1.     A federal judge in the US says governance tokens might come with legal liability. bZx DAO and founders were sued after $55M hack. A class-action lawsuit was ordered to move forward 

2.     Arbitrum DAO’s first-ever governance proposal came under heavy attack, causing many to question the decentralized governance nature of the DAO. The Arbitrum foundation transferred $50M of tokens to Binance and admitted having sold $10M. The first governance proposal has been broken down to parts and are up for new votes in order to provide more transparency. However, the DAO is still reeling from the chaos. 

3.     The Arbitrum token was airdropped to many DAOs. For example, Sushi DAO received 4.249 million $ARB. This was the first time for DAOs to receive airdrops from a major blockchain. The liquidity will hopefully help many DAOs to last this crypto winter. 

4.     The total liquidity in DAOs, went up more than $12B last month because Arbitrum transitioned into a DAO. The DAO ecosystem also added more than half a million wallets as a result. 

5.     Ethereum’s Shanghai upgrade will unlock 18 million staked ETHs on April 12, about 15% of all that’s in circulation. What will happen to the price? 

Short intro: Klima DAO is a DAO that gives everyone an opportunity to participate in the carbon market. You might wonder, why do I want to participate in the carbon market, I do not know such thing! Well, do you want to save the beautiful Amazon Forest in the picture above with Mark Cuban? If the answer is yes, then read on!

Mark Cuban, a serial entrepreneur, owner of the NBA team Dallas Maverick, is a fan and investor of Klima DAO. The above picture is an on-chain carbon retirement certificate issued from KlimaDAO to Mark Cuban.

KlimaDAO is an investment platform utilizing blockchain technology, governed by a DAO. To fully understand what KlimaDAO does as an investment platform, there are a few words that you should familiarize yourself with first:

Carbon bridge: Connects the voluntary carbon market to Web3; creates tokens that represent carbon credits

Carbon offset: A carbon offset unit represents the removal of one tonne of carbon dioxide equivalent from the atmosphere

Carbon pool: Allows for some level of commoditization by pooling similar carbon tokens based on specific criteria

Read the full list here.

Essentially, KlimaDAO is engaging in a voluntary market of carbon emission offsets. KlimaDAO fights climate change by accumulating carbon emission rights and locking them in its treasury. Every Klima token is pegged with 1 tonne of carbon offsets. The platform is a fork of Olympus DAO, an OG DAO.

A couple months ago, we wrote an article on why decentralization is a spectrum. Many DAOs brag about their decentralization status, claiming that they are “decentralized”. If you’ve read our article, then you know that we think the term “decentralized” is misused. KlimaDAO sets a perfect example by stating that no DAO can start off as a decentralized organization because nothing will get done. KlimaDAO started off with a core team, and as the platform gradually took shape, the team brought in a group of contributors to set up the DAO. The DAO did not open for public application until December of 2021, when the DAO felt comfortable with its governance design. An organization does not become decentralized overnight. Instead, decentralization should be a long-term goal.

Why does this happen? Why do players suddenly lose interests in the game that they have devoted so much time and money on? The answer lies in the misalignment of interests between players and game developers. Most games prioritize on either attracting new users or making existing users spend more money. Gamers, on the other hand, just want to have some fun. The misalignment may be impalpable at the very beginning, but it will most definitely surface later on as new patch or new paid content is released. All players have no choice but to accept the change if they want to continue playing. This is the number one reason why players leave as there is no option to “fork” their way out of this patch that they find so out-of-place. Imagine a gaming DAO that allows you to opt out of the new patch so that you could stay in the current meta…

First, I want to answer two questions you may have.

1. What’s the difference between gaming DAO and an in-game community such as clan/guild?

Both groups are consisted of the same players, but the essential difference is the ability to govern. A gaming clan/guild acts like a club with little to no say on the direction of the game. A gaming DAO, on the other hand, can collectively vote on the direction of the game.

2. What is the most important part of a gaming DAO?

Here comes the tricky (perhaps?) part. Every gaming DAO must have game developers who are onboard. Paying game developers a salary is probably the only way to get them onboard. You might think I am crazy to suggest gamers to pay for game developers’ salary, but the truth is, part of every dollar gamers spend in a game actually already goes to game developer’s salary.

So, you got the game developers, what’s next?

Congratulations, now let DAO take the wheel!

Pay for the content your gaming community enjoys. A gaming DAO can collectively vote for new content to be released. Players can now have a direct line of communication with game developers, which has never happened before. Any modifications to the game will be approved by the DAO and executed in smart contracts.

Buying gaming token will never be a one-way transaction. You can now sell the tokens you earn from playing the game or participating in game governance. This play-to-earn concept isn’t new and has been applied to multiple games already.

A never-seen-before upgrade to gaming communities. You and your friends are no longer only talking about how to strategically play the game, but also how to strategically design the game in your favor, a whole new level of experience.

The list of benefits goes on. At HelloDAO, it is our mission to continuously educate the world on how DAO can benefit every aspect of life. Our journey has only just begun and we invite everyone to join HelloDAO in this journey!

Many universities in the world have a college of Liberal Arts. It is usually translated as “college of literature” in Mandarin. I often feel odd about this translation, since they teach so many subjects, or courses, in these college.

Liberal Arts of Harvard University holds 18 mandatory courses as vital parts of their program. Those courses are related to natural science, social science, humanities,arts, etc. So, it would be inappropriate to categorize all of them as “art of literature”. Liberal Arts covers a variety of subjects, which differs from any other majors which only focus on specialized subjects. Education of Liberal Arts is expected to establish an expanded system of view of the world and value. It is an education for the heart and soul.

My interest in this word came from a DAO. This DAO is trying to establish Liberal Arts for Crypto. It is a DAO for education, the exploration of art, literature and social science. It is called Crypto, Culture, and Society.

First time that I stumbled upon this DAO was in October of last year. Albeit lesser known, it gained Web3’s primal support and created a set of attractive courses. I was attracted by the compelling names, unique views of value and solid courses. But at that time, I did not fully understand the purpose of Liberal Arts in the world of crypto. I began to understand it a little bit deeper only after spending another 6 months.

(I am not going to talk about the details of this DAO today, which will be a separate article. I lurked in this DAO’s server for a couple months. Recently I registered and was selected as a second-semester student. I will share my thoughts when I have time.)

Education in Web3 have always been associated with how to use wallet, what DeFi is, what’s L1 and what’s L2. Thus, the most popular people in this industry are tech-experts, entrepreneurs and scientists because this is a tech-built world. On the other hand, culture is the neglected part in Crypto community, even despised to a certain degree.

However, does the industry only want a technical product? Obviously not. Ever since David Chaum in the 80’s, cypherpunks in the 90’s, all those people ever wanted was to make the world a better place with the cryptography.

Syndicate tried to break the barrier between community and VC investors.

Krause House tried to help sports fans to fight for the right to speak.

PubDAO tried to reshape the business of publishing houses.

Bore Ape Yacht Club, Azuki, and Mfers tried to change how people think about brands and the contagiousness of brands.

All of them are reshaping the society. Their thoughts, value perception, and the construction of narrative and cultures are more important than the crypto and tools which are merely tools.

In the world of Web3, the power of narrative, the ability of constructing culture, as well as bringing people together are the fundamental skills.

Top Web 3 investors such as A16z, Paradigm, Multicoin, and the newly joined Sequoia Capital, all have strong ability for continuously creating narratives.

Tens of thousands of PFP (avatar) NFT projects were already down to zero or are going down to zero. For those that survived, they all successfully built up their own culture, and through culture, they formed communities.

Good DAOs are like them. The value of each member of a DAO is united with strong culture. This is the only reason that a DAO can survive. Most of the time, DAOs have a laid-back vibe, GM in the morning, LFG at noon. The heavy work behind is often not revealed. Without enough self-motivation, no one will stick to the end. So, the values, vibes, and united friends are the only things that keep people going.

I’ve seen many DAOs where the core contributors talk about the future with stars in their eyes. No matter what future lies in their heart, I am touched by the shimmering in their eyes. This is the power of belief and culture.

These stories, these cultures, and these communities, will eventually shape the next version of this world.

With tech, with warmth.

Welcome to a future society of web3 and liberal arts.

Welcome to a future society of web3 and liberal arts.

     This article won’t be an article that points out the fault of someone, or what could have been done better because there are already countless articles that do that. What this article will do, however, is reiterate the importance of transparency, the original purpose of cryptocurrency, and show that there is a silver lining in everything.

