What kind of development will the DAO direction that the venture capital giant a16z is optimistic about ushering in the Polkadot ecology?


On October 28th, a16z, a well-known investment institution in Silicon Valley, announced that it had invested in the social DAO “Friends with Benefits”. The investment amount has not been announced. a16z said it will provide guidance and plans to empower key community members to actively participate in governance through authorization.

It is reported that Friends with Benefits (FWB) is a new type of DAO organization, which is a private club with more than 2,000 members. Joining this club not only requires strict identity verification, but also purchases close to ten thousand dollars in tickets. The main cooperation tool of FWB is Discord, which communicates and discusses or completes cooperation through more than one hundred channels established internally.

This investment in a16z has been called by some people and opened up a new investment track with their own efforts. In fact, when we review the development of DAO, it is actually no stranger to the vocabulary (at least for the blockchain industry Say), but few well-known investment institutions are involved in this field. Therefore, compared with NFT or DeFi, DAO has always been in a non-mainstream development, and the actions of a16z have renewed people’s attention to DAO.

Faced with such a wonderful story, we can’t help asking, “Is the good moment for DAO coming?” At the same time, in the face of a new ecology like Polkadot, what kind of change will DAO bring about? We start along this line of thinking. A trip to DAO.

What is DAO?

DAO, English as Decentralized Autonomous Organization, that is, decentralized autonomous organization, is an organization represented by rules coded by computer programs. These rules are transparent, controlled by members of the organization, and are not affected by centralized organizations, and the financial of DAO Transaction records and procedural rules are maintained on the blockchain.

Although there are many research results in the past history of distributed and autonomous, for example, many people believe that the decentralized organization (Decentralized Organization) was written by the American writer Ori Brafman in 2006 in a book titled ” It is proposed in the book “THE STARFISH AND THE SPIDER”, in which he compares centralized organizations to spiders, and decentralized organizations to starfish, and explains in detail the differences between the two Features and differences. But here we mainly discuss decentralized autonomous organizations based on blockchain technology.

Regarding the concept of DAO, Dan Larimer (the former CTO of EOS) originally proposed the term Decentralized Autonomous Corporation (DAC, Decentralized Autonomous Corporation) in 2013, but the concept of DAO was after Vitalik Buterin absorbed the concept of Dan Larimer And summed it up and created the term Decentralized Autonomous Organization (DAO, Decentralized Autonomous Organization). But according to V God, this concept was partly inspired by Daniel Suarez’s novel “Daemon”.

What kind of development will the DAO direction that the venture capital giant a16z is optimistic about ushering in the Polkadot ecology?

Dan Larimer regards the native blockchain Coin as a stake in a decentralized autonomous company (DAC), and the source code defines the rules and regulations. The goal of DAC is to make profits for shareholders by providing valuable services to the free market. DAC was also explained by Dan Larimer as a decentralized system designed to provide effective products and services to society.
He said: If a complex institution like a bank can be implemented as a DAC, then obviously there are more things that can be implemented as a DAC. (Obviously, the lending project in DeFi now fulfills the main business of the bank-the lending function. The concept Dan Larimer put forward in the past is unfortunately not realized by him.)

DAC is a part of DAO. Now that the company system is mentioned, we can understand DAO from the organization we are most familiar with. The company is centralized and manages the entire organization in a top-down manner. The rules of the entire organization are determined by the top business owner or the board of directors. The main decision is the company’s development direction and goals (what to do), and how to use the company’s current There are human, material, financial and other resources to achieve the company’s goals (how to do it), and determine how to distribute the benefits (how to distribute the benefits). It can be seen that the company is characterized by centralized governance, top-down management, with the highest authority center leading the organization and determining how to distribute benefits.

The DAO is to determine what the organization wants to do, how to do it, how to distribute benefits, and to use code to determine these rules openly and transparently. Then anyone can use their own resources to execute what to do based on these rules in their own way. And get their own corresponding remuneration according to the distribution principle established in the rules.

It can be seen that the company provides products that meet market demand to the maximum and obtains high profits through reasonable allocation of company resources in the production and operation process. However, such an organization method depends on the company’s promotion or operational capabilities, and is also limited by the company’s resources. However, DAO breaks the company’s framework and accepts the injection of any resources with an open mind. As long as the rules are formulated in advance and the rules are decentralized, it can attract a lot of funds and participants to participate autonomously. The resources mobilized are not the same as the general centralized organization.

