DAO can be said, very DAO

星球君的朋友们

Odaily资深作者

2021-05-18 09:32

This article is about 10018 words, reading the full article takes about 15 minutes

AI Summary

Expand

author:Mia Bao，Founder of Beep Crypto/ Chief partner of WHALE

Thanks to Alex Yung, Summer Zhao for proofreading this article

Table of contents

Table of contents

The past and present of DAO

The organizational form of DAO

Progressive decentralization

NFT's Today's DAO's Tomorrow

first level title

The past and present of DAO

On April 30, 2016, the blockchain company Slock.it launched the first DAO project --- The DAO, which is an early decentralized autonomous organization (DAO) and venture capital fund. At that time, 11,000 people invested 11.5 million ETH, accounting for 14% of the total supply of Ethereum, worth about $150 million. This also made The DAO the largest crowdfunding project at that time, and the degree of FOMO exceeded the imagination of many people, including the project itself.

"The DAO is a paradigm shift in the idea of economic organization. It offers complete transparency, complete shareholder control, unprecedented flexibility and autonomous governance".

However, extreme joy begets sorrow. "The transaction is suspended, we have been attacked." On June 17, 2016, hackers used the two vulnerabilities of The DAO "recursive call" and "call transfer to avoid destruction" to carry out more than 200 attacks and stole a total of 3.6 million of Ethereum, more than a third of the total amount of Ethereum raised by the project.

However, hackers could not directly cash out. According to the terms of the smart contract at the time, these funds would be put on hold for 28 days, which gave The DAO and the Ethereum community nearly a month to consider how to deal with them. Later, as everyone knows, the Ethereum community conducted a hard fork and divided into ETC and ETH to save this loss. The Ethereum core team cannot force the community to transfer, but people voted with their feet, answering the question: Does the benefit of eliminating hackers outweigh the cost of human intervention in trusting Ethereum? For most people, it does.

Had it not been for the fork, the ether (ETH) hackers stole from The DAO on June 17, 2016 would be worth $6.6 billion today.

Today, five years later, the discussion of DAOs is back, and DAOs already have a range of use cases. I can see that some very smart friends around me are already discussing DAO. The current state of DAO is a bit like NFT in early 2020.

first level title

What are DAOs?

Kevin Kelly described the behavior of bee colonies in "Out of Control": When a group of bees wants to move, the queen bee does not directly make a decision, but a group of bees go to scout. After returning, the scout bees dance to the bee colony to express the result. The more exaggerated the dance, the better. After the bee colony sees it, it will let other bees follow to check. If I feel good too, I will come back and dance together. "Through this repetition, places that people like attract more visitors, which leads to more visitors coming in."

In the end, the largest bee colony wins, and the queen bee moves with it. In this process, the queen bee did nothing, just followed the largest bee colony, no bees made the "final decision", but almost all bees participated in the decision.This is the hive mind,

"The magic of the 'hive mind' is that no single bee controls it, but an invisible hand, one that emerges from a multitude of dull members, controls the whole colony."

This is the native DAO.

DAO puts decision-making power in the hands of stakeholders, not executives or board members"decentralized"；"decentralized"autonomy

It is through smart contracts that users run applications on publicly accessible blockchains, and if certain conditions are met, relevant actions and results will be automatically triggered.

This is a change and update in the "organizational form".

Defi: Money Legos

NFT: Media Legos

I like Jesse Walden's previous summary of Defi and NFT:I think DAO may be the upper layer of NFT. DAO can own NFT and create NFT, and it can also accommodate many non-NFT things.If NFT is "Media legos", then DAO is likely to be "Corporate legos"

", which coincides with Santi's point of view."

Like creator fandoms today, each 'company' or project will become more like a tribe, driven and defined by the stories and symbols that tie its members together, and by those who best weave its narrative people lead.Although DAO is a process of "decentralization", there must be no "center of power". The criticism that criticizes a project or organization is ultimately controlled by a small group of people is not a defect of DAO. Any organization that wants to carry out its decisions and tasks in an orderly manner must have someone make a decision, whether it is early or late, whether it is tangible or intangible, whether it is a group or an individual. and

What DAO needs to solve is the "decentralization" and "mobility" of power. The former empowers project participants to have a say in the project, and the latter ensures the constant change of leaders who are decisive factors.In the previous article "Post-NFT eraIf Social Money preaches more about the process of "Monertization" of personal influence, then DAO is a grand proposition about how many things we can accomplish together.

first level title

As of early May, the total assets managed by the DAO ecosystem (according to DeepDAO data) has exceeded 1 billion US dollars, and this data does not include those encryption protocols that do not operate in the form of DAO or use independent DAO structures. "The total assets managed by the DAO ecosystem" is similar to the "assets managed by the company" in the market economy, except that most of the assets in the market economy are managed by companies, so it is not convenient for us to directly compare the scale, but As a new type of organizational governance model, the scale of "US$1 billion" is enough to become a symbol of the development of the DAO's own ecosystem.

image description

Ranking of total assets managed by DAO

Olaf Carlson-Wee, CEO and founder of Polychain Capital, said earlier: "DAO is the future of venture capital, and DAO is about to become the second major breakthrough in the blockchain field after digital cash."