     The aftershock from the collapse of FTX empire is still happening. Once the industry calms the storm (it always has), I predict all the discussions will be shifted towards how we can trust again, especially in this industry. We trusted Do Kwon Luna’s high net worth and SBF’s high profile and media attention, but they unabashedly proved us wrong. The ultimate test for trust is no longer high net worth, high profile, or high media attention. Many people don’t know how to trust or who to trust after watching billions of dollars evaporated in days’ time. After the FTX debacle, we have seen exchanges such as Binance, Crypto.com and Huobi scrabbling to release their “proof-of-reserves” wallet addresses in order to boost trust. In our opinion, an alternative solution is already here. DAO is the ultimate key to solve the puzzle of trust. We are not here to advise you on who to trust, but how to trust. Trust not human, but code. The trust formed in a DAO is concrete, proof-based, and efficient. It’s our job to make DAO easy and accessible to everyone.

Last but not least, in case you are wondering, HelloDAO is still in it for the tech ;) HelloDAO doesn’t take sides; nor does it choose to participate in the CeFi vs. DeFi debate. The difference between blockchain technology and blockchain token must be made clear. Many people assume buying a specific token automatically grants them a promise to something great, but that’s not true. Most importantly, HelloDAO will never become the likes of Terra, 3AC, or FTX, because we believe in empowering individuals by distributing power and knowledge to the general public.

1. A governance token, which is used for voting on important decisions, e.g., the election of a governance committee.

2. A permissionless setting that welcomes anyone to become a member (sometimes by buying a certain amount of governance tokens), contribute, and get rewarded.

3. A flat and non-hierarchical structure with less strict rules and less management. Members are not employees, but the owners of the DAO.

4. An open and spontaneous culture that encourages the members to take the initiative and contribute to the DAO, rather than just taking the assigned tasks.

All of these seem to make sense, except that they do not lead to success. IMO, an organization that having these features is not even necessarily a DAO, as the key essence of DAO, automation, is somehow (or maybe deliberately) ignored.

Automation is the key

DAOs == automation at the center, humans at the edges.

— — Vitalik Buterin

This quote is from the original article in which the concept of DAO was introduced in 2016. By that time, it was quite clear what a DAO is: It is a new type of organizations with every piece of rules and regulations written on Ethereum as smart contracts. As a result, the organization can be automatically operated with all predetermined rules automatically executed and thus cannot be manipulated by central authorities, i.e., code is law. However, this dream was quickly scattered by the DAO incident. It turned out that the blockchain technology is not advanced enough to automate all rules of organizations.

However, even if the DAO failed, it is quite clear that the essence of DAO is that it should be run by codes instead of human. Decentralization, or namely the blockchains and the smart contracts, is the technique to guarantee the codes being executed without the inferences of humans. Then, when something is indeed not feasible to be described or executed by codes, humans should be included in the process. This is the DAO Vitalik suggested: “automation at the center, humans at the edge.”

Currently, DAOs run in a completely opposite way: with humans at the center and codes or the automation at the edge. They only play their parts in some very specific occasions, e.g., members vote to decide whether a large amount transaction could be made out of the DAO’s account. Even in this very occasional moment, the automation is mostly a symbolic movement for a decision already made by humans.

It might be hard to see a problem in here, so let me give an example: Bitcoin is sometimes referred as a successful DAO. Bitcoin holders autonomously contribute to the success of Bitcoin by mining, advertising, coding, and building the Bitcoin ecosystem. However, in the center of Bitcoin, it is the consensus described in the whitepaper of Bitcoin and the code of Bitcoin core that lay the foundation. Now, let’s imagine a Bitcoin started without a consensus mechanism and the Bitcoin core, but with merely a mission of “creating the first decentralized digital currency”, a vision of “overthrowing all central banks”, and a governance mechanism “every time a transaction is made, every token holder should vote to approve or disapprove it. The token holders will get mining reward for their contributions”.

Just like many other DAOs nowadays, this is a DAO that could work in theory. Then, as this DAO operates and evolves, with some good talents onboard, it might be even possible that the members come up with a consensus mechanism that eventually automates the process. However, in practice, I doubt this Bitcoin would be as successful as the one that Satoshi Nakamoto created. The fact is, Satoshi Nakamoto’s Bitcoin gave birth to the technology we call blockchain and later on inspired all decentralized technologies known as Web3 today. None of these could happen if Bitcoin is given without its consensus mechanism.

Public blockchains vs. DAOs

In that sense, public blockchains and DAOs have many things in common: Most modern public blockchains are also DAOs. They have governance mechanisms that based on the votes of the token holders to make important decisions. They also hold a fund to reward the contributors. Then, one can argue that it is not a DAO since this fund is not managed by voting. However, voting is merely a semi-automated process of rewarding contributors. Public blockchains, on the other hand, have a fully automated process of contributing and rewarding, which is the incentive mechanism that rewards the miners. In that sense, most public blockchains are better designed DAOs with automated rewarding mechanism for contributors. However, this automation mechanism is not scalable since unfortunately, these are not applicable to the DAOs that are not pursuing to build a trusted ledger.

The road to automation: DAOs need their own ERP systems

It is unfair to deny the effort of automation made by DAOs. To say the least, the governance token, the on-chain voting, and the multi-sig wallets are all automating certain processes of organizations. The key message of article is that DAOs and DAO toolings shouldn’t stop here and presume that these are the only automation required for DAOs. DAOs should be automated in a much larger scale.

If we look into the governance models of some popular DAOs, e.g., Bankless DAO or Gitcoin DAO, it is clear that most processes are not automated. For example, during the fund application process, both the applicants and someone from the DAO management have to take initiative in multiple steps to manually push forward the process. In fact, it is the duty of certain roles to keep tracks of all incoming proposals, assign them to the correct people, and supervise the progress. However, we actually have tools to deal with these duties decades ago, called Enterprise Resources Planning (ERP).

On one hand, it might appear strange since ERP systems are always related to big enterprises that are very different from DAOs. On the other hand, it is also unthinkable that DAOs, known as the new type of organizations for the future, operates in such a way that even the most trivial tasks have to be manually conducted by the highest paid talents of the organization.

One can always argue that such tools are not used trying to avoid centralization like traditional organizations. Hence, some inefficiency is merely a trade-off to decentralization. However, I can’t see the reason why letting a committee or some selected person be in charge of these duties more decentralized than ERPs systems. Even with a centralized ERP system, an automated workflow is still more decentralized in the sense that less human could interfere the process. Another worry is that using such system will restraint the autonomy of the DAOs and poison the open and free culture of DAOs. AS a matter of fact, I am not implying that we should ask SAP to build ERP systems for DAOs, but suggesting that DAOs should build their own ERP systems. A good starting point is to automate the daily routines of the current DAOs, e.g., a workflow of project application that could automatically involve the correct person in the right time so that they can discuss, comment, vote, and fund the project.

Conclusion

Basically, I am suggesting three things for existing and future DAOs: First, organizations with merely spontaneousness and optional usage of governance tokens and voting are no better than traditional organizations and is not a real DAO by definition. Automation is the key and the foundation of DAOs. Second, DAOs should emphasize more on rules, automate the rules in codes, and minimize the human interference in the execution of the codes. Hence, ERP systems should also be used in DAOs to automate certain processes, although they sounds centralized and have nothing to do with blockchain. Third, DAO toolings should learn from both existing DAOs and classical ERP systems and build ERP system for DAOs. Automating the daily duties of DAOs, even without any usage of the blockchain technology, is laudable. However, for the flourish of DAOs, the future DAO toolings would merge ERP systems with on-chain ledgers and smart contracts.

Granted, each country is different in terms of wealth distribution, political structure and degree of freedom. So, the scenarios covered in this article will not apply to 100% of the world. Nevertheless, introducing the potential of DAO on town governance to the grand public is aligned with the mission of HelloDAO. The issues and results discussed in the following paragraphs will highly pertain to typical middle-class towns in the USA where I grew up in. For our readers not familiar with a typical American suburban town, here is a pretty good example. For townfolks, networking, mayorship, infrastructure, and volunteering are some of the most important topics discussed on a daily basis. While there are other topics, today we will only be focusing on these aspects of DAO governance in a town.