Therefore, we can summarize several characteristics of DAO.
The first is decentralization. The set rules will not be tampered with by centralized organizations.
The second is autonomy. The driving force of DAO’s operation is often the autonomous behavior of participants, rather than through employment relationships.
The third is tokenization. The realization of DAO requires the participation of Token to determine the weight in the governance process, or some incentive mechanism can be designed to promote the development of DAO. However, it should be noted that the Token here can be a valuable pass, or it can be a worthless point (the latter is often used for public welfare organizations).
The fourth is autonomous rationality. The operation of the DAO is not determined by a centralized organization, but is built, shared, and governed by all stakeholders involved in the DAO. For example, major changes that affect the development of the entire organization are often through all participants. Vote to decide whether to adjust the direction and so on.

Although DAO is a new organizational method, it has the advantages of openness and transparency, prevention of favoritism, co-construction and sharing by everyone, avoiding centralized evil, etc., but it is not a panacea, and there are still some problems:

①The problem of rabble, not all decisions are necessarily correct by the opinions of the majority. How to balance the correctness of decision-making and maintain fairness will be an important solution that DAO needs to explore;

②The personnel mobility is large, the organization may be loose and lack of firm supporters, and it is easy to slow down the development of DAO. How to design some incentive mechanisms or operating mechanisms to make DAO more viscous and participants become more autonomous Strong, it will also be the direction that DAO urgently needs to dig deeper;

③How to better govern the DAO is still being explored, and there are still no universally feasible and long-term proven governance methods;

④ The security involved in DAO will also be affected by the security of the chain itself and the level of smart contract design.

However, any organization will have its advantages and disadvantages. Make good use of its advantages and explore and solve its shortcomings. The new organization method brought by DAO has huge potential to be tapped.

What kind of development will the DAO direction that the venture capital giant a16z is optimistic about ushering in the Polkadot ecology?

Note 1: Due to translation issues, many articles often write decentralized autonomous organizations as distributed autonomous organizations. Here we have to make a distinction. Distributed is just a form of structure or organization, but the real governance behind it may also be centered. For example, Alibaba Cloud as we know it is a distributed architecture, but it is still managed by a centralized organization behind it. But what we are discussing here must be whether it is centralized at the governance level, so the most correct way of writing DAO should be a decentralized autonomous organization rather than a distributed autonomous organization.

Note 2: From Dan Larimer’s description of the DAC concept, it is not difficult to think of why EOS is a DPoS consensus mechanism.

Note 3: Although Dan Larimer regards the operation mechanism of BTC as a DAC, everyone can spontaneously participate in the maintenance of BTC’s ledger, in order to obtain BTC’s blockchain rewards and miners’ fees, and build a huge BTC computing power network . Many people also regard BTC as the first DAO, but the author thinks that Autonomous of the DAO is more inclined to this organization in terms of governance scenarios, and BTC is more of a decentralized organization (Decentralized Organization).
Therefore, the DAO discussed in this article will be more biased towards more applications in governance scenarios, otherwise all blockchains can be regarded as DAOs, so the discussion will have limited meaning.

Why should we pay attention to the development of DAO?

Why did DAO appear?

Before the birth of the blockchain, almost all human organization and collaboration methods were more or less centralized to a certain extent. Although some decentralized or distributed forms are also being proposed, these methods are only to a certain extent. There is some decentralization, but its essence is still centralized.

There are no two kings in the country, no two days in the sky. Since ancient times, we have all known that we cannot form a multi-management governance policy. But this is because centralized governance is really the only way of governance? In fact, it is not. The main reason lies in technical problems, because decentralized governance methods similar to multi-head management can hardly solve the problems of fairness, corruption, and evil in the governance process without the technical support of blockchain.

But after the birth of the blockchain, for the first time, humans can let programs execute the set content in a decentralized manner, and can guarantee that they cannot be tampered with. The decentralization and non-tamperability of the blockchain can just solve the problems of previous centralization and bring new solutions. Based on blockchain technology, for the first time in human history, there is a way for participants to achieve a certain goal based on a certain goal, so that participants can collaborate with each other in an anonymous way without mutual trust (Trustless), and work together for a certain goal.

Generally speaking, when new technologies are born, mankind will try to solve old problems with new technologies, or use new technologies to solve new problems, in order to explore more possibilities of new technologies. Therefore, it is logical to use new technologies such as blockchain to solve some of the problems of organizational collaboration or governance since ancient times. Looking at it this way, why does the transformation of a centralized organization and collaboration method into a decentralized DAO appear? The author believes that this is inevitable.

Why is DAO an important development direction in the future?

