ShapeShift, DAOs and the future of work

Erik Voorhees returned to the DJ industry during the COVID-19 outbreak. After the bars and restaurants closed, his friends held a party in the forest. The 37-year-old cryptocurrency entrepreneur was in charge of DJ work. It turns out that he has been an intermittent amateur DJ since he was 15 years old, mostly playing progressive home music.

ShapeShift, DAOs and the future of work

I was drinking in a bar in downtown Denver and asked, “Are you called DJ ShapeShift? Or a worse DJ name.”

“No, there are better DJ names.” He said with a smile.

Voorice looked healthy, relaxed and happy. This is very different from the situation when I met the CEO of ShapeShift (a crypto exchange) in February 2020, a few weeks before the COVID-19 outbreak. That is a different world. A different kind of ShapeShift. Different voris. At that time, I visited him at his ShapeShift headquarters. The headquarters house is very nice, with luxurious meeting rooms, fashionable artworks hanging on the walls, and views of the Rocky Mountains.

We met at the bar for a reason: the office ceased to exist, it was closed. Although the new coronavirus pandemic does force remote work in most parts of the world, the changes in ShapeShift are different. The team took a more radical step: Not only did they close the office, their members were working hard to dissolve from the company’s existence.

“Today, we announced that ShapeShift is decentralizing.” Voorris announced on July 14, explaining that the company will transform into a decentralized autonomous organization or DAO. Starting in January 2022, the corporate entity will no longer exist. After this transformation, there is no company and no CEO. “There is no board of directors, no shareholders. No employees, no bank, no office, no OSHA poster for the National Bureau of Statistics.” Voorris posted on his Twitter account.

ShapeShift is not the first DAO, on the contrary DAO is everywhere. The long-term and growing list includes UniSwap, Maker ( MKR , +7.61%) DAO, ThorChain, Dream, SushiSwap, OneHive and DXDao. Many of these are decentralized exchanges, such as composite exchanges. Some are chain venture capital DAOs, such as Flamingo, an online community that unites to buy non-fungible tokens (NFT). There are also some stupid organizations, such as a DAO called “Krauss”, which is trying to buy the franchise rights of the American Basketball Association. Its Twitter page boldly asserted: “The players will not win the championship, the DAO will win the championship.”

These DAOs are spreading, growing, and reproducing. According to DeepDAO, a website that collects and aggregates industry statistics, as of August 7, 2020, there are 2,200 DAO members or token holders. Today, the number of members and token holders may reach 714,000?

According to the same source, in August last year, the total value of these DAOs was $63 million. It is now $7.3 billion.

They have not yet attracted widespread attention from mainstream media, but many blockchain insiders have been optimistic about DAOs for many years, even if they are just scattered ideas. Maybe now their time has come. Will DAO be the next NFT?

Back to Voorris, there are some things that make him different from ShapeShift and other DAOs. This is a real company. As far as I know, no other traditional company—a company with employees, W-2 tax returns, cubicles, fax machines, doormen—try to transform itself into a DAO. There seems to be no precedent in the history of business.

There is also the example of the Vossian, who is the living link between OG Bitcoin and the new chapter of decentralization. He has been mixed for most of his time in encryption. In May 2011, he worked for the Free State Project in New Hampshire, which was made up of a group of radical liberals (“some of them are very annoying, some are very smart”). He met Charlie Slime there and was hired as the third employee of the Bitcoin exchange. The fate of the Bitcoin exchange was bad, and it was supported by Winkklevii. Then they fell out, followed by litigation.

“The revenue per customer of KYC providers is higher than ours. This is ridiculous.”

He launched the online game Satoshi Dice, the game’s transaction volume once exceeded all other activities on Bitcoin combined. You can still see the online forum where Voorris announced Satoshi Dice in 2012. In that post, he joked: “You don’t know… I poisoned the IT coins people won from the website. Then, once the owner dies, I take them back. This is my income model. I think this is quite reasonable.” This is an era where jokes still exist, a simpler era.