1. Networking

A town is comprised of a network of families. Most kids don’t leave their hometown until they go to college or find a job elsewhere. We often hear of these stories in which the hiring manager favors an applicant from their hometown, possibly same school, too and the applicant ends up getting the job. Sounds a bit unfair, but that’s how relationship works in society. Note that this isn’t called nepotism, but networking, which is entirely different from nepotism. Networking isn’t inherently evil because it also creates job opportunities. Many new college grads complain that they don’t know how to network. Well, DAO can help. By uploading your identity information on the blockchain, a DAO as a simple group chat outweighs a typical “Facebook group” because no one can fake an identity anymore, which adds tremendous value to the group. Most town’s “Facebook group” simply doesn’t foster relationships between townfolks because everyone knows a Facebook account isn’t that hard to fake, and malicious players are out there to get us. Most Facebook group admins don’t get anything for gatekeeping the group chat from outsiders, but in a DAO there are so many ways to incentivize valuable behaviors, and those who provide value will forever live in the history book of blockchain. For example, if you successfully created job opportunities for the townfolks, a non-transferable NFT badge can be issued to you representing what you’ve done for the community. Good behaviors shouldn’t be kept close-door, and those who consistently provide value should be rewarded publicly. Most importantly, DAO members/townfolks would be writing a history book of their own time and their own home, actually leaving a legacy that will forever be remembered.

1. Mayorship

Most people feel ambivalent about politics, because politics is at times opaque, manipulative, and dishonest. However, politics is everywhere in our daily lives and some people even desire to be politicians one day. There are two main issues associated with voting in today’s world, invalid ballots, and human-induced errors/manipulations. In a town DAO, voters will vote on a blockchain. In order to be eligible, one must be a member of the town DAO and receive a voting ticket NFT that will be burned once the vote is casted. Smart contracts will first determine voter’s eligibility and then take away the voting ticket once the vote is casted. There’s won’t be any writing on a piece of paper, transporting bags of ballots to a secure location, or counting votes in a “sandbox” environment. Voting should be an unadulterated manifest of democracy, but only by decentralizing the current system can it be achieved.

1. Infrastructure

Let’s be honest, America isn’t famous for its infrastructure projects. In a town, people shouldn’t have to wait years for a small bridge to be built because they have to deal with all the bureaucracy. In addition, there are projects that could benefit many folks in town, but simply won’t get approved for budgetary or whatever reason. If you want to do it yourself, you and your cousins might be short of manpower for the job. And you never receive all the credits for it because folks across the town simply won’t know about it! You ask a few neighbors whom you thought your interests are aligned, but many people are concerned about being taken advantage of. The project gets delayed again. In a DAO, for a collaborative project to start, you only need consensus because trust issue is eliminated by blockchain and smart contracts. Find stakeholders in your DAO who can actually benefit from the project, create a wallet where everyone can deposit money into, then govern the wallet with smart contracts. If it is a commercial project such as a water-sliding facility, founding members could even receive future revenue via IP-NFT. The possibility is endless.

1. Volunteering

Depending on where you are from, there are many volunteering works taking place on a daily basis. In this article, I am going to classify all unpaid “jobs” to the volunteering category for simplicity. The reason why I do that is because these jobs don’t have to be unpaid, and volunteers should receive credit where credit is due. In a town DAO, “unpaid jobs” will disappear. Let’s take carpooling for an example. In a suburban setting, you can’t really go anywhere without wheels. Thus, carpooling for kids is very common in schools. Carpooling is shared in a small circle in which the parents trust each other. This small circle typically doesn’t grow due to trust issues, and no one is keeping records. In a town DAO, all volunteer works such as carpooling will be rewarded with token or NFT. Token is for economic incentives while NFT can be used as a proof of work. Carpooling no longer has to only be kept in a small circle, because an “Uber” like experience can be actually created by the town DAO. Parents with many successful carpools will have the chance to join other carpool groups because of their track record. Check out our previous article on “Uber DAO” for more details. For students who volunteer at certain clubs, their experience can be uploaded on the blockchain and act as a proof for when they apply to college or a future job.

The benefits that a DAO can bring in a town governance is limitless, because DAO represents a more advanced way of distributing resources, facilitating trusts, and creating values.

I like to start getting to know a DAO by diving straight in their discord, provided they use discord as the base for community engagement. Of course, this approach is not a one-size-fit-all. For DeFi DAOs, it’s much more important to first understand the technicality behind the actual protocol. VitaDAO discord has a list of 20 roles that a new user can select from, indicating strong diversity in member backgrounds. As it should be, everyone is the ultimate beneficiary of science. There’s also an open channel for scientific project pitching, members of the VitaDAO are attentive to each and every pitch with a strong focus on commercial possibility. Continuing education is another strong focus. It is encouraged that members apply for fellowship grants to attend conferences and labs. The first round of fellowships was also co-sponsored by Vitalik Buterin. In Vitalik’s most recent article on DAO governance, he also mentioned VitaDAO as a “newer type of DAO organized around performing various tasks around a particular theme”. In my opinion, this type of DAO has the most potential to become mainstream in our society as they are not just a group chat with a group wallet but an organization with strong consensus.

VitaDAO is split into multiple independent working groups, a common practice in many DAOs. According to their website, VitaDAO has funded over 14+ longevity research projects and deployed $2.5M+. VitaDAO as an investor is looking for “moonshots” or “homeruns” — potential revolutionary contribution to science. On their website, you can clearly see the projects that have received funds along with all the background information. What’s really unique about VitaDAO is their use of IP-NFT. IP-NFT is a unique benefit that can only be achieved by a DAO. An IP-NFT is a tokenized intellectual property asset. Check out the first research organization in the USA to fund research via an IP-NFT here. It also provides a pretty good explanation on IP-NFT. VitaDAO first raised 5m via token sale from the public in 2021. Notable investors include Pfizer, which invested 500k in 2022.

Albeit ambitious, VitaDAO still has some limitations. For example, it is specifically stated that researchers should have access to appropriate facilities for the work they propose. Given that VitaDAO has limited funds, it is understandable that funds of great magnitude such as for buying an entire laboratory won’t be so easily granted, while corporate and national donors have a much higher tolerance for risk. As boldly stated in our previous article, Science DAO will reduce scientists’ reliance on universities and the intellectual property will belong to the DAO. Currently, given its size restraint, VitaDAO or science DAO in general still has to work with universities in a sponsored research agreement which states that the intellectual property belongs to the DAO. So, in that sense, VitaDAO is closer to a “corporate sponsor”. VitaDAO is committed to funding research with the highest commercial ability that can bring huge economic value because having to negotiate with universities is not ideal. VitaDAO needs to have profit-generating IP to be self-sustainable. It is a race with time. But, I am confident that more people will see the virtue of science DAO and want to become part of it.

I interviewed my mom who has a Ph.D. in Condensed Matter Physics. She’s focusing on finding the most optimal rocket engine propellant. I figured, in terms of scientific work, it rarely gets more complicated than that and if she can find virtues in DAO, others can too.

I asked her what the most important things are for continuing her research, and the answer might shock you. It turns out, it doesn’t matter if you are building rockets or selling lemonade, all you need are two ingredients, money and people. Scientific research almost always requires sponsors, typically government, corporations or universities. But there are different caveats associated with where you get your research grants from. Government typically offers grants for all types of research, but application process is often long and bureaucratic. Corporations are usually the most generous when issuing grants, but they limit the scope of research and are after a specific outcome in which they can make more money on the investment. University is a combination of both, but their ability to provide financial support is highly dependent their endowment, which usually has restrictions set in place by the donors on how the money can be spent. Getting research funded is the most important thing for scientists, and the current application process needs a drastic revamp.

In order to apply for a grant, scientists have to carefully prepare a research topic, lay out the budget, find and file to the appropriate sponsors. In addition, most sponsors will require recommendation letters, past research experiences. Validating all the documents results in a long turnaround period generally between one month to six months. Given the grants are often large, meticulous vetting process is warranted. However, there isn’t a shared database for universities, corporations, and governments which means the vetting results are not shared. Scientists don’t often apply for grants from the same organization either, which means lots of time are going to be wasted on vetting the same applicant or doing redundant background checks. Moreover, most background check service providers do not even offer a tailored background check process only for scientists that are designed for fast turnaround. The project reviewers cannot start working until the background checks are cleared. Scientists need a reliable database as lifesaving research cannot be postponed due to administrative inefficiencies!

Such database would have to contain all the information a scientist needs when applying for grants such as diplomas, ID & resume, past application results, published research paper and patents. How do you build such database from scratch? Well, you don’t have to build it from scratch because the infrastructure is already in place. Let’s say you are a scientist at a reputable university. You and your colleagues can register for a DAO, and everyone will receive a founding member NFT. As you start to apply for research grants, you upload all the application information on the blockchain. The smart contract in the DAO then binds this information to you, and it is only viewable upon request for members outside of the DAO. Everything you uploaded on to the blockchain is immutable. Blockchain assumes the role of government and grants legitimacy. Note that the blockchain will not make background check companies go out of business, because their service is still needed when new aspiring scientists join the DAO.

