Blockchain and Future of Work
for Venture Investors and Builders
- We should be awake to the potential for a technological shift comparable to the adoption of the internet as roughly one in 20 venture investments in 2021 went to crypto startups
- Blockchain is helping to reduce the transaction costs that plague the labor markets, namely search costs, coordination costs, and contracting costs
- The most attractive whitespace appears to be helping digital organizations improve governance and limit coordination costs, especially with a growing need to toggle between impact and financial motives
- Emerging themes and use cases across the future of work technology category: (i) decentralized identity and user-controlled data is foundational to new ways of work, (ii) online marketplaces may evolve into communities of co-creation and co-ownership, (iii) talent networks could lead to unbundling of firms and improved resource allocation, (iv) peer-to-peer blockchain transactions may remove the need for HR intermediaries, and (v) there is a new opportunity to optimize community capital versus human capital
- Crypto allows access to x-to-earn income streams, including play-to-earn, which may have the best chance of triggering broad adoption (and may even lead society into the metaverse)
- Technology-enabled industries may be disrupted first as decentralized autonomous organizations (DAOs) and crypto networks begin competing with traditional corporations
- Industries requiring more physical world interactions may experience less disruption initially but see an accelerated transition to an unbundled elastic workforce of freelancers
- The use of tokens in web3 transforms the dynamic between founders, talent, investors, vendors, customers, and other key stakeholders
- Venture capital is among the industries beginning to see DAOs as competition with the potential for DAOs and tokens to disrupt the existing business model
A Central Question — Blockchain and Future of Work
The following research seeks to answer: What is the potential of blockchain technology on the future of work from the perspective of a venture investor and builder? The analysis herein is not about speculative cryptocurrency trading but rather the potential use cases for the underlying technology within the sector known as Future of Work. Technology that enables the future of work is closely related to the WorkTech and HR Tech industry verticals, spanning talent acquisition, talent management, and collaboration and productivity tools, among other areas.
A challenge with upskilling oneself in this emerging field is that venture investors and builders have authored much of the relevant content. There is less thoughtful input from the disinterested and skeptical camp. I also bring bias from my interest in the space. Nevertheless, I will attempt a balanced approach through a critical lens to evaluate various value propositions, market trends, business models, valuation considerations, and the tradeoffs of leveraging this new technology.
A Central Problem — Human Capital Inefficiency
My macro investment thesis coming into this deep dive is that human capital is one of the most inefficient forms of capital. As Andy Spence, author of the Workforce Futurist newsletter notes in his blockchain research, the frictions plaguing labor markets include search costs (finding the right talent), coordination costs (getting people to collaborate efficiently), and contracting costs (negotiating labor at each stage of production).¹ As a thought experiment, it seems obvious that the world is far from a perfect workforce arrangement where everyone willing to trade their time for money is located at the optimal juncture of interests, skills, and business needs. Moreover, growing awareness of diversity, equity, and inclusion (DE&I), employee wellness, and other issues indicate we are far from maximizing human capital potential.
Instead of the ideal labor force configuration, we see record numbers of workers quitting (or Great Resignation) combined with all-time highs for job openings. Eric Ries, the author of The Lean Startup and The Startup Way, writes in the forward for the book Secrets of Sand Hill Road that possibly for the first time, given too much money chasing too few ventures, we are talent-constrained instead of financial capital-constrained.²
As a baseline, let us take human capital inefficiency due to high transaction costs as the broadly defined problem. While we explore use cases for blockchain, we should also consider the best way to solve the problem agnostic of technology. Blockchain may not always be the best tool for the job, even though startups will inevitably attempt to use blockchain in all sorts of ways.
Section 1: Setting the Stage
Yet another obstacle in this field is the degree to which topics can quickly turn technical. It can be relatively straightforward for non-techies to see how payments may be faster and more secure using blockchain but making another leap about the technology’s potential becomes too abstract. We will start at the beginning with the hopes of keeping the material accessible.
1.1 Blockchain and Bitcoin — Shared Databases and Internet Money
Blockchain is referred to as the internet of value with the potential to “complete the internet.” The internet enables people to send and receive information without centralized intermediation. However, absent blockchain, an intermediary is still needed to transfer assets online.
