AllianceDAO: A Guide to Web3 Entrepreneurship in 2023
Original Author: Qiao Wang
In the dance between black swans and deep bears, 2022 is coming to an end and 2023 is ushering in.
In the new year, what kind of ups and downs and unexpected events will happen in the WEB3 world is exciting. For entrepreneurs and developers, perhaps the most important thing is: In 2023, which WEB3 entrepreneurial fields and directions are worthy of attention and construction?
This article covers some of the Crypto/Web3 entrepreneurial directions and topics that AllianceDAO, the largest acceleration DAO in the WEB3 field, is interested in. If you are researching these directions, you are encouraged to apply to join the community and receive funding (https://alliance.xyz/apply). If you are not sure what to build, the content in this article may inspire you.
Table of contents
Table of contents
Decentralized infrastructure
game
game
consumer-facing applications
Proof of Physical Work (PoPW)
zero-knowledge proof
AppChain (as Rollup or Cosmos Zone)
Decentralization for scientific research (DeSci)
DeFi
Crypto B2B
AI and Web3 intersection direction
Define the verticalization of category products
DAO as a Risk Sharing Tool
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Decentralize every layer in the tech stack
In recent years, Web3 seems to have lost interest in true decentralization, and memes such as "users don't care about decentralization" are everywhere, and true decentralization is the first quality that makes Web3 interesting.
Decentralization only matters when it actually happens. With the recent collapse of centralized crypto institutions, and broader financial and social scrutiny around the world, decentralization is more important than ever.
An application is only as decentralized as its technically most centralized layer. So for applications that require decentralization, the entire technology stack needs to be decentralized.
The layers of the technology stack include:
DNS (e.g. HandShake, Decentralized Domain Name Protocol)
general computing layer
Data storage (e.g. Filecoin)
Data indexing (e.g. Graph, decentralized data indexing protocol)
Oracles (e.g. Chainlink)
Cross-chain bridge
Node infrastructure
wallet
wallet
ISPs (such as Helium)
CDN
version control
It appears that many layers in the tech stack already have dominant decentralized players. However, most existing players are at best at the proof-of-concept prototype stage. Even if there are already commercial projects among them, they can become their legitimate competitors after weighing various factors. Solana is an example.
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Decentralized Postgres
There is currently no way to write a nice Web3 client application as easily as in Web2. In Web2, you can spin up a database on an AWS instance, and have your client applications call the database to read and write. But in Web3, there is no such thing.
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L2 as a Service for specific applications
Projects such as Axie, Bored Apes, and dYdX have launched or are considering launching their own Lisks. Doing so sacrifices shared security, atomic composability, and the ability to rapidly prototype for customizability, sovereignty, value accumulation, and gas fee predictability. This application chain solution is actually an application-specific L2.
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Oracle for static Web2 information
Currently, oracle machines in Web3 are mainly used to pull high-frequency information such as prices from centralized exchanges. This enables applications such as lending and derivatives.
We also need oracles with relatively static information from:
Web2 social platform
Game platforms such as Steam
KYC provider
credit rating agency
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Semi-custodial wallet
Wallet infrastructure remains the biggest bottleneck to mass adoption of Web3.
By design, centralized hosted wallets sacrifice flexibility for convenience. It's not possible to use something like a Coinbase custodial wallet for anything other than transactions and transfers. We need decentralized self-custodial wallets for unrestricted access to dapps.
The wallets we would like to see are "semi-custodial":
The user keeps one part of the key, and the company keeps the other part. Both require signing transactions via multi-party computation (MPC). If only one party is compromised, the funds are still safe because no one has the full key at any time.
If a user loses their key, MPC also allows key recovery using a third shard of the key stored on an independent key management system (such as AWS KSM).
Ideally, the wallet should provide a WeChat-like "super app" experience with direct access to various other apps.
Finally, a wallet should have some or all of the following properties:
Support local legal currency deposit and withdrawal;
Easy integration for dapp developers;
Multi-chain support;
Batch transactions (sign once to execute multiple on-chain transactions);
Warn users before signing transactions that look suspicious.
