Why It Is Time To Take DAOs Seriously

Decentralized Autonomous Organizations are going to be a vital part of our future. Each day we see how little control we have. GoFundMe is the latest example of how 3rd parties are in control.

A natural solution to this situation is a front end (or multiple front ends) that use donations via cryptocurrency. Here we can see how this will find its target since the incoming contributions cannot be stopped while the outgoing takes place according to the code set forth. It is similar to the Decentralized Hive Fund which has money disbursement based upon the voting of the community. The payouts are handle autonomously meaning the only way to alter it is through changing the base code.

So far we see a few examples of how this can work, although there was a bit more human involvement.

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ConstitutionDAO

The best example was the ConstitutionDAO project which raised over $40 million to buy an original print of the United States Constitution. For a variety of reasons, the project failed in its quest. However, it did show the potential for targeted fund raising that could happen in a short period of time.

Now we see AssangeDAO which has amassed $41 million in Ethereum so far. The goal of this is to help free Wikileaks founder Julian Assange through legal defense.

The aim of the crowdfund is to bid in an online auction for an NFT collection called Censored, which was created by Pak in partnership with Assange. The proceeds from the sale will go to Assange’s legal fund and increasing public awareness on his case. Contributors to the DAO will receive governance tokens with the ticker symbol JUSTICE, which will be used to vote on key decisions affecting the DAO.

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These are just a couple of examples where money is available through cryptocurrency. This pot of resources is only going to grow as those involved in cryptocurrency see the value of the entire spectrum increase. Ultimately we are going to be talking about tens of trillions of dollars that people will have.

Changing the world requires more than just money. It might be the starting point since money is how power is acquired and wielded. Nevertheless, there are other layers which enter the picture.

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Artificial Intelligence

Many fear artificial intelligence and all that goes along with it. While part of that stems from The Terminator scenario spelled out by Hollywood, others simply have a more practical hesitation.

Whether this technology will destroy humanity or not is up for debate. What is fairly certain is the fact that it will hinder jobs while also making governments and corporations even more powerful. After all, so far this technology concentrates upon killing people more efficiently, selling people more stuff, and watching over the move of a population. Very little is being done to push the tenets of freedom.

DAOs can alter this a great deal. To start, it will help to decentralize the use of AI. This is the concept behind a project like SingularityNet. We also can see how a DAO will enable us to spread the ownership of AI systems out. Instead of being in the hands of a few major corporations or governments, individuals can own a piece of what is taking place.

Since we are rapidly heading down this path, giving control over these systems to a few people at the top of these entities might not be the smartest move.

Of course, DAOS are also a way to bring different software applications together for a specific purpose. These organization can be created around assets owned by different individuals. When placed in a DAO, depending upon the structure, the benefits can be shared among them or anyone else involved.

Could this be the best structure for Artificial General Intelligence when (if) it is developed? This is something to consider. AGI agents tied to a DAO would be much preferred than in the hands of, say, the United States military.

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Transforming Work

The corporation is the overriding business structure for the past 150 years. For the most part, people go to work for a company which provides them with a paycheck. Over the years, this created the battle between labor and management. This is a process that still continues to this day.

A couple decades back, we saw the term gig economy start to appear. As software platforms were designed, companies were able to unload their employees, instead opting to hire them on an "as need basis". The best example is Uber which replaced the traditional cab driver for a model where people were paid when needed. The software coordinated the distribution of the fares, providing a new model.

We saw this same thing happen in many different industries.

While the promotion of the idea was strong, the reality was far different. Many found the benefits touted were not there. One of the main reasons is the business structure did not change. It was still a top-down approach.

DAOs opt for a horizontal model. Anyone can be involved and have a say in what takes place (as long as they have stake). Thus, those who are actually doing the work have the ability to participate in the proceeds. Here again, Uber is basically a 3rd party that takes a piece of each transaction simply for bringing riders together with drivers. If that was done by an autonomous organization, more of the money would be available for those involved in the actual transaction.

