Opinion: Five years from now, DAOs will be the future of online communities

Online communities, those with a common interest on the Internet, can include social networks, grassroots organizations, and user communities. As a society, we are naturally sharable, so it makes sense to share ideas and interests with others online. Whether we form relationships with people directly or indirectly, communities are built. However, the way we do this is different.

In 2006, internet expert Jakob Nielsen proposed the 90-9-1 rule based on unequal participation in social media and online communities. According to Nielsen, in most online communities 90% of users are lurkers, those who observe but do not contribute, 9% of users contribute little, and only 1% contribute most.

But as the reach of online communities grew, their nature began to change. Previous eras were dominated by the relationship of users, customers and creators. But now, we're starting to see online communities take ownership of what they want to share.

Ownership and the Creator Economy

With COVID-19 forcing many of us to work from home and socially distance from loved ones, digital connectivity has played a big role in how we stay connected. For many, this has led to a greater reliance on online communities. According to a study conducted by Facebook in conjunction with the NYU Governance Lab, 77% of respondents said their most important groups operate online.

Today, we live in a world where content can be created and shared at any time. This creator economy built on human creativity, intellectual property and technology is an evolving concept. After a year of lockdown, the creator economy needs to be appreciated now more than ever. Creating an economy will play an important role as governments seek to rebuild their economies in the wake of the global coronavirus pandemic. According to Deloitte, the industry will grow by 40% by 2030, adding more than 8 million jobs.

The logical next step is to move from a sharing economy to an ownership economy. Jesse Walden, founder of Variant Fund, refers to the ownership economy as "not only created, operated and funded by individual users, but also owned by users." An example of a creator economy and an ownership economy coming together can be seen with non-fungible tokens (NFTs). NFTs enable creators to create a more intimate connection with fans while eliminating problems associated with middlemen. In this way, and thanks to the blockchain, creators have full ownership of their work and are free to copyright their creations while ensuring their authenticity. NFTs present a fantastic opportunity for creators, and it is establishing ownership of their creations.

The advent of cryptocurrencies and decentralized finance (DeFi) is helping to take online communities to the next level. Since the industry uses assets that are shared by all stakeholders, creating something in their interest, cryptocurrencies and DeFi are a natural fit. Powered by frictionless finance, the ownership economy offers new ways for real-world communities to use digital tools to create, capture and exchange value more efficiently in a virtuous circle.

The ownership economy was pioneered by Bitcoin. Bitcoin, born in 2009, proposed a new path to economic wealth using technology on a computer. By doing this, anyone with an internet connection is incentivized to mine newly minted bitcoins, thereby helping to secure the network while placing an ownership claim on the network itself.

Since then, the crypto market has grown exponentially, and online communities have been seen through new tools and incentive designs, making up the trend known today as Decentralized Autonomous Organizations (DAOs).

DAO Online Community

DAOs are essentially programmable human organizations formed around a shared mission and fostering an emerging online community. Together they control an encrypted multi-signature wallet, ensuring that its goals (as determined by the DAO members) are achieved. The governance and operation of the DAO is written in smart contracts, consisting of automated if-then statements, making it transparent and auditable.

The great thing about DAOs and their role in online communities is that the way they interact with each other is a broad surface area where there is a lot of work going on. Anyone can participate in a DAO, no matter where they are located. All it takes is funding, which creates a great basis for engaging with the community. DAOs are not walled gardens, so their participants have intrinsic and extrinsic incentives to collaborate with other DAO communities to empower each other while sharing ownership and direction of each project. Without the hindrance of a central party, everyone has the right to have a say in how something should be done or how it should be done.

DAOs and DAO2DAO collaborations are still largely "a crypto-like thing," but the true power of positive change comes when the methods, ownership models, and tools created by this movement reach real-world communities large and small It's them.

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