The sharing economy of the Internet has the embryonic form of DAO

Although DAO has appeared, we still need to pay close attention to its development, because DAO is likely to be an important development direction in the future.

This has to start from the current development trend of society. In fact, there have been many clues to the emergence of DAO a long time ago. With the continuous development of Internet technology, some new business models are being born, and the way to develop a business entity is no longer solely dependent on the company’s own power. We often hear the term “viral transmission”, which is actually using the public’s enthusiasm and interpersonal network to spread and spread marketing information like a virus, and then quickly reach tens of thousands or even more audiences in a short period of time.

Many of the methods used in viral transmission are linking some incentive mechanisms with sharing, allowing users to spontaneously spread for the company, and obtain corresponding returns based on the company’s set benefit distribution mechanism. This is what we often see How much money is rewarded for inviting new users to the Internet App. Some of these gameplays will add a distribution mechanism or a rebate mechanism to it, which enables those with influence or resources to quickly realize their own resources through these mechanisms, thereby promoting the rapid spread of this App , And then achieve a win-win situation for individuals and companies.

This method is already somewhat similar to DAO. It also sets rules and benefits distribution methods, which can drive users who are not employees of the company to quickly empower the company. However, this method will be subject to the company’s operational capabilities, integrity issues, and the company’s profit distribution in the distribution of benefits, etc., but there is already a DAO. If the framework of the corporate system is completely opened, it is no longer a centralized governance, leaving only the rules and operation methods, and it will be like a DAO.

What kind of development will the DAO direction that the venture capital giant a16z is optimistic about ushering in the Polkadot ecology?

Freelancers are becoming the current trend

On the other hand, with the development of the Internet, the links between people have broken through geographical restrictions, and the new exploration of business models has also derived many dematerialized methods of processing the means of production, which means that many people’s abilities only need Collaboration with others and realization of abilities can be realized online. Freelancers are an organization group that develops rapidly under this trend.

According to statistics, there are approximately 1.1 billion freelancers working in the world. Among all organizations (with more than 1,000 employees) in the world, one-fifth includes at least 30% of remote workers. In the past five years, 50% of all organizations have a significant increase in the workforce of freelancers. (Data source:

The openness of thinking is also the reason why freelance has become popular, especially now that the new generation of young people pay more attention to their own feelings in the workplace, they pay more attention to their independence, and they are more willing to cooperate with people with consistent values ​​and freelance. You can also freely control your own time and energy allocation, avoiding some company-related workplace problems.
Affected by the epidemic, tools and working methods such as online office and cloud collaboration are also rapidly spreading. It is more convenient for freelancers to collaborate with others online or complete a project with people who have common interests. Behind some well-known projects is a group of technology developers distributed around the world who reached a consensus online and jointly completed them. They literally operate in a DAO manner and have made successful projects.

DAO is in legalization

In March of this year, at the “Company, Election, and Political Division” meeting of the Wyoming State Assembly, the Senate approved Bill 38 proposed by the first committee hearing. The bill aims to clarify the decentralized autonomous organization DAO The legal status of DAO allows DAO to legally register itself as a limited liability company (Limited Liability Company, LLC).

DAO’s Pandora’s Box has been opened, what kind of surprise it will release, let us wait and see.

DAO has been verified in the blockchain field

As the largest project in the DeFi field, MakerDAO is undoubtedly a superstar in the DAO field. Founded in 2014, MakerDAO is not only a decentralized autonomous organization and smart contract on Ethereum, but also provides the world’s first decentralized stable currency DAI , and in 2019, it occupied the entire DeFi lock-up amount. above 50.

MakerDAO achieved an unprecedented experiment and established a decentralized “central bank” on the blockchain. Its method of creating stablecoins with over-collateralization on the chain provides the currency market with liquidity that can be adjusted according to demand, while eliminating the risk of “printing money out of thin air”, making MakerDAO have enough assets behind each currency. At the same time, because MakerDAO has no counterparty risks and is subject to a sovereign policy, there is no risk of central custody, so that MakerDAO’s stablecoin achieves a beneficial balance of transparency and system risk.

Now that MakerDAO’s TVL has reached $17.6 billion, this application, which has only developed in just a few years, has rapidly grown into a giant, which has exceeded the productivity of most centralized organizations. The success of MakerDAO allows users to deeply feel the charm and advantages of DAO for the first time.

