Web3 – Decentralized Autonomous What?

What’s a…. DAO?

You can think of most decentralized autonomous organizations or DAOs like any modern remote company.

There’s typically no offices.

Team members work from all over the world.

They use lots of the same tools to get stuff done – Slack, Notion, Google Docs, Github, Zoom, etc.

They look like “normal” businesses.

But then when you dig in, they often have a twist. Like LinksDAO. They’re buying a golf course (normal) but are funding the purchase by selling NFTs as membership passes (less normal).

Or SeedClub. They’re a traditional startup accelerator… except they incubate other DAOs. And each DAO that goes through their program owns equity (tokens) in each other.

Yea… SeedClub is kinda meta.

There’s also DAOs that look nothing like a normal business. Like ConstitutionDAO. It was created to buy a copy of the US constitution at a Sotheby’s auction.

Wait. What?

They raised an astonishing $47M in a matter of days (though they were later outbid).

DAOs get a little more interesting too when you take a look at how decisions are made, who contributes labor, and how those contributors are compensated.

Proposals and bounties ​DAOs typically have a few core members (think founders or early employees) and a mix of part-time and full-time contributors.

When a DAO needs to build something new a proposal is created. Often they include a bounty to incentivize others to work on it.

For example, a DAO might put out a proposal to have a new feature built for its app and offer a $5,000 bounty (paid in an equivalent cryptocurrency).

Proposals can be created by core members, contributors, or even the wider community. And proposals are then typically voted on and approved before the bounty is funded.

You can check out some real proposals from different DAOs on Snapshot right now. 👀

So just about anyone can contribute. Work is compensated in crypto.

Oh yea – and people love voting on things.

A small detour – shared wallets

​One novel element in most DAOs is the use of a shared wallet. Sometimes referred to as a multi-signature or multisig wallet, or more broadly, the DAOs treasury.

A shared wallet makes is easy to pool funds quickly.

Ya know, in case you and some internet friends wanna pool together a couple mil to buy a copy of the constitution. 😁

But a killer feature of shared wallets is that you can require multiple peoples’ signatures or even a majority vote before any funds are dispersed (in case buying an expensive piece of paper isn’t an approved use of funds).

And since a DAO’s funds (the shared wallet) are stored on the blockchain:

Now, I have no idea who brands these things 🙈

​Suffice to say, don’t take the acronym DAO too literally.

​I think DAOs could help us shape how we think about it. Here’s three ideas:

Here’s your takeaway:

​Decentralized autonomous organizations are much a modern remote company and embrace shared wallets, cryptocurrencies, and async work.

They kind of feel like internet-native organizations.

And they’re making it easier for groups of internet friends to join forces and tackle some really interesting ideas.