See how the physical DAO works through the coffee pop-up store opened by TheCafeDAO?

Over the weekend, a decentralized autonomous organization (DAO) called TheCafeDAO opened a coffee pop-up in Seattle in a test that it hopes will be the first brick-and-mortar business to operate entirely through a DAO structure.

This humble coffee stand outside the NFT Museum in Seattle has just one item on the menu — a $5 cup of freshly ground coffee.

Create a coffee pop-up to test the operation of the physical DAO

The DAO bills itself as a “cafe for everyone” and its mission is to open a coffee shop run by the DAO. Pioneer a new business model and create a business that rewards growth and profit by sharing it with the entire company. Customers and employees are awarded “coffee tokens” which are used to grant governance rights and discounts on each purchase. The token itself is still in the alpha stage (Alpha: is an internal beta, generally not released externally) and is not yet connected to any blockchain.

The project’s official website shows that the easiest way to earn coffee tokens is to buy coffee at the project’s distribution event. Also, submit a coffee proposal to the Discord #Proposals channel to help improve this project. Currently CP1 – Coffee Proposal 1 is complete, which is primarily a low-commitment solution to (1) test token economics, (2) identify committed members, and (3) establish order among a group of strangers . Also, the CP2 – Seattle NFT Museum proposal is complete. Seattle NFT Museum opens its first physical store run by DAO as a pop-up coffee shop, open from 4/30 to 5/01.

The pop-up coffee shop opened by TheCafeDAO is the latest in a series of DAO experiments that appear to have been kickstarted by the high-profile but ultimately failed debut of the Constitution DAO last November, proving to many that the DAO can be used in real life. potential and difficulty.

The idea to create TheCafeDAO was first floated in a Reddit post last August by one of the DAO’s founding members, Dan Car. Dan Car asks: “What if we do a decentralized Starbucks?”

The idea quickly gained traction, and five other core members of the organization saw the position and volunteered for leadership roles to bring the concept to life. While the group’s focus in recent months has been on its Seattle pop-up store, the DAO’s founders hope it will eventually become its own larger, self-sustaining entity.

Since the DAO is still in its early stages, the founders also recognize that decision-making is not that decentralized yet, although this may change as the community continues to grow. “Our goal is to get Discord big enough so that we don’t have to decide the future of the DAO ourselves anymore,” Dustin Tong, another DAO founder, said in an interview. “Just yesterday, someone proposed The idea of ​​running a hot dog stand with the DAO. That would be awesome.”

Token Economics

test phase

Coffee Token has not yet been launched on any blockchain. TheCafeDAO is currently testing TheCafeDAO’s token economics by simulating the minting and distribution process using ad hoc procedures using ETH signatures, Google Sheets and surveys. Although this is an imperfect representation of the blockchain, this process allows TheCafeDAO to test, learn and iterate quickly and economically before finalizing a solution. During the M1 – M2 testing phase, TheCafeDAO will mint and distribute iCT (imitation coffee tokens), and plans to airdrop real CT to iCT holders at launch. Check out the current distribution of iCTs on the Distributions page and learn how to earn iCTs on the Earn Coffee Tokens page.

casting principle

CT is also used as a governance token to govern the DAO. Individuals/groups with more CT have more voting power on the DAO. CT must be distributed equitably according to the following guiding principles: Incentivize those who add value; prioritize those who are actively adding value; de-prioritize those who are no longer adding value.

Coffee tokens are minted when the Café DAO generates revenue and burned when fees are paid. The following diagram describes the casting process:

(Step 1) A customer who buys 12 oz of coffee for $5.00 will mint (Step 2) 1 CT (Coffee Token). The Treasury will keep the CT and $5.00 until operating expenses are calculated. Assuming operating expenses total up to $3.50 per $5.00 of coffee, (step 3) the Treasury will burn 0.7 CT and spend $3.50 to cover operating expenses.


(Step 4) Coffee tokens are distributed to the following 3 parties: customers, employees and DAO. The DAO Treasury will keep its own CTs while ensuring that all CTs in circulation are backed by the appropriate amount of USD. The allocation of CT to each party will be determined by DAO voting. Non-token holders can exchange their tokens for fiat currency, or hold them for governance, and a cup of coffee is equivalent to one vote in any proposal made by a DAO member.

The role of CT

1 CT = 1 vote

Token holders have proportional voting rights to govern the DAO. Token holders can vote on what to do with the CT held in the DAO treasury.

Convert CT to USD

The DAO treasury will always cash out every CT that is exchanged for USD priced coffee and burn the exchanged CT. This is possible even if all token holders want to exchange their tokens for USD, as the DAO Treasury will always hold the equivalent of USD per CT in circulation.

Swap CT for coffee

Since CT is worth the price of 12 ounces of coffee, CT can also be exchanged for a cup of coffee. However, CT cannot be purchased directly from Café DAO. All CTs are minted from sales and distributed through the process shown above under “Distribution”.

Notably, Café DAO will always offer 12 ounces of coffee, equivalent menu item or coffee price for 1 CT. However, the DAO will not attempt to control the price of CT on any secondary market, whether it is above or below the price of a cup of coffee. While it may be relatively stable, no attempt will be made to correct any decoupling secondary markets.

Fundraising Methods

Coffee Tokens cannot be directly minted by purchasing CT to raise funds. Instead, the Café DAO funding mechanism allocates future DAO CT allocations. In order to be eligible for future CT distributions, individuals need to improve the DAO by one of the following ways: create a coffee proposal, execute a coffee proposal, or finance a coffee proposal with a loan.

Here’s how Café DAO raises money to execute projects that cannot be self-funded. (Step 1) Token holders submit CP (Coffee Proposal) to improve Café DAO. The DAO will review and choose to approve, reject, or request more information from the submitter. If the proposal passes, it goes to (step 2) the “DAO Review Queue” where the DAO needs to determine (1) how much the proposal is worth, (2) the terms of the DAO loan, and (3) how to incentivize the team to execute the proposal. When the DAO has finalized all the details, (step 3) the DAO will open the proposal for lender funding and identify an executive team to work on the project. After the project is completed, (step 4) the repayment period begins. In the example below, the amount required to fund the proposal is $100. The Café DAO will still distribute CT to clients and employees, but will redistribute the DAO’s CT share to repay the executive team and lenders. The coffee shop needs to generate more than $100 in profit to repay the lender’s principal + interest and the executive team’s interest.

Preparation of permanent storefront

While the coffee pop-up has only been open for two days, members of the DAO are now looking to raise funds to create a permanent storefront somewhere in the Seattle area.

TheCafeDAO is not the first DAO to use physical location as an extension of an online community. NFT (non-fungible token) based projects like LinksDAO and PizzaDAO have similar plans, using the DAO structure for fundraising and operating mature real-world operations.

Posted by:CoinYuppie,Reprinted with attribution to:
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