But switching to DAO is not a joke. This is a high-risk gamble that may affect the entire encryption system. So I am here to ask Worthys two simple questions: “Why? Then why?”

At the afternoon reception, Voorris began to elaborate on his thoughts and practical reasons for the change (but at its core, you almost feel something deeper at work, as well as something more personal-one Kind of atonement.)

Let’s go back to the beginning. In the first incarnation of ShapeShift created by Voorice in 2014, you can easily exchange one token for another without providing any personal data. For legal and regulatory reasons, they were forced to adopt Know Your Customer (KYC) rules in 2018. Most users hate it, even Voris hates it. As he revealed to me last year, this destroyed the company and wiped out 95% of users. As he tells me now: “It feels like suffocation.”

He hates collecting customer data. He hates spending money to store it. You almost feel that he hates this special ShapeShift he has become. But if he wants to run a mature company, he feels he has no choice. “We can’t fail to obey the law,” Voorris said. “I don’t plan to take this risk. I will change the rules, but I will not violate clear laws.”

He also admitted that the company “must have been struggling for a few years” and was sometimes desperate. In the darkest turning point, Voorris realized that each of his customers was losing money, “because each customer of the KYC provider makes more money than us. This is ridiculous.”

Voorris looked at me and said, “I’m just a little angry, what am I doing? I’m not proud of what we are building here. I don’t think the country is proud to monitor the innocent.”

Over the years, he has been following the rules and running the store in the way a competent CEO should, and he has suffered a lot of headaches because of this. In some respects, the solution became obvious. If you feel bound and suffocated by the rules, what is the logical — if bold — choice?

Voorris looked at me: “You changed the rules of the game.”

New rules

This idea quickly became popular during the flu pandemic. Like most countries in the world, ShapeShift becomes distant in March 2020. Like most countries in the world, the team is amazed at how efficient they are when they work on their own schedules in their own homes. When… dispersed, they seem to work better. Voorris had enough time to think, to reflect, and even to find his soul.

He became obsessed with decentralized finance (DeFi). Voorris was particularly inspired by Uniswap, who believes that Uniswap has “the same magic power as the early metamorphosis.” He likes Uniswap “no middle layer, super low friction, they don’t have KYC”. Uniswap has a centralized company, but a decentralized agreement. Voorris did not deny that Uniswap “has a much larger business volume than ShapeShift, and is even comparable to Coinbase on some days .” Perhaps most importantly, Uniswap does not seem to have strict regulatory requirements. Can ShapeShift go that way?

With Voorice’s idea of ​​the decentralization of the ShapeShift exchange (he announced this idea on April 15, 2021, tax day, it’s no coincidence), he began to consider further large-scale measures-decentralizing the entire organization . It feels good. It felt like returning to his ideals. Voorice believes that the spirit of encryption can be boiled down to five principles: decentralization, immutability, borderless, censorship resistance, and transparency. He told me: “A centralized company cannot adapt well to these things. It is subject to jurisdiction. It usually only provides services to certain countries… It usually purchases from close range.”

He cited the example of Coinbase. “I don’t want to hate on Coinbase.” He quickly clarified, “I am a big fan of Coinbase. It is the most important company in all encryption technologies.” “At the same time, I don’t know what their slogan is today. But it may be a bit like’World Without Borders’. They can’t be. They can’t be World’s Without Borders.” Although he respects the intention of bank accounts, he predicts that’they will act more and more like banks’,” If you get too close to the star, you cannot escape its gravity.”

This is the ideological reason. But as any awakening Marxist will tell you, ideology itself can only get you so far. They have practical reasons for the conversion. For this, we can turn to the co-founder and chief operating officer of ShapeShift, whose public name is “Jon ShapeShift”. (For “OpSec reasons”, he does not use his full name.)

Jon told me: “The nascent organization will be faster, leaner, and more free. He is tired of the new DeFi protocol.” He said: “With our concentrated resources, we can’t keep up. No matter how much we increase. Engineers, no matter how much money we raise, the inherent bureaucracy of a centralized company means you can only do so many things at once. Everything needs to go through product inspections, legal inspections, engineering inspections, so many inspections and inspections.”


