs take on this responsibility themselves, they can vertically integrate the entire ecosystem of scouts, agents, coaches, and managers, all funded and managed from one DAO, the ultimate “fantasy league.”

The model could potentially be extended to all industries: music fans would become owners of record labels and vote on newcomers, art patrons would host biennials, and theatre company DAO would vote on new productions.

Free People / Co-living / Nomadic Communities

Individual occupants living in a building or apartment complex often run insurance or a “sink” fund to mitigate any shared liability. The structures of these funds are often rather awkward LLCs or trusts that require quarterly reporting and can incur huge compliance costs. DAOs offer a more gregarious alternative, where funds can be pooled together—even earning interest—while waiting to be used for any contingencies.This functionality could also extend to digital nomad communities like Permatek, whose members will stay for a season before a transfer and pass their membership tokens to the next guest.

Dtravel

Davidson and Rees-Mogg, in their 1999 book The Sovereign Individual, articulated an argument that microprocessors would facilitate the transfer of power from centralized institutions to individuals. AirBnB epitomizes this trend by empowering homeowners to short-term rent out their space through a mobile app.The long-established hotel chain suddenly found itself competing with a horde of low-spending amateur hoteliers. Power is flowing from traditional repositories and back into the hands of ordinary people. The next step beyond AirBnB will be DAOs like Dtravel, where everyone who holds their native $TRVL token can actively participate in the governance of the organization by submitting and voting on proposals put forward by the representative committee. Funds held in community-managed vaults can be used to grow the network at over 50% lower fees than centralized alternatives.

Media/Entertainment

The publishing industry has been completely upended by the Internet. However, Web3 is proving that there is more disruption on the way. Steemit was one of the first projects to reward contributors with its own tokens. Satellite went a step further and introduced on-chain publishing, where articles and comments are signed by the wallet to verify the author. Mirror is another platform that now offers collaborative publishing, which sounds like the origins of a fully decentralized media organization.

politics

With debt/asset ratios over 400% in some U.S. states and civic institutions around the world grappling with limited resources, mandated assemblies and community groups are starting to take the lead. This could be anything from community litter pick-up groups, to neighborhood safety, city voting initiatives, or even a national system like DAO in Estonia. A DAO like this could operate on a one-person-one-vote basis, with non-transferable tokens denoting membership, allowing for the flow of new residents.

On the downside, Davidson and Rees-Mogg warn in The Sovereign Individual that the demise of the government could increase the “return of violence” in the short term, requiring communities to address safety and security issues. Previously, in the words of Thomas-Piketty, the bipolar confrontation between collectivism and individualism tended to inhibit progress, but on the plus side, DAOs offer a way to combine individual innovation with collective action.

From a broader perspective, the DAO is effectively the epitome of a political party with integrated finances and directly responsible civil services. Signal platforms like Aragon Voice enable policymakers to conduct quick polls of community sentiment in an efficient and transparent manner before devoting significant resources to preparing for a vote, preventing damaging policy mistakes.

In contrast to traditional politics, DAOs typically focus on one vertical and seek to build expertise in that area, rather than trying to manage multiple domains. DAOs are also largely meritocratic, are globally diverse, and operate more complex voting systems. They were the petri dishes that encouraged governance when Aragon was founded. Decades and gallons of ink were used to perfect the art of congress, but not many were satisfied. Web3 is a grassroots movement that opted out of ideological competition and built a whole new system from scratch. Cold politics makes cold voters, but in DAOs voters get immediate, tangible results from their participation. This becomes a virtuous cycle, and when people see their voices heard, they are more motivated to contribute further.

Who will be the first political party to operate entirely as a DAO? Please keep an eye on this area.

“Water always wins”

In 1996, no one could dream of voting for a flash loan in a decentralized currency with an iPhone in a nomadic DAO in Costa Rica and managing a savings account on Discord while waiting for a 56k modem.However, as DAOs remove all remaining technical and legal friction between trustless collaborators, the possibility of this combination will only accelerate.

History once again proves that bureaucracy, with its information deficits and regulations, will forever be replaced by frictionless alternatives. Plumbers have a saying, “Water always wins,” and the DAO is proving that its dykes will one day burst if someone tries to control the flow of ideas.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/inventorying-the-15-types-of-daos-how-to-reshape-the-world/
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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