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Uncensorable Github
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Vercel/Firebase for Web3
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Cosmos/Solana Developer Tools
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Smart contract "navigator"
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Fully on-chain gaming
On-chain games are games that write the entire game state and game logic (not just in-game assets like currency and NFTs) to the blockchain.
Think of the game of tic-tac-toe. Concepts such as turns, 3 x 3 boards, players and order of play must be unalterably recorded as rules. The history of player movements must also be recorded on-chain.
On the other hand, the color of the board and pieces, the shape of pieces (such as X and O can become Y and Z), animations, sounds, etc. can all stay on the client side.
Putting all state and logic on-chain unlocks all sorts of novel behaviors:
Smart contract-based players (as opposed to human players) play according to intelligent and ever-improving rules.Think about composability between games and players. One of the earliest instances is actually MEV in DeFi. MEV bots are smart contract-based players, and MEV is a game. Note that in this case, smart contract-based players compete not only with each other, but also with human players.
Smart contract-based player trustless collaboration.Consider composability between players. Suppose there is a game called Dark Forest. At launch, it was a multiplayer game with only informal alliances. Because in order to work together, you need to trust that other players won't betray you. However, at this point someone built a smart contract to act as a competitor. The contract allows players to donate points to it without permission and eventually rank high enough to win prizes. It keeps track of the data, and when it wins, those players are able to share the winnings proportionally.
Game Mods built by third-party developers do not need to worry about being blocked by the platform.secondary title
Game Engine
While most of the game engines currently being built in this space are looking to add web3 capabilities to most Web2 games, we're actually excited about the tools for creating fully on-chain games. What if we could create an interaction or physical standard for on-chain games? Imagine that the game rules of Dungeons and Dragons are also on the chain, and anyone can reuse and remake these rules.
If history is any indication, the first successful on-chain game engine is likely to come from a successful on-chain game studio. Think Unreal (the engine) and Epic Games (the studio).
For the same reason, the first successful Web3 game publisher may also come from a successful Web3 game studio. Think Steam (the publisher) and Valve (the studio).
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Web3 Twitter that doesn't want to be Web3 Twitter
The "Web3 Twitter" that won the competition will finally provide the features we have been longing to see: data truly owned by users themselves, not controlled by one entity or even one person, multiple clients can be built without permission, users can choose multiple A curation algorithm to customize what it sees.
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Web3 WeChat
A messaging app should be:
privacy protection:Strong end-to-end encryption.
User owns:Encrypted data like IPFS, controlled only by the user's own keys.
Not censorable:Users cannot be banned by roles like Meta or Government.
Portable:Ability to build multiple independent clients.
Native commercialization:Support native encryption payment.
Web3 Whatsapp should gradually be decentralized. A first step might be to use decentralized storage alongside centralized computing. In the future, migrate to a decentralized computing model when the product is ready.
Intuitively, "messaging app" is less complex to build and market than "social".
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Habit Formation Apps
The case of StepN shows that token incentives can be effective in encouraging people to adopt healthy habits. This might include activities like running, sleeping, meditating, eating healthy, or learning new things. Some studies show that it can take a person anywhere from 18 to 254 days to form a new habit, with an average of about 66 days. Overcoming this initial hurdle may be difficult for many, but using economic incentives through tokens may provide the motivation people need to stick with their new habits and make them a permanent part of their lives.
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fan participation
NFTs create a new way for creators of all kinds to monetize their personal brands. We are interested in startups building fan engagement platforms across a range of industries (musicians, athletes, writers, video creators, etc.) and geographic regions. We are also interested in supporting the individual brands themselves.
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NFT as digitally native intellectual property
Consider intellectual property as an asset class. To put in perspective the importance of this asset class, the total value of intangible assets has increased from approximately 1/5 to 4/5 of the S&P 500 market cap over the past 5 years.
An NFT representing a single IP can help unlock liquidity for various assets such as:
music, video, writing and art;
know-how and scientific discoveries;
brand.
Then, the idea is to have a primary and secondary market focused on a particular type of asset.
Several such NFT markets do exist today, but the real potential of NFTs lies not in their speculative nature, but in their ability to create derivative works. This will make them productive assets, not just trade items.
One way to achieve this is to use the traditional legal system to attach intellectual property to specific NFTs, effectively tokenizing the IP.