The first use case of the blockchain was Bitcoin (BTC). The release of the Bitcoin whitepaper in 2008 introduced the world to the possibility of trustless peer-to-peer asset transfers without centralized intermediation. For simplification purposes, Bitcoin can be thought of as internet money. Blockchain can be thought of as an immutable shared database (or ledger) for all users to maintain and approve transactions rather than a third party with the database. The innovation linked computer science applications related to cryptography with economic incentives.
1.2 Ethereum and New L1s — Shared Databases with Macros
The Ethereum whitepaper in 2013 expanded on the initial concepts to propose a general-purpose blockchain to be leveraged for use cases beyond a native currency for the internet. Vitalik Buterin, Ethereum co-founder, described the previously cited simple shared database as now able to run macros, formally known as smart contracts or decentralized applications.³ Since Ethereum allows users to write code and store data, it is sometimes called the world computer, a virtual computer that runs on a network of physical computers. Note, new virtual computers (or layer one) blockchains, which underlie the more user-facing products, have been developed recently, such as Solana and Polkadot. For now, Ethereum remains the largest developer ecosystem.
1.3 Enter Capital Allocators — Probably Not Nothing
Flash forward to 2022, and while many still see distributed ledger technology as a solution in search of a problem, the more than decade-old innovation is starting to find product-market fit in areas such as internet finance, known as decentralized finance (DeFi), and digital art collecting. As retail and institutional investors have sought to diversify their portfolios with highly volatile yet less correlated assets, the total market capitalization of all cryptocurrencies has grown too large to ignore, roughly 2% of the global equity market capitalization of around $100 trillion.⁴
According to Galaxy Digital Research, venture capitalists invested over $33 billion into crypto startups in 2021, more than all the previous years combined. Investments in startups using blockchain represented almost 5% of venture capital deployed in 2021. Andreessen Horowitz closed a $2.2 billion crypto fund in June 2021, only to be topped by Paradigm, who closed a $2.5 billion crypto fund in November 2021.⁵ Even Sequoia Capital, regularly viewed as the venture capital industry’s best in class, indicated that around 20% of its investments over the past year have been for crypto startups.⁶ These statistics show the dam may have broken and that the space is likely to accelerate its development with the injection of funding from sophisticated investors. Moreover, many crypto projects bootstrap their development by launching their own tokens, meaning they may not be fully captured in the venture capital figures.
Section 2: Unpacking the Jargon
Crypto startup pitch decks and related materials may be filled with new lingo. To ensure we are talking about the same concepts, let us start by defining and unpacking these ambiguous terms. There is much debate about these interrelated words, and their meanings are still evolving.
2.1 Web3 — A New Nickname for the Web Trio
Chris Dixon, general partner at Andreessen Horowitz, defines web3 as “an internet owned by users and builders orchestrated with tokens.” So-called web1 was built on top of the internet around 1990 with an experience like how you read a magazine. Web2 appeared around 2005 and enabled users to both read and write. Apple, Meta/Facebook, and other Big Tech companies emerged as easy-to-use centralized platforms. Using blockchain, web3 claims to be the next iteration of the web, enabling users to read, write, and own. Tokens are the mechanism by which ownership can be given to users and builders. The internet is debatably the most significant invention of the century, and web3 is about how money and power flow on the internet.⁷
A common example of the potential of web3 is to consider Uber without a centralized headquarters. Drivers and riders could own the Uber network with the value accruing to the users, rather than a company, proportionate to their value creation. Tokens are used to incentivize engagement and for the control and governance of the system. A similar theoretical analysis could be run for LinkedIn and other web2 companies that are extracting value from the network. Web3 advocates say the community of users are now the decision-makers rather than the product.
Web3 projects tend to be decentralized with open-source sharing of code. Entities may start with a headquarters or central research and development team, as with Bitcoin and Ethereum, but can progressively decentralize over time. Projects are considered fully decentralized when they are owned and controlled by a broad and representative community. The system becomes more censorship-resistant and immune to interference (or single points of failure), including from those who wrote the software. It is comparable to how an entity can outlive its founders in web2 but takes it a step further by dissolving the sense of a headquarters. Web3 projects regularly achieve decentralization by airdropping tokens to their users, often along with ownership and governance rights once the organization is up and running.