Now let’s move on to how the DAO can help with funding projects and other additional benefits. Most people think of “token” as “money”, or virtual currency, and that’s only partially true. Besides monetary value and fundraising, token is the key that unlocks full potential of a DAO. What I think is still missing from a science DAO is an active and involved public. Typical pharma research sponsors are only willing to invest if there is a sizable market for the drug. Therefore, when you hear an ultra-rare disease is incurable, you really should be thinking if that’s because of lack of sponsors. Priority for scientific research shouldn’t be solely determined by profitability potential because the ultimate beneficiaries of scientific research are ordinary people. For people with ultra-rare diseases, they can contribute financially together to fund research on the diseases that they actually care about the most. Scientists can then apply for grants on that specific disease and hopefully lots of lives will be saved. Another huge benefit is that the people who funded the research can also be part of the research as they provide valuable firsthand data for the research topic itself. Something like this is unimageable in today’s world, but with DAO, it can become a reality. With token ownership, sponsors will also share whatever economic benefits that comes after the research is concluded. Peer-review process can also be drastically improved with scientific DAO. Currently, there is almost no incentive for peer-review process. In a scientific DAO, peer-reviewers will receive token for their service. Sounds simple, but it can solve a problem that has been plaguing the scientific world forever. Already-famous scientists will have their paper peer-reviewed more easily than the less famous ones. In the field of science, experience doesn’t mean everything, and past results certainly won’t guarantee future performance. Incentivizing the entire peer-review process will be like adding fuel to the engine of science.

The purpose of this article isn’t really to advertise for blockchain technology. I sincerely believe DAO can save lives, make our society a better place, and I have demonstrated how it can be done. Our next article will be a deep dive on Vita DAO, which is a scientific DAO searching for the secret of longevity. Science DAO is a proven concept, and I can’t wait to tell you guys about it.

What do you think discord user “austin” with a pixelated pfp writing in all caps would have achieved with the message he wrote? You would think he’s kind of… well, mental, right?

But what if I tell you they raised 47 million dollars in 6 days?

That’s right, 47 million dollars, from 11/12/2021 to 11/17/2021. Raising 47 million dollars is a small feat compared to some of world’s fund raises/IPO such as Alibaba raising 21.8 billion dollars on their Nasdaq IPO. But, most people don’t know a company has to pay 3% on total money raised to the underwriters (the investment banks), which will help sell the shares and thus raising money. Even on popular crowdfund sites such as Gofundme and Indiegogo, they charge a fee around 5% on total money raised. In the case of Alibaba, the investment banks collected more than 300 million dollars in fee. At 3%, Constitution DAO would have to pay over 1.4 million dollars in fee. Instead, the DAO structure allowed them to pay nothing to no one. The backers of the Constitution DAO only had to pay a small amount of transaction fee (gas fee) to the miners on Ethereum. Only a DAO structure can lower the barrier for people to become stakeholders and drastically increases the value an organization is able to maintain.

You may wonder, how could you trust the person handling the 47 million dollars won’t take your money and run away? We met on the internet, but we are still strangers to each other!

The issue for strangers to work together, crowdfund, and eventually create and distribute value is trust. The investment banks, Gofundme and Indiegogo’s secret weapon is people trust them and that’s why they can charge whatever amount of fees they think is reasonable. I am not arguing the middlemen don’t provide value to project founders and organizations, but it can’t be ignored that they also extract value from project founders and organizations. DAO once again comes in as a better alternative, as proven with the case of Constitution DAO. People can trust the Constitution DAO won’t misuse their money because the money (Ethereum) is on the blockchain, locked up in various smart contracts which prevents embezzlement. Those who contributed money received the “people” token, at a 1 ETH: 1,000,000 $PEOPLE ratio. It was also written in the smart contracts that shall the acquisition fall through, backers could receive their money back at exactly the same ratio. No human interaction or trust is required, for both the deposit and withdrawal process.

And, as it turned out, the Constitution DAO did not acquire the original copy of the Constitution. Ken Griffin was able to outbid them. Naturally, many backers retrieved their Ethereum afterwards, but some kept the “people” token as a souvenir for the Constitution DAO was a great success in terms of fundraise and strangers working together. The wonder of Constitution DAO will resurface again, in the form of other DAOs which we hope to incubate in the future.

The gig economy is characterized by flexible work hours such as food delivery and ride-hailing services. Apps such as Uber, Lyft, and Doordash, hire contract workers and act as a middleman between customers and those workers. The aforementioned companies have undeniably achieved huge success as they have a combined valuation of 70 billion dollars as of October 2022. The reason why these apps are better than the traditional Medallion Taxi Services is that these apps effectively break down the barrier between customers and service providers by setting up a direct line of communication for each “ride” using GPS and instant messaging/call service. However, the industry faces backlashes over worker’s pay, health benefits, and payout schedule. Workers cannot set the price for their service, and it’s controlled by the app. Workers are categorized as contractors, so companies don’t have to pay health insurance for them. Payouts are often not delivered real-time.

The gig economy apps boast that you can be your own boss and work according to your own schedule. Sounds a lot like decentralization, right? Let’s take Uber for an example. Signing up to be a worker is extremely easy with little requirement while signing up as a user requires almost nothing at all. If you have used any web 3 apps, you will know the resemblance is striking. However, once we dive further into the governance structure of Uber, you will see how centralized it actually is and the detrimental effects of being centralized while it should be decentralized.

First, although workers can indeed set their own working hours, they do not get to decide their pay. As a centralized app, Uber makes all the decision regarding how much they charge and pay the riders and drivers. Number of signed-up drivers is an important revenue driver for Uber because Uber will be able to cut down payment for drivers and increase profit margins for themselves as more drivers are on the road. Operating all over the world, Uber is analyzing data regarding demands for ride, macroeconomics factors such as fuel prices, individual country’s income level, to determine fares. While it might be true that Uber can hire the best analysts, I believe the workers should have the right to determine how much they want to get paid, collectively. They can do this by periodically voting to adjust how much the fares should be based on the actual demand they experience. DAO is the best organization for them because as contract workers, and not legally “employees’ of Uber, it’s difficult if not impossible for them to form a traditional labor union even if they want to. In addition, a labor union is expensive to manage. Cost is a major factor for gig workers. DAO is easier to maintain, cheaper to form, and offers more benefits which I will get into.

Many gig workers are under financial stress, living paycheck to paycheck along with a looming global recession and high inflation. In order to get paid, they will have to wait for Uber to release their pay and their banks to clear the deposit. But the actual process is complicated and time-consuming. In some apps, workers only get paid after customer rates them. While this may make sense for companies that sell physical products which can be returned if the customer is not satisfied, the services provided by gig workers are often “irreversible” and thus cannot be returned. DAO excels at giving payouts better than any of the apps because blockchain is a peer-to-peer payment system with no middleman. In addition, the amount earned in crypto can be used as representation of voting power for important matters such as fares. More experienced workers with more earned tokens which give them more say in important matters as other people will look for their opinion for guidance. Transparent earnings statistics also keeps a healthy balance of professional relationship between workers. Given the low requirement for being a driver, new drivers will constantly join the herd and it’s important that they receive some guidance when voting for important decisions. In a DAO, they will know who the senior members are simply by taking a look at their earned tokens. Every decision must be carefully made in order to improve the well-being of everyone.

The list of benefits of DAO for gig workers goes on. Smart contracts can be embedded in the app that gig workers use, which execute decisions based on the results of votes. Decisions such as when and who should be working, will be easily enforceable since smart contracts can simply lock the workers out of the app if they shouldn’t be working at the time. This will also prevent fatigue driving, reduce burnouts and save lives.

The Orange DAO is only open to people accepted into Y combinator, Y combinator staff and others authorized by the DAO. This membership barrier significantly filters out those who “buy” their way in a DAO or “spectators” who attend meetings but never actually contribute anything. The Orange DAO discord cannot be viewed unless you become a member, while most discord channels have public channels even if you are not a member yet. Although the discord server is not open to public, visitors can still view all the proposals on Snapshot. Anyone who wish to learn what Orange DAO is can still visit their official website which provides all the information one needs and I will provide a summary below.

First off, Orange DAO has the most comprehensive “charter” I have ever seen in a DAO.

In The Orange Charter, a 2600-words document covering the mission/vision, membership requirement/expectation, tokenomics, funds management, voting/governance rules, etc. If you are a Y Combinator Alumni (YC Alum), you can claim your identity token called “Gem”. The Gem will grant you access to the discord, and act as a symbol of your DAO membership. The Gem can be viewed on Opensea. Different than ERC-721 token, Gem is an ERC-1238 token, also known as “Soulbound token”. They are non-transferable, most suitable for on-chain identity management. Once a YC Alum is verified, they will receive a Gem and currently there are 1.1k gems.