“Everything can be DAO” shouldn’t be a joke

More and more cases are proving that DAO, as a new type of organization and collaboration, has been verified and accepted by more people. So, if the various existing centralized organizations try to explore and improve in the form of DAO, they may all get better results. In this way, “all things can be DAO” may not be a sentence A joke, it should be a forward direction for brave exploration. It requires the brave to use DAO to verify the operation of everything, and I also hope that DAO can run out more classic cases.

DAO in Polkadot ecology

Earlier, we spent a lot of pen and ink to sort out the generation and development of DAO. Now we will bring our attention back to the Polkadot ecology to see what kind of sparks will be generated in the DAO with the support of the Substrate framework and the superposition of cross-chain functions, and What innovations have been born?


SubDAO should be regarded as the first team in the Polkadot ecosystem to announce that it will build a DAO specifically, and it has received a lot of attention, and has been favored by capital since its establishment, including Hypersphere, Huobi Ventures, OKEx Blockdream Ventures, CMS Holdings Dozens of well-known institutions such as Signum Capital, NGC Ventures, etc. have become investors in SubDAO.

So what exactly does SubDAO do, why has it attracted so much attention, and has even received three grant grants from the Web3 Foundation?

What kind of development will the DAO direction that the venture capital giant a16z is optimistic about ushering in the Polkadot ecology?

What is SubDAO?

We can use a simple formula to describe what SubDAO does, that is, SubDAO=DAO platform + social network + cross-chain wallet + electronic signature service.

First of all, we need to make it clear that the most important thing is that SubDAO can be used as a basic DAO tool (DAO platform). This is also something that most DAO organizations lack at present. Therefore, SubDAO will develop a series of tools around the use of DAO for the community to use; Secondly, SubDAO is essentially a social tool. We can understand it as a “Discord” dedicated to serving the DAO organization. This part of the expectation may bring huge surprises.

In reality, there are too many examples of the economic effects that social networks can bring. In the Internet field, new apps have to open WeChat and QQ logins to divert their traffic, and they have to allocate huge profits to Tencent. , This is also one of Tencent’s main revenue methods. In the blockchain field, the success of Axie Infinity is inseparable from the support of the YGG guild, which happens to be the embodiment of the social network.

In addition, SubDAO can also be used as a cross-chain wallet, but unlike other wallets, SubDAO’s wallet is more integrated as a DAO or social tool, more like the WeChat wallet we use. Finally, SubDAO can fit the electronic signature service we use and be used as a smart contract to facilitate the DAO organization to complete certain cooperation requirements.

Therefore, in the face of these avant-garde functions of SubDAO, we have seen some new functions given to the DAO organization. This is also the positioning of SubDAO: to allow any decentralized organization to quickly create and manage DAOs. At the same time, SubDAO plans to become a parachain of Polkadot, and it will grow into a decentralized, highly customized, low development cost and multi-asset support DAO platform service platform.

SubDAO’s innovative economic model

In addition to the advantages of SubDAO products, its economic model is also an interesting attempt. We know that the DAO organization has some financial attributes since the earliest The DAO. This is also the birth of The DAO. It raised more than 12 million Ethereum in the early stage. It can be seen that financial innovation in the form of DAO has also received a lot of favor, and the DAO organization is also inseparable from financial tools. After all, according to the founder of PolyChain, Olaf Carlson-Wee previously stated that the current scale of funds managed by DAO is about 75 billion US dollars. , And still maintain a good growth.

To this end, SubDAO innovatively proposed Governance Mining (governance is wa mine), its benchmark is more like a DeFi tool, through TVL to measure the value of DAO, and guide the DAO organization to use its own funds rationally. Therefore, 27% of Governance Mining is set up in SubDAO’s token economy. This part of the token is mainly used for the DAO organization’s activity and contribution in the ecology as DAO rewards to support the development of the community. Most development paths are driven by “interest”, and SubDAO’s preset incentives are bound to bring new growth points to the development of DAO and DeFi.

What kind of development will the DAO direction that the venture capital giant a16z is optimistic about ushering in the Polkadot ecology?

In the future, SubDAO will also connect more public chains and DeFi to realize DAO’s cross-chain aggregation and cross-chain governance model, and create DAO products with a wider application range for project parties. The addition of Governance Mining will also allow SubDAO to deposit more DeFi funds, which may derive more practical applications of DeFi and improve the utilization and liquidity of funds in the DAO organization.

What will SubDAO bring to Polkadot?

One of Polkadot’s most important functions is a one-click chain, which is mainly implemented based on the Substrate framework behind Polkadot. This framework includes a variety of functional modules required to build a blockchain, allowing developers to build a block chain. In the case of block chain, mature modules can be assembled directly, and one chain can be issued within a day. Polkadot’s parachains are built based on the Substrate framework, and SubDAO provides the basic tools for DAO, which is naturally adapted to other parachains.