Of course, the DAO division here may be too "narrow". Not all DAO ecosystems are related to "managed assets". The organizational form of DAO also includes "infrastructure", "asset management DAO", "governance DAO", and "aggregator". , "Yield DAO", "Guild", "Creator&Media DAO", "DAO Adaptor" eight categories are elaborated respectively.

At the infrastructure level, DAO has gradually become an important part of the Web3 infrastructure. The continuous development of various DAO protocols such as Aragon, DAOstack, and Moloch has provided great convenience for organizations that want to initiate, govern, and manage DAOs. For example, Aragon provides one-stop tools and services, turning communities and businesses into an economy and releasing a long-tail DAO organizational form. Compared to Aragon's complexity, Moloch is built with a "brutal minimalism" design concept, with the aim of creating a "minimum viable DAO" that allows people to actively participate in a common goal while allocating shared resources. Minimize the attack of bad factors.

At the asset management level, it is occupying a large share of the current DAO market, namely Venture DAO, which refers to "investment-oriented" DAO organizations, such as Metacartel, The LAO, etc., but there are also investment organizations that issue "Grants" Such as Moloch, Marketing DAO, etc.

Venture DAO differs from traditional funds in that institutions and high-net-worth individuals (limited partners or LPs) invest funds in funds, and others (general partners or GPs) invest funds in companies. Investors in DAO will be able to Proposals are voted on according to pre-set rules. Everyone's vote is weighted by the number of tokens they hold, which is based on their investment amount. If a proposed project gets enough votes, the smart contract will automatically trigger The DAO's funds to be invested in the project's ETH wallet. Of course, this is an idealized Venture DAO form. Many DAOs are still in the "progressive decentralization" status (see next chapter for details).

It is worth mentioning that Venture DAO is currently performing well in the NFT track. WHALE, FlamingoDAO, PleasrDAO, Jenny Metaverse DAO, etc. listed in the figure below are all DAO organizations that focus on investing in NFT assets. On April 19th, PleasrDAO defeated its competitors with 2,224 ETH and successfully won Snowden's first NFT work "Stay Free". Repeatedly stated that the one-stop concept of WHALE is "WhaleShark out, DAO up!" All this seems to be gradually verifying Matt Huang's sentence "The next Berkshire Hathaway will begin as a DAO."

Governance-type DAO is an extremely important component in addition to investment-type DAO. As mentioned above, DAO is a process of organizational "decentralization". Users determine the voting weight through the proportion of assets held. Voting weight directly affects the direction of decision-making (decisions about DAO will be discussed in the next chapter "Reliability Weighting and Ultimate Transparency Imagination"), and this decision is made by people such as Snapshot, Tally, Gnosis SAFE, etc. Governance tools are implemented. Of course, a project may have multiple attributes and labels. For example, Aragon is also a governance tool in addition to infrastructure. DAOs in the "aggregator" category also tend to feature voting governance.

As for the following organizational forms, Yield DAO is a category that collects assets to earn DeFi income collaboratively. Barn DAO, PieDAO, BadgerDAO, etc. have also been at the forefront of DAO asset accumulation categories.

Guild DAO is like a kind of guild governance, such as Yield Guild Games (YGG), which is a game guild where players from all over the world can gather together through the guild to earn game revenue through the earning-while-playing mechanism of various games. In traditional blockchain games, especially NFT games, users often need to hold NFT assets before they can enter the game, while guild organizations like YGG can help users avoid the process of purchasing assets and separate the ownership and use rights of assets To achieve a win-win situation for all parties. Raid Guild and Rabbithole are similar to "task crowdsourcing" organizations. The former provides services such as "consulting", "public relations", "design", and "development" by gathering blockchain professionals, while the latter is for C-side , users can earn income by playing tasks such as dapp. Metafactory is a business-oriented DAO, focusing on the incubation platform for digital & physical fashion brands.