As an investment DAO, it has already made over 100 seed and pre-seed round web3 investments and disclosed some of the most prominent ones. Average investment size is 100k. While an investment DAO typically can only have up to 100 members, Orange DAO is registered as a Cayman Islands foundation company, which separates the investment fund and the DAO to provide flexibility with regulation. Since every member has experience in building start-up companies at Y Combinator, Orange DAO can offer start-up companies all kinds of expertise besides money. I mentioned earlier the Orange DAO boasts an 80-million-dollar war chest, and I will break down the investors. Most notably, NEAR, a layer 1 blockchain protocol, invested 15 million into Orange DAO to become their web3 startup partner. Orange DAO builders will consider Near as their preferred blockchain when building applications. Algorand, another blockchain, also invested in Orange DAO’s fund. In addition, DAO members collectively contributed 10 million.

If you are a YC Alum and looking to get your hands on some Web3 deal flow, I would highly recommend checking out Orange DAO!

As we all know, Elon Musk didn’t convert the entire $TSLA balance sheet from USD to BTC. Nonetheless, he did accumulate a sizeable amount of Bitcoin.

So what exactly was Michael Saylor’s proposal? What does it mean to convert the balance sheet from USD to BTC? To be honest, Saylor did not make it clear. My guess is Saylor either wants Musk to convert spare cash to BTC, or to sell everything including the factories and buy Bitcoin, which would be pretty radical. Actually, there are less radical ways for companies to benefit from decentralization and it is quite simple…

What I am trying to say is, it’s good for companies, or organizations to distribute some or all of its power to the members. The power distribution process is also extremely simple. Let’s first take a look at the decentralization chart below. In this all-encompassing chart, the first row is the decision-making method. Second row is membership requirement. Third row is the trust level for member admission. Recalling the political spectrum might help to understand the decentralization spectrum. After all, political organizations can benefit from decentralization, too. Memorizing this chart will help you better interpret the word decentralization next time you hear it, for you will be asking the question of how decentralized it is rather than is it decentralized.

Take Tesla for an example. Tesla is one of the most valuable companies in the world. As a traditional company, it resides near the “right” end of the decentralization spectrum, with Elon Musk as head of the management team. Although Elon Musk may be a controversial figure, he often attempted to distribute decision-making power to the general public, adopting a “far-left” approach via Twitter polls. For example, in Aug 2018 Musk tweeted he was considering taking Tesla private at 420$ a share. Such transactions worth billions of dollars have always only been discussed behind doors among a small group of people, bankers, lawyers, venture capitalists etc. These people must never disclose anything about the transaction before a decision has reached per regulation requirement. Although the transaction never came to fruition, Musk opened a pandora box of distributing power. The general mass began to realize that making such decision is not exclusive to only a small group of people. If someone genuinely cares about the progression of a cause, they should be able to participate in it and have their voice heard. Decentralization makes people feel empowered. In a traditional company like Tesla, shareholders are entitled to share company profits, but rarely decision-making powers.

Musk later had to settle with The Securities Exchanges Commission (SEC) as the SEC claimed he didn’t actually have the money secured and thus provided false statement. Musk on the other hand said he was being completely truthful. A classic “his words’ against “my words’ dilemma. This type of dilemma will become extinct if Tesla moves left towards decentralization. If the “funding” is secured in the form of crypto, Musk could simply reveal the address of the wallet and prove it. Who knows, maybe he could have even organized a fundraise via some of the protocols available on blockchain…

Musk’s inclination towards decentralization grew only stronger. He would constantly do polls that are open-to-all on issues ranging from how a company should be managed to a simple yes or no question on climate change. Before the Twitter buy-out drama, Musk was already asking for the public opinion on how Twitter should be run. In 2022 April Musk initiated a poll asking whether twitter should add an edit button. The general public showed strong interest in wanting an edit button as the result was overwhelmingly positive with millions of votes casted. However, Twitter was, at that time, and has always been, ran as a centralized traditional company. The voters and Musk can only hope Twitter management will notice the poll and consider change. Another poll he did was “Do you want Tesla to accept Doge”. 78% of people voted yes. However, people doubted if Tesla was actually going to start accepting Doge coin, and there was basically no way to hold Musk accountable for the result of the poll. These concerns are associated with centralization, where typically one or one group of humans is in charge of both decision-making and implementation. Situation like this calls for decentralization, DAO, and smart contracts. The votes can be casted on-chain, results of the poll could be executed based on smart contracts, and the voters form a Tesla DAO. If the voice of the people truly matters to Musk, I think decentralization will greatly benefit him.

Undoubtedly, Twitter is a great platform, but it is hard even for Twitter to achieve what DAO and decentralization can bring to the table. This is probably why Elon Musk said buying Twitter is an accelerant to creating the everything app “X”. From Musk’s recent actions and his manifest ideology, I firmly believe “X” is an app that leverages blockchain and smart contracts technology to create DAOs.

According to CityDAO, their mission is to “build an on-chain, community-governed, crypto city of the future”. You might say to yourself: “sounds great, just like all the other promises DAOs have made”. But what if I tell you they have already acquired a 40-acre land in Wyoming, US? What If I tell you Vitalik Buterin, the founder of Ethereum, is a citizen of CityDAO, along with Brian Armstrong, the CEO of Coinbase? If these people are feeling comfortable with CityDAO, then it’s worthwhile to find out what CityDAO is doing right.

The most striking thing about CityDAO is its sleek website design. Instead of drowning users with self-praise and jargons, one can clearly understand the expectations for CityDAO. Under “How to get started”, a ten-minute TED Talk by CityDAO’s founder Scott Fitsimons and three one-minute artcles are presented. In just under 13 minutes, a new visitor can understand all the important information about CityDAO.

Land on Chain: First DAO in history that officially bought land

Citizenship: Become a citizen by acquiring the Citizenship (NFT)

Guild Structures: Internal organizations that keep the DAO running

Scroll further down, we can see an epitome of the 40-acre Wyoming land, dubbed parcel 0.

The guilds are divided into six vital roles that cover every need of the DAO. Contributors can quickly point themselves to the right place. Each guild has an internal meeting every week to discuss important matters and how to address them.

Now let’s dive in CityDAO’s internet presence and marketing efforts.

The most public figure for CityDAO is its founder, Scott Fitsimones. In July 2022 he did a TED Talk explaining his motive and plan for building a great city by DAO. The DAO also publishes a weekly newspaper to provide updates and recaps. The DAO’s media guild has established presence on Spotify Podcast, YouTube, Discord, Twitter, and Mirror.xyz.

Final thoughts:

Having been following CityDAO’s twitter and their discord for over 2 months now, I believe CityDAO has one of the strongest consensuses among all the DAOs I have observed due to its inclusiveness and simple-to-understand concepts. The onboarding process is extremely easy given that there’s no need for a deep understanding of blockchain technology. One only needs to know how to purchase an NFT on Opensea, how to cast votes on Snapshot, and where to find help. CityDAO’s members are very friendly and responsive in Discord.

According to The Network State, there are 7 steps to build a network state

1. Build a startup society, an online community where strangers gather together for a common mission.

2. Industrialization. An online community isn’t always synchronized. An online Union can help community to work together in a healthy way.

3. Establish trust both online and in-person.

4. Establish contact between globally scattered communities via the internet

5. Gain diplomatic recognition from another sovereign state.

6. Real-time update of member counts and net worth

7. Crowdfund a physical land for the network state

If the formula is right, then we can see how far along CityDAO has gone to achieve a network state. Actually, the only ingredient missing is “diplomatic recognition”. It is a daunting task to establish a formal diplomatic relationship with another sovereign country, but I believe the members of CityDAO will work tirelessly to achieve a utopia society that humans have not seen before.

Disclaimer: the author of this article does not own a Citizen NFT and is not economically associated with CityDAO whatsoever. The article is for informational purposes only. Please always do your own research before investing in a project.

I believe the word was an elaborate and deliberate marketing design by the earliest advocates of the technology. The distrust towards centralized entity has grown only stronger after the fall of Lehman Brothers and the Great Recession. A new narrative ensued after the world called for a new order. Developers, builders and early adopters were attracted to the idea of “decentralization” which demands the elimination of the cumbersome, opaque, and centralized organization.

Fast forward fifteen years after the Great Recession, the word decentralized has taken mainstream media and social media by storm, whilst created a lot of misunderstanding and confusion. The world has seen the birth of countless blockchains, the innovative (or lack thereof) decentralized finance, the unfathomable skyrocketing price of monkey NFTs and many bull-and-bear cycles of cryptocurrency. The point is, a lot has happened after the word “decentralization” was introduced to the world by Satoshi’s Bitcoin. Nevertheless, I believe for the past fifteen years we were merely writing the front page of a new history book, not with ink but with blockchain and smart contracts. The actual content of the new history book will be written by the people, united in DAO. History will no longer only be written by the winners. Thus, at HelloDAO it is our mission to prepare people to write the history together. How do we do that?