From Jon’s view of the new model, maybe one team wants to try the integration between ShapeShift and OpenSea, while another team wants to try other things, such as cooperation with Dream. They can do both at the same time. No red tape. There is no written documentation from a lawyer. “We, as a centralized entity, must constantly make choices and prioritize, which means that some issues are always left behind. On the contrary, more progress can be made in multiple directions at the same time.” Jon said. Think that DAOization is “just a logical competitive move.” To some extent, this has pushed the concept of a “free market economy” to the forefront: even for-profit companies are too bloated and bureaucratic to compete. This is Voorice’s vision: no more conference rooms, no more meaningless meetings, no more corporate infrastructure. All of these will disappear. The rest is the actual work of DeFi.

“However, I am still confused about how all this actually works.” I asked.

“Oh, or take accounting. A lot of accounting doesn’t need to happen anymore.” Voorris said that the DAO does not file taxes. So all these dirty tax preparations? In addition, Voris said: “Because the DAO is on the blockchain, it will be reviewed every second.” Voris seems to be excited about this new minimalism, like a man who cleans up his garage and marvels at all new spaces. People.

So you were fired?

But Voorice did not clear the garage. He runs an honest company, which means he has a responsibility. “I must make sure that I have not deceived my three supporters: users, employees, and shareholders.”

I am particularly curious about the staff. There are about 65 in total. Many people (presumably) rely on ShapeShift to pay salaries, medical care, rent, and mortgages. So how can one carry out a radical reform and do it in a way that is not a bastard?

Voorice gives employees 4 to 6 months’ notice, an additional two months of severance pay, and most notably, a series of Fox (FOX) tokens issued to all employees (via smart contracts, issued every 15 seconds) ) To alleviate this blow. “At the current price.” He said, “their monthly income is higher than their salary.” (Of course, unless the price happens to fall.)

Worris not only distributed FOX tokens to employees, but also distributed the tokens to the community. ShapeShift claims to have implemented “the largest airdrop in encryption history” to more than 1 million ShapeShift customers and DeFi enthusiasts. Thousands of users on DeFi platforms such as Gitcoin, SushiSwap and Desent woke up and suddenly found FOX tokens in their wallets. This seems to be a shrewd play. Nick Hotz, an analyst at Arca that studies DAOs, said the move “brought financial benefits for users and expanded the stakeholder community.” The tokens themselves become more interesting because now they allow you to vote on the governance of the project. These tokens have also become more valuable, at least for now-since the launch of the DAO, the price has more than doubled.

The following is how DAO actually works. First, it will not be a purely “flat” organization. “We are not completely free from the hierarchy.” Willy Ogorzaly (Willy Ogorzaly) said, he outlined most of the plan. Ogorzaly is an employee of ShapeShift and is its main product manager. He speaks fast, energetic, and likes DAOs. During the Zoom conference call, he led me through an organization chart, and he explained that different “workflows” will function like the company’s departments—products, marketing, partnerships, and so on.

The token holders will vote to determine the amount of funds allocated to each workflow, and then the workflow leader has the right to use these funds. So, for example, if a product workflow allocates $1 million, it may choose to spend the money on a team of part-time contractors, or it may outsource to another company, or it may even pay actual employees Salary.

This surprised me. I thought that DAO would be a fatal blow to normal employment, but Jon and Ogorzaly said that in the DAO ecosystem, traditional “jobs” are still possible. They envision that some people will work as part-time contributors, some will participate in discreet projects, and some may even be hired as employees (Ogorzaly is excited about another Denver-based crypto project, Opolis, which enables DAO employees to receive W -2 Tax return and get legal salary.)

DAO can’t do everything while jumping. SoeStHIFT is creating a foundation, funded by the Ministry of Finance, which will deal with all the headaches that Dao is not ready to crack. For example, it will handle the maintenance of the actual domain It will manage all code that is still closed source (it eventually plans to open all source code). It will manage the server where the final plan is to be dumped. No existing managers (not even Voorris) will be allowed to enter the foundation. As Jon said, his guessed team will be less than 10 people, “should be considered more of a support function than Run this show”. The ultimate goal of the foundation is to relax its own existence and eventually turn everything into a DAO.