Not everyone is buying the narrative that web3 will overtake the tech giants of web2. Jack Dorsey, former CEO and co-founder of Twitter and current CEO of Block, claimed that venture capitalists and their investors or limited partners (LPs) own web3 and that web3 is a centralized entity with a different label.⁸ Signal founder Moxie Marlinspike has similarly been vocal that web3 is more centralized than most people realize.⁹ Scott Galloway, professor at NYU Stern, points out that 2% of accounts (or roughly 2m accounts) own 95% of all Bitcoin.¹⁰ ¹¹ Note, as Packy McCormick points out in his Not Boring newsletter, where he offers a web3 debate rebuttal, Glassnode Insights lowers the estimate to 2% of entities control 71.5% of all Bitcoin after adjusting for factors such as exchange addresses holding funds from millions of users.¹² ¹³
Critics of web3 argue that most people prefer aggregation, convenience, and ease of use more than ownership and decentralization.¹⁴ For example, customers appreciate Google’s exceptional search and Amazon’s excellent logistics. Web3 skeptics may also point out that, for example, users of Uber could become shareholders with ownership and governance rights by purchasing the publicly traded stock. However, unlike tokens in web3, Uber is not giving away their shares for using the platform. Indeed, there are tradeoffs, and web3 has serious complexities to overcome yet to provide a superior offering to the most successful web2 companies.
There is a gray area between web2 and purely decentralized token-based web3 organizations. Many web2 companies, who have not issued a token, are experimenting with blockchain technology, and they could even launch a token in the future. Notably, Facebook’s crypto project Diem was the highest-profile attempt at launching a token by a web2 company.¹⁵ Coinbase, the largest US crypto exchange, operates like a traditional public company, whereas Binance, the largest crypto exchange globally, is also a centralized entity but has issued a token. Another type of hybrid web2 and web3 organization is a decentralized entity without a token.¹⁶
2.2 DAOs — Reorganizing the Internet into Economic Communities
Decentralized autonomous organizations, fitting squarely within the web3 classification, are a method for communities to coordinate financial and human resources online to co-create value. A DAO is set up to run by smart contracts on the blockchain, where the community that owns its tokens is responsible for proposing new ideas and voting on changes like a board meeting. A similar design in the physical realm is a co-op, a member-owned and controlled business operating for the benefit of its members.¹⁷ A DAO lives on the internet, but the community relies on hiring core contributors to perform activities that the automation cannot complete.¹⁸ Chris Dixon has eloquently articulated DAOs as “an internet community with a balance sheet.”¹⁹
The first DAO, known as The DAO, was an investor-directed venture capital fund launched in 2016. However, a hack soon shut down the project and led to a split (or hard fork) of the Ethereum blockchain. DAOs, which are relatively easy to spin up, are now appearing all over for purposes of providing education (e.g., RabbitHole), managing a stablecoin (e.g., MakerDAO), maintaining an exchange (e.g., UniSwap), and many other use cases.²⁰ ConstitutionDAO made headlines last year for raising over $40 million in an attempt to purchase a copy of the US constitution. Since blockchains and associated applications are usually permissionless, anyone with an internet connection and some money can find and join DAOs without authorization from an intermediary. Naturally, I joined a DAO aiming to buy a golf course (LinksDAO).