First, it’s time we ditch the words that are not tailored to us. Reddit does not use any obscure words in its description of the technology and stands to bring hundreds of millions of people onboard for mass adoption. Limit Break raised 200m to build web3 games, but they replaced the term “play-to-earn”, or “GameFi”, with “free-to-own”. I whole-heartedly believe this trend is on the right track and here to stay. For DAO, it’s time to coin our own terms, control the narrative, and cater to the actual needs of people and organization. Well, one must know what a good organization looks like, before coming up with a name. What is a good organization?

In my opinion, a good organization will take full advantage of the blockchain technology and smart contracts, for these are the ultimate solution for trust issues between strangers. Think of a scenario where you need to let go an employee and you are preparing their final pay. You send them money; the money then leaves your account. After confirming the transfer status with the browser (and trusting the browser), you inform them the money has been sent with a mild confidence. The reason why you have mild confidence is because there are a lot of things that could go wrong at the bank. You have surrendered your money and can only pray for the money to arrive sooner rather than later. Up until now it all seems like a run-of-the-mill task. However, here comes the tricky part where another layer of trust is added. Your employee, given that it is their last check and the end of relationship with you, tells you they didn’t receive the money. They are doing this hoping to skim extra money from you or simply waste your time. At the persistence of your newly laid-off disgruntled ex-employee, you pick up the phone and call the bank, asking for an investigation. Unknowingly, you just invoked another layer of trust to an already inextricably intertwined fiction and fact. Do not underestimate this seemingly mundane transfer-of-money, for it involves so many layers of trust. The moral of the story is that layer of trust significantly slows down the process of value transfer. A good organization has minimum layers of trust.

So, how does an organization reduce its layers of trust? The answer is blockchain and smart contracts. Take the situation above as an example. If you are transferring crypto to someone, you and the recipient can both track the status of the transfer on a browser using the same transaction “hash” or ID. Previously, only you can check the status of the transfer. If the recipient claims they didn’t receive it, all you need to do is show the status of the transfer without having to call anyone because transactions recorded on the blockchain are immutable and registered on all other copies of the “ledger”. In the case of an employee dismissal, smart contract can actually automate the entire process. There is no need for you to carry out the transaction and process when dismissing an employee. The action of dismissing an employee and severance package can both be written as an “if” and “then” function in a smart contract which cannot be altered. Once certain “ifs” are met, the contract automatically terminates the employee’s status and sends the last payment.

When you mix the blockchain with the smart contracts, congratulations, you have yourself, a DAO. Now that we have “reverse-engineered” what a DAO is, what do you think the best name for DAO should be?

7. DAOs need "consensus"

Consensus algorithms are the cores of blockchains. It is a rule that all nodes follow to maintain a consistent and ever-growing ledger. This rule is deliberately written in code so that the nodes could follow it automatically and unambiguously. Any violation of this rule will be considered as an adversarial behavior and could receive economical punishment. In fact, this is exactly where the philosophy of DAO roots in. Ideally, the operation of a DAO should also be deliberately written in codes and ran automatically, which as we know is currently impractical. However, rules (let's just use the term "consensus") are still crucial to a DAO. The consensus should be much stronger than a vision, a goal, or a manifesto. It is a set of practical rules that all participants should follow, including

1. The governance mechanism, which defines their rights in the DAO and how to exercise them;

2. Workflows and dismissing rules, which describe the obligations of the members with specifications of how to fulfill them;

3. Incentive mechanism and finance, which specify the reward of the contributions and the possible bonus in the future. The consensus should be as specific and unambiguous as possible. Although it is not yet possible to write everything down as smart contracts and automatically run them on blockchain, it is desirable to use the blockchain technology, or any suitable technology, to remove as much human influence as possible. With such consensus, it is also made clear how to onboard or contribute to a DAO. All DAOers implicitly sign a contract to follow the consensus when joining the DAO. They should follow the workflow to get rewards and fulfill their obligations to earn rights to govern. At this moment, very few DAOs have consensuses that meet this standard. However, I believe such consensuses are musts for all DAOs, which lead to a conclusion: in fact, all DAOs, either eventually derive a consensus that meet this standard, or would fail in a long-term.

8. Encourage forking the DAOs

Fork is arguably a great invention in blockchain technology. Although sometimes considered as a bad event in many public blockchains, it might be in fact the best outcome for an already broken consensus. A fork usually happens when a group of people who once shared the same vision, now have strong disagreement and cannot work together. The key advantage of forks in blockchains is that both forks will inherit all on-chain legacies. For example, in Bitcoin, the legacies include users, ledger, and protocols, which are inherited by both forks. Both forks could strive and the market will decide the value of them. For instance, the total market cap of Bitcoin increased right after the fork of Bitcoin (BTC) and Bitcoin Cash (BCH) due to the fact that the market believes that Bitcoin could achieve more if they go separate ways. Indeed, the off-chain legacies like community, public recognition, collaborators, etc., cannot be fully inherited. However, this is already a huge improvement over traditional organizations where the splitting could be much harder and uglier. In my opinion, forks of DAOs should also be made possible and even encouraged. This conclusion directly follows my other thoughts: 1) DAOs can have different forms; 2) DAOs should have clear and compulsory consensuses ; 3) DAOs will gradually shape their consensuses by governance if they do not have them now. Then, in the process, DAOers will certainly have disagreements with the consensuses. For example, as a DAO thrives, some DAOers would prefer to work in a more organized fashion while the others might prefer a more relaxed form. In traditional organizations, it is natural to downplay the conflict and try to hash out a solution that fits the interest of the majority. Then, the rest should subordinate to the majority. However, in DAOs, it makes no sense to force anyone to follow a rule that he/she no longer believes in and contributes to someone else's goal. In case of disagreement, it is better that the DAO forks into two DAOs which have different consensuses but remain bonded, than to have one DAO with internal conflicts that grow harsher over time. Even if divergences are mitigated, the conflict of interests remains, which could still lead to the loss of motivation and eventually the failure of the DAO. Autonomy is the key success factor of DAOs. All DAOers should either fully believe in the consensus of a DAO and dedicate to it, or leave it and create or find another DAO that they would like to believe in.  Moreover, the relationship of DAOs should be reconsidered. An individual could simultaneously participate in multiple DAOs and it is possible to have multiple DAOs with the same members but different consensuses. Essentially, DAOs are not rivals to each other but comrades: comparing to other forms of organizations, it is easier for DAOs to collaborate since they share the same organizational form. Then, among all DAOs, a fork would be the closest buddy that a DAO could have, since it once shared the same consensus. As a matter of fact, the forks of a DAO could collaborate in a form not possible in other organizations: a member could simultaneously work in both DAOs while the contribution could be recognized by both DAOs and rewarded with both tokens with different weights.  In general, forking should be made a viable solution for all DAOs and the process could be made automatic and painless. I might even consider the freedom of forking as a key of success of DAOs in the future.

9. A DAO universe

The ultimate form of DAOs has been widely discussed. It is mostly agreed that DAOs should not be very hierarchical. Then, some DAOs follow the Bankless DAO's track to create guilds or silos, in which the members are categorized by their skills. A project proposal will then reach out to the guilds and recruit talents to complete their tasks. Others believe that DAOs consist of smaller units called "Pods",smaller groups of people that share similar interests or skills and autonomously formed within a DAO. My thoughts differ from both of them. I believe that there should be no other forms of sub-organizations within a DAO. DAO is merely a group of people sharing the same consensus and act accordingly to it. Hence, in many cases, the guilds/silos/pods are also DAOs as long as they follow a consensus that others do not follow. In that sense, a DAO could consist of many smaller DAOs, which seems to form a hierarchical structure in DAOs. However, the relationship between DAOs could be much more complicated thanks to the distinct features of DAOs. Two DAOs could share members, share visions, collaborate in tasks, hold each other's tokens, participate in each other's governance, or even share all information properties if they are forked from the same root. In other words, the members of a larger DAO X could simultaneously participate in many smaller DAOs, including DAO Y, which is funded and partially governed by X. However, Y is not necessarily a sub-DAO of X or has any organization pledge to X. Then, the only thing that differs two DAOs are their consensuses, which consist of governance, finance, membership management, and workflows. These components can be broken into smaller pieces, namely protocols, which do not come from anywhere. A reasonable guess would be that some protocols are popular and consensuses are simply the combinations of various protocols. Then, the "sub-DAO" Y is merely X with some additional protocols. In fact, the kind of "sub-DAO" is also a protocol, which could be universally used to regulate how such sub-DAOs could be created, funded, and governed. All relationships between DAOs could also be abstracted into protocols, e.g., forks, sub-DAOs, collaborations, retailers, etc. The protocols will be the edges that connect the DAOs in a DAO universe.

