What DAOs Can Do: Social Movement Or Playground? Rethinking 2021

Will 2022 be the year of DAOs? 2021 was certainly a blazing start.

The blockchain-related explosive and disruptive innovations seem to come from a shared ontological hunger: that deeper side of the human being that urges us to fill in the void that makes us so different from other animals species.

Spoiler alert: the void cannot be filled.

But trying –creating, innovating, going against the system, etc– to make something with it is what keeps us moving, conscious, and alive. The opposite is to become purposeless zombies that do exactly everything they’re told to do.

What You Should Know About DAOs

So, Daos. Smart contracts, decentralization, collectively finding an alternative to the traditional structures: 3 big guys on top and thousands of workers who cannot be part of major decisions inside the environment they dedicate their lives to. Basically most corporations.

2021 was a blooming year for Web3, DeFi, the metaverse, NFTs, and DAOs. It has all started to go mainstream. It’s getting big, it’s everywhere. But there’s so much happening so soon that the bigger picture of these innovations doesn’t have a defined shape yet.

Nevertheless, it’s important to approach the urge that lays behind everything that’s exploding around us, because it’s likely about to become part of everyone’s life.

So what are DAOs? Decentralized Autonomous Organizations, right, but that didn’t tell you much.

“They represent a fundamental shift in the ways humans coordinate”, explained Spencer Graham, project lead of DaoHaus. He suspects many future companies and organizations will be organized as DAOs.

He also noted that “decentralized” is probably the most important word in there. Nowadays most of these groups focus on distributing an organization’s power amongst the members of a group in order to make decisions and changes: no guy on top.

They introduce the possibility to achieve collective goals without needing to trust everyone on the team –because they simply cannot corrupt the process, and trust relies on the algorithm as the only intermediary– or an external legal framework to keep things on track.

The governance of DAOs works to take every vote into account. Nothing will get executed if there’s not enough quorum. You don’t need to be wary of people cheating in the ballots. Imagine presidential elections being that clear.

2021 In Review

Heads up: I’m not about to list trendy blockchain organizations. Let’s talk about what’s happening.

DAOs are getting harder to define. Firstly, they are a tool for coordination. But if we get into the details, there are so many types of DAOs.

Variations depend mostly on the goals: what are they using the organization for?

DAOs could replace big entities and give the small guys a chance to compete against venture capitalism. They could also be an investment club, people pooling money because they have the same financial goal.

Primarily, in crypto, I think most people are either trying to make money, create something of value, or both. All options are respectable.

The people inside a DAO probably couldn’t achieve their goals individually. So people need people.

Really, People need people.

At this point, we’ve all become a little bit too cynical to believe it, but it’s true.

When you truly observe how the most important sides of crypto move –the ones that can directly have an effect on society–, it becomes an unavoidable reality that we need each other to achieve the greater goals.

In 2021 we had a DAO who tried –and almost achieved– to buy one of the rarest copies of the constitution. Their effort became so valuable and popular that other DAOs were born to buy things like a Jodorowsky’s Dune Manuscript, and even try to purchase an NBA team.

It might sound geeky, but it’s also touching how people are finding ways to access things they could never dream of before –and stick it to the establishment.

It’s also important to note that 2021 was also full of despair. People are tired of oppressive and toxic workspaces.

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The Problem?

The passion that these organizations have, hoping to fix big systemic, institutional issues, sounds great and encouraging, but passion always has a dangerous side. There are worries about smart contracts and DAOs: could they be a scam? Can the reliance on smart contracts become problematic for companies’ decision-making?

In some cases, information has been withheld from the community and public, which beats the purpose of decentralization and puts some organizations in question. In 2021, we also saw that some DAOs can be wolves in sheep’s clothes. Why? We’ll dig into that in the second part of this article.

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