Creator DAO and Media DAO are newly-born DAO organizations. Passion Economy and Creator Economy have gradually emerged since millennials became the main force in society. From the perspective of capital, there is also a trend from VC to Community Capital and then to Solo Capital. These are actually the results of the fermentation of "personal influence". And a new creator community like Mirrior minimizes modules but maximizes personal influence, radiating from personal influence to NFT (commodities), or to Crowdfund (fundraising), I think this is also a very avant-garde exploration.

first level title

Progressive decentralization

Progressive decentralizationWhen the author studies NFT, DAO, Social Token, Passion Economy, Creator Economy, I often watch the views of NotBoring Packy McCormick and Variant Fund Jesse Walden. When I first read Packy's article, my best friend and I said "Shit, he is literally reading my mind...", no exaggeration, he is a treasure I want to hide and enjoy Lord, and Jesse's article will give me more divergent inspiration (both are highly recommended). "Progressive decentralization" is a concept proposed by Jesse Walden, who believes: "。”

Crypto companies don't have to, and generally shouldn't, be a DAO from day one, they can evolve

If you stick too tightly to the original form of things, you often cannot really understand the essence of things. The "definition" of both packaging and classification serves to "better explain the product itself", rather than to limit the "product itself". The same is true for DAOs.

The key to the transition from centralization to decentralization is whether the innovation will help the product itself, and whether the current stage of the product is suitable for this innovation? If the answer to both is yes, it is necessary to implement it. On the way to start a business, we constantly test and communicate with users through demos to form a good feedback closed loop, so that we can continuously improve the product itself. A good product requires testing and feedback, rather than the founder watching "Out of Control" at home and predicting the strategy for the next 50 years The big picture, and then talk on paper. A good product must be closely connected with its environment and evolve together."Then how to gradually complete a decentralized governance framework, so that"Build a sustainable, compliant and community-owned product？

Woolen cloth

Walden gave us three steps, I think it is necessary for everyone to discuss together:

1. Product-market fitThe early days of a cryptocurrency startup should look like the early days of any startup: a small but lean team focused all their energy on building, learning, and iterating until they find product-market fit. If the product sucks, it will eventually break away from the community.。

Web3 start-ups are actually extremely advantageous here, by integrating existing smart contracts, code and products into new contracts to quickly build and test, and can complete an extremely fast trial and error process. The reason why DeFi is called "Money Legos" is that whenever someone builds something new, it can directly become a module that can be used by others. The birth of magic is not only to create Lego, but also to reconstruct the combination mode of Lego

Aavegotchi is one of the most DAO-oriented teams among the teams I have come into contact with. From proposals, to voting, to the social network graph mapping of social media such as discord/twitter to the contribution weight value of the project, they are practicing DAO without exception. . But it can't escape the process of "progressive DAO": the team decides the tone in the early stage, while the major decisions in the later stage are all decided by the community. I deeply remember that after the first release of the portal, everyone voted for the release of the second portal. After Snapshot was voted to delay, even the team was surprised that "before the first phase of rarity mining, there was no second phase of the portal "The final result, but shouldn't the birth of a good product be determined by the "market"?

2. Community Engagement

Once a company has achieved product-market fit, it should start trying to engage more stakeholders more directly. Walden likens it to "open source development," inviting the community to participate, offering bounties, grants, and other incentives, developing in an open environment, building a community, and reaching initial consensus on decisions.

At this point, the domestic team I admire the most is Conflux. Although they have not transitioned to complete decentralization, they have already done a very systematic job in the "original task crowdsourcing". Their Bounty plan recruits insightful people from the open community according to the dimensions of "technology", "brand", "community", "resources" and "others". Each task is clearly listed, and relevant personnel can directly go to Claim, so that more stakeholders can participate in the ecological construction.

The voxel creator community of The Sandbox is also a "native DAO". Artists will form several groups according to corresponding themes every period of time. Each group will be divided into corresponding group leaders according to the weight of previous works, and the group leaders will guide the members. And to ensure the steady progress of the creative process, everything has rules, but the rights are "flowing".

The above example is actually consistent with the Guild classification in the classification of DAO at the beginning of our article. However, due to the gradual process of DAO, the projects are still running in a "quasi-original" manner, and if the later stage transitions to full DAO governance, the scalability will be improved. is exponential growth.

3. Full decentralization

After completing the first two steps, what follows is "complete DAO decisions and execute them automatically". After dismantling, we should pay attention to, one is voting power, and the other is automatic execution. Voting Power is currently mostly determined by the number of tokens held, but many people in this part criticize the core team or big players may influence decisions based on their status in the community or the number of tokens they hold. For this issue and solutions, which we will discuss in detail in the next chapter. Automatic execution is to mint and distribute tokens by triggering the preset rules of the smart contract. These rules determine who gets how much from today and how tokens will be distributed in the future.

