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Motivation - the most addictive way

If you have ever been to an arcade, you must have seen this kind of game machine called a "coin pusher".

Throw in a few game coins, see how little they add up, wait for a certain critical point, 80% of the coins in the machine will fall with one push, and all of them will become pockets.

This seemingly simple game machine is actually set up with an addictive incentive method - "to make a big difference with a small amount" amidst uncertainties, and get multiplied rewards for a small investment. The only annoying thing is that you can't be sure which Only one time will win the lottery.

And similar incentives are ubiquitous in the world of DeFi.

In Axie Infinity, you only need to buy 3 Axies pets at a low price, you can form a team to participate in the battle game, win SLP token rewards to "Breeding" to breed more Axies pets, and then sell the remaining Axies in the market to get more rewards.

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Image credit: Twitter: @jx_blook

The logic of this business model forms a perfect closed loop. It is like a game machine that continuously brings fun and can really make money. It can earn tens of dollars in a few hours. People are addicted.

Of course, game incentives like Axie Infinity must be as simple as possible, and the steps as clear as possible, so as to attract more players to receive timely feedback and spend longer in the game.

Coming to the NFT world, the new star Loot also "became popular overnight" through the simplest incentives, and its formation process is equally simple and surprising.

You don't need to have any artistic or aesthetic skills, just go to Github and write a few lines of code, a pure black background white text NFT will be born on the chain with your instructions, anyone can cast on this basis A Loot NFT virtual character with specific equipment and appearance.

Such a simple blockchain-native NFT, even Ethereum founder Vitalik also praised its philosophy, which seems to imply that Loot is the Ethereum in the NFT world, because it allows all community members to build from the bottom up. "Anything created by anyone has 'existence,' what matters is the extent to which other people can create on top of it," he said.

The managing partner of Multicoin Capital, a cryptocurrency venture capital institution, is very optimistic about Loot, saying that he has purchased Loot worth tens of millions of dollars. He believes that Loot is a new type of social coordination and capital formation mechanism, and this new type of social coordination mechanism is DAO (Decentralized Autonomous Organization). In the future, Loot may also be able to interact with blockchain games such as Decentraland and Axie Infinity.Different immediate incentives constantly catalyze their original motivation in the process. If the community can consistently run projects like this, they will be followed by DAOs fully in the hands of the community.

DAO Incentives and Improvements

textHiring workers can efficiently "move bricks" without a company. Do you know DAO?）。

Hiring workers can efficiently "move bricks" without a company. Do you know DAO?

Why are DAOs believed to have a chance to replace traditional companies?

Because in a decentralized organization, incentives and feedback are very direct: everyone participates in governance and operations in a flat manner, formulates the rules of the game by themselves, and ultimately benefits are directly linked to themselves. It skips the step of being extracted most of the profits by the middle platform of traditional companies, and it also abandons the strict hierarchy.

And from the perspective of serving users, DAO and the company have the same role, but the path is different. The purpose of traditional companies is to serve specific users, and the purpose of communities is to serve every member of the community.

For example, Coca-Cola will develop beverages with different flavors for people with different tastes. The word "company" is just a concept. Compared with "company", it is more accurate to describe the way of organizing business activities, and the products of the cooperation between these organizations are beverages with different tastes.

Also in the community, we gather together because of common interests, have stronger or weaker ties, and form a "user group". WeChat group is a community, Glory of Kings is a community, Weibo is a community... It's just that this kind of organization is spontaneous and loose, and lacks economic incentives.

After introducing the incentive method of cryptocurrency, DAO can also operate a business model. Through voting governance, the most common coordination method, the subsequent development of the organization is determined by the number of tokens held or the amount of work contributed to the community. .Subsequently, the design of DAO also produced a key problem:

If tokens are used as incentives to drive development, how to ensure fairness and effectiveness of incentives?

For example, bribing large currency holders, indifference of small currency holders, and excessive concern about token price increases, etc., are all potential problems in the voting process. How to optimize and avoid these ills left over from the process of political elections?

Vitalik published his latest article on DAO "What are the problems with decentralized governance?" How to improve? ", provides 4 kinds of solutions, a brief summary can be divided into:

1. Limited governance: Token-driven governance is limited, that is, holding tokens can only affect a small part of decision-making.

2. Non-token-driven governance scheme: Use Proof of Participation (POAP) to prove governance capabilities, thereby increasing the weight in decision-making.

4. Hybrid solution: governance with experts, voting with "reputation", voting without direct enforcement...

Visual graph of DAO voting delegation data, each node is a voter, entrusting its voting rights to more trusted people Image source: GitcoinDAO

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All of the above solutions are aimed at coordinating work, promoting fairness and effectiveness of results, and maximizing the current and future rights and interests of participants.

Of course, all current DAOs are very primitive. In the report "In-depth Analysis of DAO Organizations" recently released by Bankless, the survey shows that as of August 2021, tens of thousands of people around the world are now working for DAOs, and The vast majority live in China and the United States.

WOO Network is also committed to decentralizing its products and services, so that everyone can enjoy more rights and interests brought about by technological progress. In the future, it will develop more token governance scenarios for ecological and community Grants members, and use collective wisdom to influence The development direction of DeFi products.