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5. Proof of Physical Work (PoPW)
Tokens may be more effective at coordinating large-scale human activity than the most capable centralized entities such as governments and large corporations. Check out our related research below.
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health data sharing
One of the major challenges facing public health researchers is the lack of sufficient data sets to test their hypotheses. One possible solution to this problem is to contribute personal health data in a decentralized form for research and drug development.
For example, individuals could share their DNA data and related health information, creating a decentralized version of 23andMe, where participants would be rewarded for their contributions. Universities, hospitals, and pharmaceutical companies can access this data through the market for research and commercial applications.
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AI dataset creation
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Regenerative Finance (ReFi)
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Decentralized Energy Network
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Use encrypted network to carry talent market
The Web2 job market is diverse, but hourly and contract workers in particular have the following issues:
As the market's bargaining power over users increases, the market tends to charge more for talent.
Users lack the ability to transfer their reputation across different marketplaces.
International transactions using fiat currency payment systems have limitations.
The requirement for personally identifiable information (PII) in the onboarding process prevents many talents around the world from participating.
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Decentralized VoIP International Calls
Voice over IP (VoIP) technology has dramatically reduced the cost of international calls by routing them over the Internet. Decentralization can further reduce the cost of these calls by another order of magnitude.
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Oracles for PoPW Network
In the PoPW network, the off-chain contributions of network participants must be proven on-chain in order to be rewarded with native tokens. This is known as the "Oracle Problem" and is one of the biggest challenges PoPW networks face. Malicious actors may attempt to manipulate oracles to extract maximum value from the network. Some examples of malicious behavior in the Helium network: Since the network rewards participants based on the geographical coverage of their hotspots, users have an incentive to fake hotspots or locations. Despite Helium's efforts to combat these practices, such as using deny lists and a hotspot challenge system, proving the real existence of Helium hotspots and locating actual locations remains a challenge.
Other PoPW platforms, such as Hivemapper, attempt to prevent oracle manipulation by using hardware authentication.
Hivemapper dash cams use GPS positioning and connections to Helium hotspots as part of their proof-of-location protocol, and they also employ human labor to verify the authenticity of submitted images. While this approach may work, it also adds complexity and opens the door to potential collusion between contributors and reviewers.
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6. Zero-knowledge proof
For more information, view our research below.
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Zero-knowledge proof advanced development framework
Similar to Tensorflow and PyTorch in AI, an advanced zero-knowledge proof (abbreviated ZKP, the same below) development framework is critical to unlocking innovation at the application level. These frameworks require:
Abstracts away the complexity of the underlying ZKP backend;
Support for various ZKP backends and hardware environments, such as CPU and GPU;
Allows for efficient debugging and testing;
Provides a rich development environment with examples and tutorials.
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Zk cross-chain bridge
Existing cross-chain bridges rely on strong trust assumptions and are relatively expensive. zk-bridges can not only provide strong trustless guarantees, but also significantly reduce the cost of on-chain verification. This is similar to how zk-rollups are verified on the underlying L1. However, the complexity of cross-chain message passing is higher, because the signature scheme and the cryptographic function to be verified may be different between the source chain and the target chain. Check out the technical details below.
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Zk-rollup SDK
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ZKP Hardware Accelerator
Specialty hardware companies that target specific use cases and build early market leadership can end up being extremely valuable companies.
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Decentralized Intelligence Organization
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Zk on-chain game engine
Incompleteness of information is a key component of some of the best games humans have created, such as poker and StarCraft. (To illustrate, examples of information-complete games include chess and Go.)
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Zk DeFi
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personal data market
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7. AppChain (as Rollup or Cosmos Zone)
For more information, view our research below.
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High performance DeFi protocol
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Application chain game engine
One of the limitations of the lack of mass adoption of Lisk in performance-constrained applications, such as games, is limited options. StarkEx is a popular choice for this. We want to see startups build new efficient architectures to support 100K+ TPS for on-chain games.
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L2 as a Service for specific applications
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Enable cross-chain secure sharing
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Research Fund
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Decentralized 23 andMe
Another obstacle to scientific progress is a lack of data. Humans, for example, have tens to hundreds of thousands of interdependent genes. To be able to gain deep insights from genetic data, more data points may be required (otherwise the dataset is too sparse). The idea then is to use token incentives to create a crowdsourced, massive genetic dataset.