4. Autonomous ≠ No Obligation

One of the most attractive factors of working in DAO is that there seems to be no obligations. Unlike the organizations in reality, e.g., companies, most DAOs are supportive to a full autonomous mode that encourages spontaneous contributions and the bottom-up workflows. In particular, a member will first match his/her capacity with a DAO and find a task that meets the mutual interests. Then, he/she writes an application to apply for a reasonable budget. Once the budget is approved, he/she will start to contribute in his/her own pace with seemingly no obligation. The worst outcome is no contribution with no payment. Autonomous contribution is more flexible and could be more effective than classical workflows that based on top-down task assignments. It leads to many successes of DAOs and is sometimes considered to be a key element of DAOs.  From another perspective, it is also impractical to assign tasks to members in DAOs with certain obligations since there is usually no contract signed by the participants with the DAOs. It could also be the case that a person simultaneously participate in multiple DAOs, sometimes with different pseudonyms. Then, as the majority of DAO participants can only work in their spare time, they would prefer to work in such a way that is different from their daily jobs. Furthermore, it is not favorable for the DAOs to obligate the DAOers to do anything: such obligation might just scare off the potential participants.  However, in my opinion, DAOs with no obligation will not last long. An individual could make contribution spontaneously all other time. An organization could operate on spontaneousness some of the time, but not all of the time. This conclusion is simply drawn from the fact that people are different and tend to be lazy. If a DAO simply counts on the proactiveness and spontaneousness of its DAOer to run, it will certainly fail when some DAOers start to take free rides on other's contributions. Here, when a DAO fails, it will not go bankrupt or break into small groups, it simply fades away when members are less and less active and more and more reluctant in making contribution. In fact, this should not even be a problem for DAO, since the blockchain is basically proposed for the same reason: to replace the trust on human nature to the trust on codes. Hence, the concept of DAO is not against obligations. Instead, DAOs should contain obligations, which are written in codes, transparently posted, and ideally automatically ran on blockchain. Then, by autonomous, it means that DAOers could decide whether they want to participate in such DAOs, contribute, and be rewarded. However, once they take part in, they are obliged to the rules of the DAOs, just as they are obliged to the signed contracts with companies. Then, if they fail to fulfill their obligations, they will automatically step down leaving the rest to continue contributing according to the rules of the DAO.

5. DAO ≠ less organized

This thought directly follows from the previous one: with no obligations on the participants, there isn't a way in DAOs to mimic a top-down workflow as in companies. There are already countless examples of pure bottom-up, autonomous projects failed or postponed. As a result, there are claims that maybe DAOs are not good for a certain things, e.g., "heavy" tasks that need clear planning, strong project dependencies, and fixed deadlines. On the contrary, it is more suitable in works that require creativity, proactivity, and passion. In other words, DAOs are more organized than communities but less organized than companies and could be used to create or achieve something "light" but not something "heavy". Then, for a heavy task, it is believed that we still need to do it in a traditional fashion, i.e., starting a company.   It is rather ironic since DAOs are characterized with efficiency, transparence, creativity, etc., and have always been introduced as replacements for traditional companies and the ultimate form for all organizations. However, nobody has ever mentioned that it also has organizational limitations. Tracing back to the basic principles of DAOs, which are the distributed ownership and on-chain governance, they seem to be only better than traditional organizations and there is not explanation on why some tasks are suddenly not accomplishable. Hence, the only acceptable explanation to us is that DAOs COULD handle heavy tasks. The blame should be put on the incapable and inefficient on-chain governance, which is quickly maturing. As a result, the tasks that DAOs are able to handle will grow heavier over time. In the future, DAOs should be able to fulfill the functions of most organizations, instead of only being a more-capable community and less-capable company. In that sense, the simple and minimalist workflow and organizational structure is not sustainable. We should start to discard the ideas like "no obligations" and "pure spontaneousness" in DAO tooling as eventually DAOs will have more complicated, structured, supervised, and dependent workflows just like traditional organizations. That being said, DAOs could be divergent in forms with a wide range of organization levels. However, as the blockchain technology matures, we do not see any excuses why DAOs could only succeed in the current organizational bracket.

6. Rules > Talents

Nowadays, the importance of talents in DAOs is heavily emphasized. Naturally, regardless of the goals of the DAO, it boils down to the individuals who work to achieve the goals. Then, as DAO remains a new concept with few know-hows, it is of the interest of most DAOs to attract as many talents as possible. Then, incentive mechanisms will be set up to motivate them to contribute to the final goals. It is a win-win situation when the DAOers are motivated to contribute to the goal with a satisfactory incentive and the DAO retain talents to devotedly achieve same goal. However, the honeymoon period will not last forever. DAOs will always run into a phase where personal interests conflict with the interest of the DAO. For example, the DAOers who have made significant contributions in the past lost their motivation or find other DAOs more attractive to them (which happens all the time). Then, DAOs have to adjust their rules to keep the momentum and remain productive. In particular, compromises have to be made in between talents and rules. Some DAOs will prefer talents over rules and tend to lower the bar of of participation. This preference is very much related to the fact that people believe that there is no obligation in DAOs and DAOs are less organized, which I have opposed previously. In general, despite of the very attractive and seemingly starter-friendly onboarding mechanism, there are very few DAOs that have a clear rule for dismissal. This fact also linked to my previous remarks to DeGov: due to governance token, people that acquired governance token, whether by contributions or purchase from the market, literally own the DAO and should be part of the governance by default. Hence, it is injustice to exclude them from the DAO or governance. However, if we redesign the governance model and separate the ownership and economical rights from the governance right, it is much easier to include a dismissal rule in DAO. The dismissed member could still own the DAO and indirectly participate in the governance of DAO, but not affect the daily operation and decision making in DAO. In summary, I believe in DAO as a more efficient value-creating form of organizations for the future, which is the base of all my thoughts. Then, my arguments are that DAO will be and need to be more organized, which includes higher involvement level, obligations, and strict rules that could lead to dismissal. DAOers that fail to follow the rules will be dismissed and lose their governance rights, regardless of how talented or renowned they are. DAOs should be more than just a community with talented individuals.

1. DAO is not a crypto (blockchain) concept

     DAO has usually been put into the "Web3.0" narrative listing amongst the other Web3.0 concepts like NFT, DeFi, Metaverse, etc. However, it is actually not a crypto concept. The key ideas of DAO include fairer incentive mechanism to individuals, more transparent and more automatic decision processes, more flexible and variant means of work and collaboration, etc. These ideas, however, are not new to the science of management in the sense that these are exactly what good companies or organizations are pursuing. Indeed, the blockchain technology, as well as all the infrastructures in Web3.0, are the enablers and boosters of DAO. However, DAO as a form for organization, is not limited to Web3.0 applications. The truth is most of the DAOs are related to Web3.0 and the majority of the participants have some background in blockchain and crypto. It is also true that many crypto projects following the tracks of Bitcoin and Ethereum are more similar to DAOs than corporations or organizations outside of the crypto world. Then, naturally, Web3.0 start-ups are more willingly to embrace DAOs. However, none of these facts suggests that DAO should not be used outsides of the crypto world. In fact, as traditional companies face the challenge of the post-covid world, the demand for a new form of organization is actually more urgent than the Web3.0 world. As a result, it leaves the DAO believers to create tools and tutorials for the non-crypto users as what has once be done for internet and information technology in the past. People should be able to freely organize as DAOs and work in DAO only knowing that it is more efficient, more transparent, and more financially rewarding without any knowledge in blockchain or crypto. This leaves a huge task as well as market for the DAO tooling developers to make tools that target the non-crypto users in traditional industries.