In addition to this, we could see a lot more people receiving compensation from DAOs. Even if they are not part of the token holders, specialized skills will always be needed. For example, perhaps the DAO needs some software coding done. This can be "hired" out to someone on a spec basis. Those with these skills might find themselves moving from DAO to do, essentially doing freelance work.

Is Hive A DAO?

Since the exact definition of a DAO does not exist, it is hard to decipher what exactly qualifies. At this point, we are transitioning, hence designing everything as we go along.

It is said that Bitcoin is the first DAO. This makes sense and something that many can agree with. Nobody runs Bitcoin. The system conducts transactions every second of the day without any human intervention. No humans are needed to keep the system going. It is fully autonomous.

At the same time, if one miner shuts down, the system still operates. Other computers are online vying for the right to validate transactions. The incentive system is fully coded into the software, thus no decisions are made there.

Anyone is free to join, either as a contributor in the operation or through the utility offered. Either can be done without permission.

Hive operates on a similar premise. Anyone is free to step up a Witness server. At the same time, getting an account along with some minimal Hive Power allows for posting to the blockchain. Nobody can stop an individual from doing that or closing down the account.

Computers run the blockchain. Again, we see the coding in the software dictating how things operate. Nobody controls that once it is released. When there is consensus, whatever is in the software is run.

As long as there are servers online, Hive is guaranteed to keep running. Transactions can flow every second of the day, regardless of what humans are doing. This is a 24/7/365 situation.

There are many aspects to Hive that are not autonomous. This is especially true when we get to the second layer. That is where we see the existing model implemented. Perhaps this is always the case although it is an interesting thought experiment to consider the DAO concept applied to the second layer.

Is it possible? In some instances it might be. Of course, there might be valid reasons for keeping the second layer filled with standard business structures. Ultimately, we might find there is a combination of the two based upon need.

For example, a company might be the most efficient manner to approach things. Thus, when that is the primary motive, we will see this employed. However, there are a lot of organizations that can be subject to attack. In this instance, perhaps safety and security are more important. Here we can see how a DAO reduces the risk and helps to eliminate points of vulnerability.

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Enhanced Funding

Consider this idea: HiveMovieDAO.

We know there is discussion about getting a movie made based upon the hostile takeover attempt by Justin Sun which resulted in the forking into what is now Hive. This is in the works, something that many in the community feel is important.

Through the DHF, this can be funded via the development money that is available. While this is a valid way of approaching things, how about we, as a mental exercise, consider making it a DAO.

How would this look? To start, it is a project about Hive. Hence, we should presume that those holding Hive, the community, should benefit. For this reason, we could allocate 50% of the tokens to existing Hive holders. This could be done based upon stake, providing a certain correlation based upon each token held.

The other half could be for fundraising purposes. Those tokens are distributed by the DAO based upon the financial contributions one makes. The token allocation could be established based upon the amount of money required to get the project to completion.

Is this the best way to go? Perhaps not. However, it does show the potential of what can be done. The "ownership" of the film would be in the hands of the Hive community with those who contribute the financial resources having a larger stake. If the DAO is a profitable venture, the income could be distributed based upon the token holdings. Of course, if it is just something that people feel is fun to do and a glorified marketing piece, then it is similar to ConstitutionDAO.

Either way, we can see how the business structure changes completely. Perhaps there comes a point where someone might want to license the project. This would then be decided by the community.

Here is where we see the DHF enter. That could be, with a slight adaption, turned into a place where non-financial voting takes place. In other words, the voting mechanism is there yet it is tied to the allocation of resources for the DHF. This could be expanded where non-funding voting occurs.

As we can see, we are dealing with some very powerful tools. With some innovation and creativity, we are able to tie them into NFTs, fundraising, governance, and a host of other features that can enhance the service that is offered.

It is time to start taking the concept of DAOs seriously and looking for ways to implement them. We are dealing with something that will help to radically transform the future.

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