Also, with centralized companies like 23 andMe, the main concern is privacy. ZKPs can fulfill their potential here.
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Tokenized Carbon Offset Market (Carbon Offset)
Despite blockchain’s promise of greater transparency and liquidity, the tokenization of real-world assets has historically had little success. One possible reason is that for the vast majority of real-world assets, there already exists a legacy market that, while clunky, is "good enough" and well-entrenched. For example, if the existing MLS* works well, what's the point of tokenizing real estate into NFTs?
Carbon offsetting may be an exception, as it is a relatively new asset class. No entrenched legacy market is indestructible. Building web3 infrastructure to enable carbon offsetting on-chain is likely to be the first real success story of real-world asset tokenization.
MLS stands for Multiple Listing Service,Provides a single central platform for listing listings while regulating and standardizing realtors' mutual partnerships and commissions.
carbon offset,first level title
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Market-Driven Lending Protocol
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Cross-chain bridge aggregator
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prediction market
Especially sports betting. Web2 gaming platforms are also plagued by the following problems:
Users do not really own their assets;
Users are censored by the platform;
Platforms cheat at the expense of users.
*Delta One Derivatives and Options DEX
After the collapse of FTX, this category is more attractive than ever. The transaction volume of decentralized derivative protocols is currently only a fraction of that of their centralized counterparts.
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Decentralized stable currency
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Loans collateralized by on-chain revenue
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Privacy DeFi
A DeFi platform that allows users to transact with some or all of the following information confidential:
Sender and recipient addresses;
asset transactions;
Amount of the transaction.
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auction market
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Bitcoin DeFi protocol
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Access DeFi's Institutional-Grade Platform
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Block verification right market
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Data on the chain
There are still many unresolved issues in the on-chain data space. The key is to identify a sufficiently narrow beachhead that is experiencing real pain points. Dimensions to consider include:
For which target user group (eg, analysts, product/growth, engineers)?
For which data set (for example, NFT data)?
Centralized or decentralized?
Historical data vs. real-time data?
which chain?
API or no code?
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Payment via Crypto channels
Interest in crypto payments among crypto-savvy users is slowly growing. These users include:
Encrypted businesses are more inclined to pay in encrypted form, and employees of companies conducting encrypted business also tend to be paid in encrypted form. Consumers in emerging economies regard cryptocurrency as anti-inflation and anti-censorship wealth means of storage, and contract workers who are unable to receive cross-border payments and participate in the global economy due to status restrictions.
But today, people can already pay each other in USDC or other stablecoins if they choose. Where are the entrepreneurial opportunities and what pain points need to be solved?
Accounting and taxes associated with these payments.
Set up triggers for these payments, such as creating the right moment, or some specific scenario.
Licensing and other related matters.
There are several reasons why people might choose to use cryptocurrencies as a payment method: fees, speed, pseudonymity, settlement assurance, and programmability.
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productivity tools
Any individual or organization using mainstream tools like Notion or Github knows this is an existential risk for them. With so much mission-critical information and workflow ultimately under the control of one company, it is vulnerable to scrutiny or privacy violations by the company itself or the government.
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Bringing in Web2 companies and legacy brands
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Token-incentivized data creation
Please refer to the previoussecondary title。
AI players in on-chain games
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Smart Contract Navigator
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Smart Contract Audit/Monitoring
We do not expect LLM (Large Language Model) or similar smart contract auditing tools to completely replace human auditors. However, they can help spot common errors faster and more accurately than human auditors, allowing the latter to focus on complex and rare errors. This could potentially save developers a lot of money.
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Squarespace for Web3
Another potential use case of LLM in the crypto space is the automatic generation of smart contracts tailored to the specific needs of a user or organization. This may involve generating contract code based on a set of inputs provided by the user, such as the terms of the agreement and the parties involved.
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AI-Assisted Encrypted Homepage
The idea is to use LLM to translate human-readable commands into on-chain data or code for smart contract interactions. As an example, a user could enter "Convert my volatile assets in this wallet to stablecoins and deposit them evenly among the 5 safest yield-generating pools you can find".