2. Governance token ≠ DeGov

The idea of DAO was raised in 2016 alongside Ethereum. It is overzealously considered that with the aids of Ethereum, all decision makings, executions, productions, and financial activities could be automated by smart contracts. However, the fantasy of DAO immediately crashed in a security incident, from which we learned a lesson on how amateur we were in smart contract developing. Then, the idea of DAO was revived as blockchain technology matures and protocols like MonochDAO is developed. The DAO that we are talking about in this article follows this track of development. However, the rise of "governance token" is, on the other hand, a different story. The concept is made popular by MakerDAO (a loan-based stablecoin protocol on Ethereum), where it is introduced as a token that grants you the access to important decisions and adjustments in the MakerDAO protocol. Then, the governance token, namely MKR, is commonly believed to have its price linked to the success of MakerDAO, thus the “stock” of MakerDAO in a traditional sense. This concept was later on widely used by several DeFi protocol in which the governance tokens are used to incentivize users. In this cases, the tokens are mainly proposed as a way to raise funds and incentivize liquidity providers and was seldom used to govern the protocol. In other words, the features of the governance tokens in fundraising, incentivizing, and catching value in the DeFi market, are emphasized. On the contrary, the essence of the governance token, governance, is undermined.  Hence, if we take a step back and reconsider the DeGov problem, we will find that the governance token might not be the best option for governance. For example, as many articles on DAO practices have suggested, it is generally not a good idea to allow capital to buy tokens from the market and accumulate decision-making power in a project. On one hand, this method favors the capital as they could buy tokens to vote for their motions. On the other hand, this might expose the DAO to the danger of attacks, as attackers could buy tokens from the market to make irresponsible or even harmful decisions. Currently, it has been widely discussed if some other indicators, e.g., NFT badges or Soul-bounded Tokens (SBTs), should be used in the governance process instead of governance tokens. In the meantime, we might also want to take a page from the governance of a company, where the right to get economical bonus, namely the stocks, are seperated from the governance (the execution board). Hence, it is more appropriate to mint the ownership property of a DAO to a token with economical rights, but not directly linked it to the governance.

3. DeGov ≠ Voting

The iconical feature of DAO is voting for decentralized governance. It is crucial that all members should take part in the decision making process, which is the basic spirit of DAO. However, the process of voting is in practice, not ideology. In most of the cases, members are not interested in all governance decisions. The voting rates in many DAOs, even the very active ones, are not exceeding 10% and usually very one-sided. Then, the voting process is less essential when the decision is actually made somewhere else. As a result, the inefficiency of voting become almost a "necessary evil", i.e., it is a painful process that the DAOs must go through in order to keep the decision "decentralized". Then, it leaves the DAO tooling to ease the pain of voting, e.g., gathered the proposals in bulletins, making the voting process less complicated, and more accessible to DAO members. In my opinion, this completely distorts the idea of DAO and DeGov. Voting is not an inefficient governance process and governance is not merely a voting mechanism. The whole idea behind voting is to involve all members of the DAO in the whole decision making process so that they are fully aware of and supportive to the decision. This might extend the decision making process, which appears to be inefficient. However, from an organizational perspective, the efficiency is improved as members could execute the decision with higher precision and momentum. This is in fact one of the many advantages that DAO has over traditional organization. Hence, instead of aiming for improving the voting process, DAOs should start to consider governance as a whole: the members ought to be involved even when the proposals are still shaping. They should be given opportunities to understand the proposals and express their opinions before the votes are cast. Hence, a good tool for DAO governance should be able to provide aids to the whole process instead of merely the voting. Some would call this idealistic: how is it possible to demand higher involvement when the members are not willing to even cast votes? I would answer this question by jumping out of the box: what's the point of voting if the voter do not understand what he/she is voting for or he/she is not affected by the result of the voting? How would DeGov then make the DAO more efficient than other organizations? If the answer to these two questions are unclear, then there is no point in involving those members as voters in the first place. In particular, we believe the decision making process should be deliberately designed so that the correct members are involved.

DAO is commonly known as a Web3.0 form of organizations, where people coordinates through smart contracts, earns governance token of DAO, and contributes to projects that build Web3.0 together.

💡 However, we see DAOs differently.

Our vision is , DAOs ARE THE FUTURE of all organizations, instead of merely the organizations in Web3.0. Moreover, we believe that the revolution of DAO is very likely to happen outside the Web3.0 world.

DAOs Outside the Web3.0 World?

Make no mistakes, we are believers in Web3.0 as well as the decentralizing power of blockchain, smart contracts, DeFi, NFTs, etc. We simply see a more urgent need for DAO outside of the Web3.0 world, in which the classical forms of organizations, e.g. traditional companies, are struggling to keep up with new technologies and the post-covid world.

What hampers the world from a DAO revolution

Up until this moment, the DAO has been considered a purely crypto concept, i.e., there is a very small crowd outside the world that knows what DAOs are. Thus, most information on DAOs is only accessible for people who have the basic knowledge of blockchains. In our humble opinion, the crypto world pays too little attention to the needs outside the crypto world.

We believe in DAOs as an idea that could change the world, in the near future. More people, with or without related background, should be able to clearly understand and capable of building a DAO themselves. DAO vs. classical organization, should raise even more discussion than Web3.0 vs. Web2.0. In order to realize that, people from all industries, all regions, and all ages, should know DAOs. Only then can universal adoption take place which leads us to the mission of HelloDAO.

HelloDAO’s Mission

HelloDAO is the evangelist of DAO by creating portals, bootcamps, and infrastructure of DAO for the grand public.

To achieve this mission, we have three tasks: First we create a portal with the information of existing DAOs for the public who does not have a background in crypto or blockchain. Second, we educate people from all industries so that they know how to operate or work in a DAO just like they know how to operate or work in a traditional company. Third, we conduct research on the science behind DAO that facilitates the adoption of DAO in practice.

More details on the three targets:

• Information Sharing

Our first target is to build a Coinmarketcap (CMC) style website, HelloDAO.global(coming soon), for DAOs. By CMC style, we mean that it is a beginner friendly yet professional information hub for the crypto and non-crypto world. It is the best place for a non-crypto person to learn about crypto and DAOs. HelloDAO.global strives to become the portal to DAOs just as CMC to the crypto world.

• Education

It is the beginner friendly introductions of DAOs that attract the newcomers, but it’s the hands-on tutorials and guides that keep them around to learn. The education in HelloDAO emphasizes the accessibility to the non-crypto minds. We believe that the ideology of DAO could be introduced in a standalone fashion to the grand public without a blockchain background (comprehensive introductions of blockchain technology and Web3.0 components will also be included, but separately).

There is no limitation to the means of education. However, in the starting phase, we will focus on short articles and videos which are easier to follow. Later on, we will also consider other forms of education, including online lectures, symposiums, or even offline courses. The education mainly focuses on three topics: DAO, Blockchain technology, Web3.0 and tutorials.

• Research

With experienced members, we will simultaneously focus on our third goal: encouraging the world to embrace DAOs. We will bring this debate to the mainstream and make the DAO a competent choice for any organization. We will conduct research on topics like “what are the best practices of DAOs?”, “which industry does a DAO fit the most?”, “what is the core competitive advantage of a DAO compared to traditional organizations?”, etc.

Besides, research on. the science behind DAOs will be conducted, such as frameworks of DAOs, governance models, sustainable economic modes, incentive mechanisms etc. We will also provide aids and funds for the development of tools that are the product of our research ,so that they help the mass adoption of DAOs.

Values

• Boudarylessness

HelloDAO’s missions include sharing the knowledge of DAO to the grand public and educating them. In the meantime, each member of HelloDAO is also part of the grand public. Hence, members should feel free to grab any information and knowledge even if you have nothing to share (of course, we do wish you could share and be rewarded). HelloDAO will always be boudaryless for anyone with any background as long as they are curious about DAO.

• Hungriness

We believe in a bright future in which the majority of the organizations are DAOs. In that sense, it is merely the dawn of the DAO revolution and nobody can claim him/herself an expert in DAO when the DAO itself is still shaping. Until the day that DAO is mass adopted, DAO as an organization form will keep on transforming and evolving. Hence, we should never stop learning. Like Steve Jobs said, “stay hungry, stay foolish”.

• Openness

Since we are boudaryless and hungry, there is no mentor, no coach, no senior member that teaches you what a DAO is. It is encouraged that the members in HelloDAO could experience, study, and practice the DAOs by themselves. Meanwhile, we encourage them to frankly share their options and questions no matter how stupid or basic they might sound.

• Practice

We encourage the members to experience, initiate, or help building DAOs. We see it as a part of the learning process and it will be rewarded if they could share their experience and opinions about the DAO. Moreover, we are totally supportive for each member’s personal success, which is to say, we will gladly aid members with their DAOs or any projects that share the vision of HelloDAO.

Then, naturally, we encourage all members of HelloDAO to actively participate in the governance of HelloDAO as part of the practice.

Join our discord and be part of the journey! 👇

🚀🚀🚀http://discord.gg/Sq7SKZPvHx🚀🚀🚀

More details about HelloDAO? Check our Notion page:

https://www.notion.so/hellodao/HelloDAO-Homepage-adf49ce7f4694ec8a4923658cf33fa95