What is the narrative value of The DAO?

A rising market cares more about the narrative value, and the actual value will often be gradually discovered in one cycle or multiple cycles. In this cycle, we have tracked many hot spots, from DeFi, public chain and NFT to Web3.0, GameFi and SocialFi, and more people have begun to pay attention to the construction of Web3.0 ecology. Therefore, as a firm cornerstone in the Web3.0 world, "DAO" has also become the next hot spot that people are chasing.

So, what is the narrative value of The DAO?

event

In order to better understand DAO, we can first look at two events related to DAO.

The first has to do with the US Constitution auction. With the funds raised, ConstitutionDAO hopes to participate in a copy of the U.S. Constitution being auctioned at Sotheby's. The document is one of 13 surviving copies of the original 500 copies made for the Constitutional Convention. Unfortunately, ConstitutionDAO failed the competition and the DAO organization was disbanded.

The second thing has to do with EOS. On December 8, the 17 masternodes of the EOS network passed and implemented a proposal, the content of which was "stop releasing 68 million EOS tokens in the Block.one account", which means that 6% of the total circulation of EOS has been Mandatory lockup. The secondary market quickly expressed support for the proposal of the EOS community - the price of EOS rose by 10% in a short time. And EOS has also been praised by the community and the outside world as "more and more like a DAO".

Fundamentals

After reading the examples, let's talk about the fundamentals of DAO.

If you look at it literally, DAO is "Decentralized Autonomous Organization". Although its description is concrete, its meaning is abstract. In order to understand it better, let's take it apart:

decentralized

Decentralization means that the entire community is not made by a centralized high-level decision-maker, but by stakeholders who vote. Every member of DAO will become an ecological Builder, not a Trader, and everyone will work towards the same goal. This is also the most attractive point of DAO - all participants are ecological builders and enjoyers of ecological dividends. Decentralization represents fairness.

autonomy

Autonomy, we can understand it as the autonomy of the community. Through smart contracts, DAO supports users to run applications written by smart contracts on publicly accessible blockchains. As long as the conditions set by the most stakeholders are met, relevant proposals and actions can be automatically triggered.

question

Web3.0 is a brand-new Internet system that highlights the power "owned" by participants, and DAO is the foundation of its ownership and creator economy. The charm of DAO even made "old money" like Sequoia briefly change its Twitter profile to "We help the daring buidl legendary DAOs from idea to token airdrops. LFG".

However, although the idea is good and the vision is good, there are still many problems in DAO.

infrastructure

First of all, if we have experienced DAOs and DAO creation tools that already exist on the market, we will find that what DAOs can do is very limited. This is due to the weak infrastructure.

Since Web3.0 and DAO are still in the early stages of development, they cannot meet the complex autonomy needs of community members and are applied in various complex scenarios. At present, there is not enough imagination left for DAO, which is mainly used in some primary scenarios or the governance of some protocols-many protocols will put "governance" in their own token application scenarios.

At the same time, the existence of hackers also makes people's exploration of DAO a little bit. In 2016, The DAO was hacked, and a total of 3.6 million Ethereum was stolen in more than 200 attacks. Due to the locking of funds by the smart contract, the Ethereum community decided to recover the loss through a hard fork within 28 days of the lock.

collaboration cost

The second is the high cost of collaboration. Although we just mentioned that many protocols have started DAO-like voting decisions, due to organizational structure issues, sufficient time must be given to community members for each vote. The more community members, the higher the cost of collaboration, which is also the weakness of decentralization.

Perhaps this is also the reason for the emergence of many progressive DAOs. The semi-centralized and semi-decentralized form makes its operating mode change. All members vote on key decisions, and other decisions are made by trusted centralized small groups, that is, power center execution. Therefore, although DAO is a process of decentralization, it does not mean that DAO has achieved complete decentralization, and the power center still exists.

talents

Finally, there is the issue of talent.

Although many talented people have poured into the construction tide of the Web3.0 world, this is still a very small group.

In "DAO is Dao, Very DAO", Mia Bao mentioned that DAO can be divided into the following seven categories:

Infrastructure, providing a series of one-stop services and tools for DAO;

Asset management DAO, a DAO aimed at asset management and asset investment;

Governance DAO and aggregator, DAO where users participate in voting governance;

Yield DAO, a DAO that jointly earns DeFi income after pooling assets;

Guild, Guild Governance DAO, and YGG are good examples—cooperate with players to participate in Play2Earn through governance DAO;

Creator&Media DAO, a creator DAO that maximizes personal influence;

DAO Adapter uses DAO as a composable module in the Web3.0 system for various protocols.

Although we can subdivide DAOs into many types, they all have a common feature—all DAOs are composed of power centers and power decentralization.

The power center is generally composed of programmable personnel, who are generally the founders and main contributors of DAO, and participate in the complex decision-making of DAO. The process of decentralization will touch all DAO participants, and becoming a DAO participant is often related to the holding of fungible tokens and non-fungible tokens. The more you hold, the more right you have to speak, and DAO participants will determine the overall direction of DAO.

But in order to ensure the decentralization of the organization, the power of DAO must be "liquid". In other words, a change in the membership of the power center is necessary.

A good example is SushiSwap's appointment of Maki. We can see from the dispute in SushiSwap DAO that the power flow did not happen, and Maki, who made outstanding contributions to Sushi, was easily kicked out of the management. As commented by @0xTodd, a partner of Nothing Research: "If you think that DAO—or emphatically speaking, "DAO today" is a more advanced management model, then it should not appear very low-level and counter-intuitive. matter. "

The power center's desire for power will lead to a reduction in power mobility, so that talented people cannot quickly pour into the DAO ecology and the construction of the Web3.0 world, unless they have enough capital to hold enough voice, or Be the founding team of a new DAO. This is actually the self-protection of power. The future DAO and the current progressive DAO need to solve the problem of how to implement and constrain power flow and decentralization in order to solve the talent problem.

narrative value

Going back to the narrative value we mentioned initially.

"Value" can be understood from the perspective of economics, sociology or linguistics. When measuring the value of an object, we not only try to determine what other people might be willing to exchange for it, but we also consider the value others place on it in a social context.

DAO embodies more the value from the perspective of sociology. Of course, this value also comes from the future. Just like people expecting the metaverse, people expect DAO to bring a more fair and transparent organizational model to the society. management issues.

"Everyone has power, power belongs to everyone" is the goal of DAO, so it is also the narrative value of DAO. However, before the advent of the Web3.0 world, DAO still has a long way to go.

Reference content:

"DAO is Dao, Very DAO" https://mp.weixin.qq.com/s/QxzNGChEmFEUqOcPzRh8Qw

"Blind Man Touching "DAO"" https://mp.weixin.qq.com/s/-r8XYCssmlKaMIJrHojZ_g

"The Current Situation of DAO | DAO Ecology from the Integration of Community Construction, Governance and Off-Chain World" https://theblockbeats.info/news/28087?search=1

"DAO Talk: From Sushi to EOS, from People to Sequoia" https://theblockbeats.info/news/28036?search=1

"Governance as a Source of Value" https://boardroom.mirror.xyz/r_puxIhiNRMAdVwGt_Yht2pykpSjb0bp9dVWFdcU-DE