“No matter what he does, Voorris will become the leader of transfiguration.”

Not all ShapeShift employees are on board. “I don’t want to whitewash it.” Voorris said some people would like it. However, Ogorzaly said that most of the employees of ShapeShift have been faithful believers in the concept of decentralized encryption for a long time, and many people hold a lukewarm attitude towards the centralized KYC in the past few years. “When I heard the news that we are decentralizing and returning to the spirit of encryption, I was so excited that I couldn’t be more excited.” He said energeticly.

For Ogorzaly, DAO is Christmas morning. But he admitted that it was difficult for his family and friends to understand what this strange news meant, whether it was good news or bad news. His friend asked him: “Then you were fired?” He would answer: “Well, it’s not true, but it’s kind of.”

So what are these developers and engineers doing? How does ShapeShift make money? This is no longer up to Voris to decide. This will be decided by FOX token holders. For example, the community will decide whether to start charging (not currently available). Ogorzaly said: “I personally will vote against it.” He would prefer to see ShapeShift focus on subsidiary income projects and act as an interface for projects such as OpenSea. Even the fact that Ogorzaly can say this to reporters is amazing. Can you imagine a senior vice president of Facebook happily recording how she hopes Zuck will change the business model?

This kind of transparency is DAO’s “not closed door” spirit. In a way, this is even an inspiring way, a way to empower the community, and the best way to stimulate hive thinking. Aaron Wright, CEO of OpenLaw and legal expert on DAOs, provided an optimistic comparison: Wikipedia. It is decentralized, it is managed by the community, and it is effective. He pointed out that although large technology companies “ have encountered problems as they expanded in scale and increased in importance, Wikipedia has not encountered the same problems. I think this is to some extent a community-first approach. ” He It is predicted that “in the long run, if these DAOs are given long enough constraints”, they will eventually become “more stable and run better.”

Maybe this is true. But they also carry some important asterisks.

DAO’s voice

You can hardly find a more determined advocate of DAOs than Griff Green. He was the first community manager of DAO, referred to as “DAO”, it was a disastrous experiment was hacked $ 50 million, and threatened to Ethernet Square exist. For crypto trivia enthusiasts: “Green told me that DAO should ultimately be named by itself, and’DAO’ is a placeholder name.” He smiled and said: “This is a practical title of king. Once DAO exists, it will be given. Name it yourself. But all sorts of things hinder us.”

Today, Green describes himself as “the founder of a series of non-profit DAOs” and has launched DAOs such as Giveth, Commons Stack, and DAppNode. He is a believer of DAOs, maybe a believer of DAOs. Even Green admits to some challenges that many people overlook. “DAO is hard work.” He said, “We often forget the work required to build a culture and create a truly solid culture.”

Anyone who has ever done desk work-even someone who has watched an episode of “The Office”-will sneer at things like “company values” or “mission statements.” But these things are very important. “If you look at other organizations, they have human resources. They have proper systems, like’Who organized a bad work committee?’ Who did it? Where did this come from?”

Green said that DAOs often struggle to resolve conflicts because “Gosh, do you know how easy it is to avoid conflicts?” Then there is the question of retention. Green believes that DAO can become a “big economic dream”, but it is also true that people tend to accumulate institution- and domain-specific knowledge. If contributors move in and out of DAO, agitation may incur costs.

Or leadership? The charm of DAOs is that they allow creativity to flourish from the bottom up and inspire everyone to create. But without a CEO, there is no room to imagine Steve Jobs, Cathy Wood, or Elon Musk , whom Voorris thinks are “the only god-like hero I have ever had.” Can a DAO create an iPhone? Can DAO inspire a trip to Mars?

ShapeShift, DAOs and the future of work

Jon admits that this is a potential limitation. “This is definitely part of the trade-off.” He said, “I don’t think we are blinded. We don’t think everything will get better, we have to accept the trade-off.” However, he is not particularly worried about how this will affect ShapeShift, because “Eric…never was a Steve Jobs-style tough CEO…” He also pointed to a decentralized project that thrived without a CEO: Bitcoin.