A loyal community coupled with effective governance will effectively promote a perfect fit between the product and the market, and this may also be the most effective way to complete DAO innovation.

first level title

Reliability Weighting and Ultimate TransparencyThere is a problem left in the previous chapter: "Most DAO governance at present determines the Voting Power by the number of tokens held", but this is easy to fall into the ills of centralized control by large households or a small number of people .

Some people call the decision-making method of "same votes, same rights" "single-cell democracy", which is a pseudo-democracy. The pursuit of absolute democracy for individuals is not necessarily the optimal solution for decision-making. How to ensure the balance between democracy and dictatorship and maintain What about the average Nash equilibrium of the strategy?

"My goal is to do meaningful work and build meaningful relationships with the people I work with. I know that only extreme transparency and algorithmic decision-making can help me achieve this goal." ---Ray Dalio

Believability-weighted and radical transparency come from Bridgewater’s decision-making model. Although Dalio is not a big fan of bitcion, Bridgewater’s corporate decision-making model is surprisingly DAO-like.In the DAO decision-making, the objection I heard most is, "a group of people cannot make decisions",？

Are there any "dimensions" that can be used for weighting besides the "stake" that tokens represent? Or does it mean that a large number of people is absolutely correct? Does the big household/whale represent absolute correctness? The answer is obviously no, can it be improved according to the idea of "reliability weighting"?

Reliability weighting, in simple terms, means that if you are reliable, then your opinions will have more weight; if you are unreliable, then the weight will be weaker. This principle seems simple, but it is not easy to implement, which is why Bridgewater's governance is often called "cult culture".

All comments, such as the rater's ID, score, and additional postscript comments, will be permanently saved. Each comment is called a dot, and a person may be full of dots. For example, the co-CIO of Bridgewater has more than 11,000 points. The various dimensions are finally integrated into your "believability". In the decision-making process, we can weight by reliability.

image description

“(The color portrait of each person according to the weight of reliability)”

Idea merit = extreme truth-seeking + extreme transparency + credibility-weighted decision-making.

Back to our DAO governance, let’s take Venture DAO as an example. The simplest way to "reliability weighting" is to track each investment decision of an investor to form his "investment reliability", so that in the next investment Different weights will be formed in (if this part is to be derived, it will be extended to the discussion of the DID part).。

This is the "idea meritocracy" advocated by Bridgewater, which pursues "radical transparency" through a believability-weighted approach to achieve the best decision-making

The process from an enterprise to a DAO organization is a continuous process from the closed to the open in the above dimensions。

first level title

NFT's Today's DAO's Tomorrow

Like NFTs, the DAO's early experiments today may represent only a fraction of its future potential. With the emergence of more DAO tools, it is becoming easier to try to innovate, and DAO Legos is constantly being filled, not only in the application layer, but also in terms of supervision. DAO has also made great progress.

In April of this year, the U.S. Wyoming state legislature enacted the Vermont Bill For blockchain legislation, passing the DAOs’ legality proposal, which will allow DAOs to be established as limited liability companies. For DAOs, this could be a huge step forward. The bill will allow DAOs to operate, proxy assets, and manage their affairs on the chain, which will undoubtedly pave the way for DAO scalability.

"The next big thing will start out looking like a toy", I believe that today's NFT will be the tomorrow of DAO.

References:

https://bitcoinmagazine.com/technical/bootstrapping-a-decentralized-autonomous-corporation-part-i-1379644274

https://letstalkbitcoin.com/is-bitcoin-overpaying-for-false-security#.UjtiUt9xy0w

https://variant.fund/the-ownership-economy-the-next-frontier-for-community-driven-software/

https://linda.mirror.xyz/Vh8K4leCGEO06_qSGx-vS5lvgUqhqkCz9ut81WwCP2o

https://blog.csdn.net/qq_35624642/article/details/78138081

https://variant.fund/leadership-in-the-ownership-economy/

https://onlinelibrary.wiley.com/doi/full/10.1111/j.1468-0335.1937.tb00002.x

https://messari.io/article/q1-2021-web3-review-nfts-metaverses-and-daos

https://cointelegraph.com/ethereum-for-beginners/what-is-dao

https://www.nasdaq.com/articles/the-pursuit-for-legislative-legitimacy%3A-crypto-corporations-and-wyomings-blockchain-bill