Additionally, LLM can be used in the opposite direction, by reading a set of smart contracts and generating a summary of their functionality. Alternatively, read on-chain activity for a given wallet address and identify the holder as an "NFT whale", "DeFi degen", "high credit", etc. Alternatively, read unresolved on-chain transactions and generate human-readable translations.
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Proof of Humanity
In a world where artificial intelligence is increasingly pervasive, proof of humanity becomes increasingly necessary. That is, how can a human creator prove that a piece of content was written by them and not a robot?
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Decentralized AI
In a perfect world, AI models would be able to run and even be trained on local devices, rather than relying on cloud computing. This motivation is exactly the same reason we want to decentralize money, finance and social media, because it will provide some degree of censorship resistance to the companies that create these models.
Taking this idea a step further, imagine a marketplace where those who need computing power for their AI models can connect with those who have it to spare. As opposed to centralization, this market approach may reduce the cost of running and training AI models and provide a greater degree of censorship resistance.
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Social networks and games that embrace AI
Our key insight was that while Crypto provides a user experience that may be worse for many than Web2, it is better for bots.
In crypto-enabled finance (DeFi),Auto traders have a better user experience as they don't have to worry about bankruptcy and withdrawals.
In a fully on-chain game,AI players benefit from a better user experience as they don't need to worry about being banned from the platform.
In decentralized social media,AI participants have the opportunity to contribute meaningfully to the conversation without worrying about annoying the moderator.
the most important is,AI, unlike humans, does not suffer in the same way as humans when faced with related repetitive trivial events.For example having to sign every transaction for every action, waiting a few seconds for a transaction to settle, re-signing a transaction if the previous transaction failed, replenishing the wallet, etc.
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12. Define the verticalization of category products
In past cycles, we have seen the rise of several category-defining products. These categories include:
NFT market;
wallet;
DeFi aggregator/dashboard;
data analysis.
Each of these defined categories of products can be verticalized:
geographical area;
user segmentation (e.g. amateurs vs. professionals);
vertical (e.g. gaming, art, music, etc.);
blockchain;
Devices (for example, desktop vs. mobile).
Take the NFT market as an example. Each of the above vertical dimensions has an Opensea:
East Asia, Latin America, America/Western Europe, etc.;
Amateur traders, professional traders, etc.;
In-game items, art, land, music, etc.;
Ethereum, Solana, etc.;
desktop and mobile devices.
Readers can also use products such as Metamask, Zapper, and Dune to do the same vertical thinking exercises.
Fundamentally, consumers in these different market segments have different needs and preferences. Therefore, it is simply impossible for current products to serve everyone.
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13. DAO as a risk-sharing tool
There are some high risk high reward careers:
professional player;
white hat hacker;
Youtube/TikTok creator;
musician;
story writer;
Drug developers.
A DAO for gamers/hackers/creators/musicians/etc could be the perfect vehicle for these professionals to share the risk while maintaining the same expected return. It is no coincidence that the first generation of DAOs were basically investment DAOs. Entrepreneurship and investment are high-risk, high-reward activities.
These DAOs will serve three main functions:
curation:They seek out and admit high potential members.
Risk sharing:They invest in new members in exchange for future financial growth. Members can choose to share each other's good points.
support:They provide support to each other, such as marketing and distribution.
Why are DAOs compared to traditional legal entities?
Fundamentally, DAOs can reduce the friction associated with traditional legal frameworks. DAOs may be a better choice than traditional legal entities if:
Members change frequently:Imagine the amount of paperwork involved!
Members all over the world:Multiple jurisdictions mean dealing with legal and banking complexities.
Members wish to remain anonymous:first level title
14. NFT community as a digital country
One of Crypto's key endgames is the abandonment of the nation-state, the basic organizational unit of humanity.
Crypto enables us to grasp property rights, realize the constitution and laws through smart contracts, realize taxation through token issuance, realize national currencies through cryptocurrencies, realize transparent decision-making through decentralized governance, and realize international trade through DeFi.
The idea, then, is to start with an online community with a collection of NFTs representing their identity, a common set of interests or beliefs, a path to economic growth, and ultimately a vision of a digital nation entering the real sphere.