As we mentioned above, many projects can use DAO to collaborate. Then, as Polkadot that can link all blockchains, there must be many parachain projects and transfer bridges in the future. When these projects have a demand for DAO , You can directly use the ready-made SubDAO DAO platform. SubDAO is also equivalent to a tool that completes the DAO direction for the Substrate framework. With more and more projects using SubDAO’s DAO platform, SubDAO can be linked to each blockchain at the same time through this tool, and then become the DAO in the Polkadot ecology. center of.

At present, there is still a lack of such a role in the DAO ecological niche in the Polkadot ecology. As for whether SubDAO can achieve this goal, it needs continuous attention.

Dora Factory

Dora Factory originated from DoraHacks, a global geek community and hackathon organizer. It has a highly engaged community at home and abroad, and has a certain user base at the beginning of its creation. Dora Factory is an open and programmable on-chain governance protocol platform based on Substrate, and it is also based on Polkadot’s DAO as a service infrastructure.

Any organization or group that needs on-chain governance can use Dora Factory’s underlying and core on-chain governance modules to provide a new generation of decentralized organizations and developers with secondary voting, curve auctions, Bounty incentives, cross-chain asset management, etc. Pluggable management function. Dora Factory provides a free infrastructure square, which can easily create DAO and meet its needs in governance, fundraising, collaboration, management and other aspects.

Currently, the projects supported by Dora Factory mainly include decentralized media DAOrayaki, Hackathon DAO, anti-sybil attack and large-scale quadratic funding agreement Quadratic Funding V2 and so on.


Opensquare is a Substrate-based platform that provides decentralized collaboration modules for the application layer. There are mainly two development directions of decentralized LinkedIn and collaborative DAO. The user’s collaboration data will be stored and viewed by other organizations under the condition of the blockchain to ensure its security. Opensquare builds a user credit model based on these historical collaboration behaviors. Its vision is to build a credible decentralized collaboration network. .

Opensquare draws on the past experience in the development of the DeCo platform, and based on the characteristics of the Polkadot ecology itself, it has created four different modes of collaborative operation. Created a collaborative production line integrating Bounty collaboration, short-term employment, knowledge payment, and personalized thinking. At the same time, Opensquare has introduced a credit construction system to quantify the credit ratings of participants based on the mutual evaluation of Hunter and Funder and the intelligent evaluation of the platform. A parliamentary system was introduced to make the community more democratic and fair.

Currently, Opensquare’s main applications include treasury browser doTreasury, paid question and answer platform CoinAsk, asset browser statescan, off-chain voting governance platform Off-chain Voting, SubSquare, etc. Among them, SubSquare is similar to Polkassembly, which is a governance platform for the Substrate framework.


In the past, MakerDAO opened up its territory in the DeFi field and became the largest decentralized stablecoin project. Later, YGG relied on the power of the community to help Axie Infinity to create the largest chain game. The potential of DAO has been repeatedly verified by high-quality projects at the level of tens of billions of dollars. Many late-stage talents have also followed the trend and tried to use DAO to manage and develop ecology. Because compared to projects that are well-designed and ignore subsequent development, projects with governance mechanisms will gain more scalability and more possibilities, and will be easier to survive in the fast-evolving, competitive and iterative blockchain industry The winner. Therefore, DAO will be the norm in the blockchain industry.

Today, a16z, which manages a US$3 billion fund, has also begun to lay out the DAO field. This appeal is like a social giant like Facebook changing its name to Meta and announcing its entry into the meta universe, which will allow subsequent capital to more actively deploy DAO.

It can be foreseen that soon, the adoption of DAO will become more frequent, and projects surrounding DAO will also receive more capital under the spotlight. The development of the entire DAO ecosystem will accelerate, and the wave belonging to DAO is coming quietly.

As for Polkadot, multi-chain must be the future. This is also the understanding of Polkadot’s founder Gavin on the development of blockchain in the future. From the development of Polkadot’s ecology, as Gavin expected, there are many parachain projects with different development directions being perfected, and these different projects also have different understandings and different needs for DAO, which will inspire Polkadot The ecology will eventually run out of a leading DAO direction. As for the result, let us leave it to time.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/what-kind-of-development-will-the-dao-direction-that-the-venture-capital-giant-a16z-is-optimistic-about-ushering-in-the-polkadot-ecology/
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