Also, it may be naive to think that the DAO is truly without a leader, even if it lacks a nominal CEO. Green made the following prediction: “Worris will become the leader of ShapeShift, no matter what he does.”


At least today, ShapeShift still has its leader at the top of the organization chart. The leader was ecstatic about getting rid of the shackles of KYC and regulations. Voorice was finally free. No longer storing customer data he doesn’t want to store, no more legal issues, no more “suffocating” issues. Starting in January, ShapeShift will no longer be responsible for these things. Is it that simple?

Uniswap, which Voorris uses as an unregulated DeFi role model, recently restricted access to certain tokens on the grounds of regulatory issues. A debate is imminent. Legal expert Wright said: “How the regulator will treat the DAO is still a bit undecided.” “Why will the DAO’s interests be classified?” He asked, “Are they securities or commodities?”

Wright pointed out that as early as 2017, the US Securities and Exchange Commission “looked at this in the context of the DAO itself. They said:’Look, first, there are not many owners of this DAO; second, there seems to be someone responsible for this DAO. ‘Because of this combination, the benefits themselves are securities. “If all of this reads like nonsense, Wright’s point is: “We don’t have a clear answer yet.”

Wright even helped draft a new law in Wyoming that allowed the DAO to effectively register as a limited liability company, which would limit the exposure to legal liability. ShapeShift will not go this way. “DAO will not register anywhere.” Voorris later told me in a follow-up email, “There is neither reason nor benefit to do this. Registration is equal to not being scattered.” Time will tell whether he is correct.

Finally, we need to acknowledge the views of the cynics. Skeptics may wonder whether dissolution is a way for ShapeShift — to lag behind major companies such as Coinbase, Uniswap, and Binance — to gracefully exit the stage. This is just a cryptographic method that declares bankruptcy, but is it full of enthusiasm?

I asked Voorice this question bluntly.

“I think I would say, look at the incentives.” He said that all insiders’ FOX tokens have been locked for three years. Therefore, if this is the case, everything will fall apart in the next few months. He has the courage in the game. “We want to make ourselves, as executives, employees and shareholders, all consistent on the same incentive mechanism-this is long-term work.”

Not only does Voorice believe that this will be effective in the long term, but he also doubts that DAOs will be the future of the organization-or even replace the company. “I think it can become a model for non-encrypted companies.” He said, “but well, maybe not all companies.” He admitted that this is not suitable for local restaurants, dry cleaners or barber shops. He said that to make the DAO popular, it needs to have an exciting brand or a compelling story, otherwise the community is unlikely to get involved. Or as Voris said: “A urinal manufacturer does not necessarily inspire a community.”

An Urinal DAO would be a good story in “Onion”. In fact, it reminded me of an old article in “Onion” magazine in 2002, but suddenly felt that it was very meaningful. At the time, the largest computer seller was Dell. “The company closes when it reaches its goal.” The onion headline wrote, “We did it.” CEO Michael Dell said in a simulation article: ” When I founded this company, I vowed before we completely changed the way we sell computers. , I won’t rest. Finally, that day has arrived .” With the realization of his goal, Michael Dell cleared his office and fired all the employees. He was very happy that he was about to close down.

This “Onion” article has been remembered by me for nearly two decades, because I discovered that a company would happily shut itself down because of a certain principle, which is ridiculous. That’s what Voorris did, or at least a twisted version. He has no illusions, thinking it will be easy, simple or painless. This is good for him. He seemed to be attracted by this struggle.

“The meaning of life often comes from struggle.” Voorris said that when I entered the bitcoin industry, I thought it was the greatest struggle I could participate in: the struggle between bitcoin and fiat currencies and the banking industry. He vowed not to give up this fight: “We will not win until Bitcoin replaces the global monetary system. That is when I retire.”


Posted by:CoinYuppie,Reprinted with attribution to:
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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