# DAOs: Revolutionizing Ownership and Governance in Web3
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Chapter 1: The Current State of Companies
In a recent Twitter discussion, I outlined the effective strategies that Web3 platforms for creators will adopt to succeed. However, it’s crucial to recognize that Web3 is set to fundamentally alter the incentives not just for creators, but for the broader economy as well.
Companies Have Their Flaws
It's quite simple to point fingers at corporations. Numerous companies engage in practices that are less than admirable. They may:
- Pay their employees poorly while rewarding shareholders handsomely.
- Utilize planned obsolescence to exploit the market.
- Lobby politicians to enact favorable laws that grant them unfair advantages.
Yet, it's essential to remember that these are not necessarily malevolent individuals. Business owners are merely navigating a system designed for profit. As we transition into adulthood, we often confront a harsh reality: life is not about enhancing the world or cherishing family time. Instead, it revolves around working harder, generating more income, and boosting GDP.
This notion is deeply embedded in our society, often unspoken but evident in everything from our media consumption to how we monetize our pastimes. It’s an invisible doctrine shaping much of today’s behavior.
Company Values and Missions
In programming, lists start at zero, which can be confusing for beginners who expect them to begin at one. Company values follow a similar pattern. Their top priority might be promoting healthier eating or developing innovative technologies. However, the underlying value—often hidden—is profit. This fundamental principle supersedes all others and is the driving force behind their actions.
Food is not produced solely to nourish people, houses aren't constructed merely for shelter, and medicines aren’t created just to heal. These products exist primarily to generate revenue, leading to chaos in the long run.
Class Division
There's an inherent divide between company owners and workers/consumers:
- Owners aim to maximize profits, minimize wages, and deliver the lowest possible quality products.
- Workers strive for better pay while working as little as possible.
- Consumers desire the highest quality at the lowest cost.
Often, the most dedicated employees benefit their employers more than themselves, while the most passionate consumers inadvertently support shareholders without any stake in the company. The divide is fortified by a metaphorical wall, constructed from exclusive agreements, investor regulations, and dubious stock practices.
This situation reflects the flawed game we're all part of, which favors the affluent while leaving the disadvantaged with little to rely on. Fortunately, Web3 is here to introduce a better alternative.
DAOs: Bridging the Divide
DAOs (Decentralized Autonomous Organizations) offer the unique opportunity for anyone to contribute. If you resonate with a DAO's mission, you can easily join their Discord channel and lend your support.
DAOs dismantle the barriers of ownership and create pathways for individuals to transition from being mere workers or consumers to becoming owners. Rather than possessing shares in a company, you own a portion of the protocol. This shift means you are no longer just an employee; you're cultivating ownership in something you believe in. DAOs represent a significant leap forward.
DAOs Outperform Traditional Companies
To grasp the shortcomings of traditional companies, consider the most exemplary case: Apple. By almost any metric, Apple is a premier company—boasting a visionary founder, strong branding, and innovative products, valued at over $2 trillion. They successfully coordinate workers to produce outstanding products, resulting in substantial profits and satisfied customers. At first glance, it seems like a win-win scenario.
However, a significant issue remains: the chasm between employees/consumers and owners. Even at a prestigious company like Apple, being an employee carries a certain cachet, yet it pales in comparison to holding an executive position or being a majority shareholder.
As a devoted Apple customer, you may feel deeply invested in the brand, yet you are merely supporting shareholders without any real influence. The entire purpose of the company's mission, branding, and product quality is to generate revenue. Unfortunately, your enthusiasm for the brand does not afford you any meaningful way to contribute.
This is where DAOs come into play.
The DAO Framework
The most effective DAOs focus less on profit-making and more on a mission-driven approach. If a DAO were to publicly declare its sole interest in profit, it would likely see its members flee. The DAOs that thrive will be those whose actions align with their stated missions, not just corporate jargon.
The Positive Feedback Loop of DAOs
DAOs are poised for exponential growth, not only because they offer ownership opportunities but also due to a compelling positive feedback loop.
Excited Outsiders
People outside the DAO become aware of its initiatives. For example, consider a DAO that aims to elect Andrew Yang as president. While it seems ambitious, if they make tangible progress, media outlets will take note.
Contributions
Individuals will begin to contribute in various ways—whether through partnerships, development, or content creation. Each contribution draws the DAO closer to its goals, and this momentum attracts even more interest.
This cycle continues: progress begets interest, which leads to more contributions, creating a beautiful and transformative loop that has the potential to reshape our world.
By the People, For the People
A prime example of DAO success is constitutionDAO, which aimed to purchase an original copy of the U.S. Constitution at a Sotheby's auction. Contributors would share ownership of this historic document. Though the initiative ultimately fell short when outbid, the mere fact that it raised $40 million and garnered significant support illustrates a shift in public perception.
We are no longer just enthusiasts playing with internet currencies; we have the capacity to mobilize substantial resources and people in a decentralized manner. If we believe in our potential, we can change the world.
Final Reflections
It’s easy to criticize corporations and their owners for their questionable actions. However, merely tearing them down doesn’t lead to meaningful change. To truly improve the world, we must create better systems rather than just targeting the wrongdoers. Reforming incentives is the way forward, and DAOs are positioned to lead this charge.
If you found this discussion insightful, consider subscribing for more thought-provoking content about the Crypto Creator Economy.
Chapter 2: Understanding DAOs
In this chapter, we delve deeper into what DAOs are and how they function within the Web3 ecosystem.
Video Title: DAOs in Crypto: Everything You Need to Know about Decentralized Autonomous Organizations (ICP)
Description: This video provides a comprehensive overview of DAOs, explaining their purpose, structure, and impact on the cryptocurrency landscape.
Chapter 3: The Future of Governance
What does the rise of DAOs mean for traditional governance structures?
Video Title: DAOs Explained: The End of Traditional Governance? Pros & Cons | Part 1
Description: This video explores the implications of DAOs on governance, discussing the advantages and drawbacks of decentralized decision-making processes.