Coinbase made the following prediction for 2022: “More people will join DAOs, prompting a change in definition of employment — never receiving a formal offer letter, accepting tokens instead of or along with fixed salaries, and working in multiple DAO projects at the same time. DAOs will also confront new challenges in terms of figuring out how to do M&A, run payroll and benefits, and coordinate activities in larger and larger organizations.”²¹
2.3 NFTs — Not by the Same Token
We often take for granted that you can own objects in the physical world, but until NFTs, there were essentially no property rights for unique digital goods. NFTs are cryptocurrencies like Bitcoin and Ethereum, except they are unique, also known as non-fungible. Bitcoins are fungible because you would be indifferent between them. Conversely, each NFT is different and may hold different values. The Mona Lisa painting is an example of a non-fungible asset but in the physical world. Owning the original Mona Lisa would not be the same as picking up a copy from the Louvre gift shop. Transactions involving NFTs are likewise verified and recorded on-chain.²²
The first NFT was minted on the Ethereum blockchain in 2014.²³ NFT sales took off in 2021, with a transaction volume of approximately $25 billion compared to $340 million in 2020.²⁴ Since NFTs extend beyond finance and into popular culture, they have captured mainstream attention and become the gateway for many to experience crypto for the first time. While the general public may view NFTs as a new static art form, they are becoming dynamic digital assets that are transforming the business model of the gaming industry. Additionally, NFTs are beginning to merge with DeFi for applications that include fractionalization of NFTs and using NFTs as collateral to unlock more liquidity.²⁵ While there is some resistance to the hyper-financialization of art and gaming, the programmable and interactive nature of NFTs opens the door to another level of innovation that is not available with tangible goods.
2.4 Metaverse — Trapped in the 3D Web3
There are many definitions of the metaverse and views about Big Tech’s role in its future. The word seems to cause unnecessary confusion. At times, the metaverse is defined as a virtual environment where people live, work, and play.²⁶ In my view, the metaverse is the concept of a continued merging of the digital and physical worlds as more of life becomes technology-enabled. Even today, we may throw in our headphones and essentially connect ourselves into the computer for a day of video calls, except possibly unplugging for a walk outside in “meet space,” where we are accompanied by our cell phone. As technology continues to improve, graphics look even more realistic, and screen time trends ever higher, the employee experience will inevitably look and feel much different. 3D avatars and spatial audio within Microsoft Teams and Meta’s Horizon Workrooms are early examples of where virtual offices and meetings may be headed.
Augmented reality (AR), virtual reality (VR), and blockchain will enable the metaverse. Jensen Huang, CEO of Nvidia, described the internet as a 2D medium and the metaverse, or what Nvidia refers to as the omniverse, as a 3D medium.²⁷ If taken together with web3, DAOs, and NFTs, we now have a 3D medium filled with economically linked tribes, digital scarcity, and property rights, with interoperability to bring your compatible assets from world to world. Arguably, Big Tech appears to have more of a role in developing hardware needed for the metaverse, which may be more challenging for web3 projects to organize. From personal experience, Meta’s Oculus Quest 2 is impressively immersive. Besides minor motion sickness, the technology can dramatically enhance the feeling of presence versus Zoom calls. Perhaps AR and VR will be to web3 as mobile phones were to web2. Yet, others believe VR headsets may become niche entertainment systems. Similar to corporations subsidizing Blackberries, businesses and schools could prompt the adoption and normalization of eyewear.²⁸
2.5 X-to-Earn — Self-Driving Money in the Wild
Through the use of tokens, it is becoming easier to not only spend money on the internet but make money on the internet. At a fundamental level, people can either make money from their labor or from their capital. New business models are emerging to reward users for their time and value-added contributions to online communities, serving as additional income streams.
Play-to-earn (P2E) is simply the concept of profiting from playing games. Gamers have historically spent money on in-game items, such as weapons and armor, but have generally not made money. By making these in-game items NFTs, players can now see the digital asset history and trade them with other players. Moreover, there is continued experimentation around in-game monetary policy to incentivize users toward positive actions, such as attracting and assisting new players.²⁹ The real promise ties back to the metaverse in a sort of game of life with interoperability. If the value can flow freely from one game to the next best game and back to real-world markets, these in-game economies have the potential to balloon in size.
NFTs are enabling a two-way mixing of the digital and physical worlds with a convergence of collecting, gaming, socializing, and investing.³⁰ A compelling idea is that P2E gaming could propel society into the metaverse with widespread crypto adoption. Early versions of virtual worlds, such as Decentraland and Axie Infinity, are exploding in popularity. Notably, many people in the Philippines have found they can earn more by playing Axie Infinity than working local jobs.³¹ These P2E games continue to blur the boundaries between work and play.³²
Learn-to-earn (L2E) is where users are paid for completing tutorials and tasks related to a product rather than traditional advertising hacking your time. RabbitHole has allowed me to learn how to use new applications with the potential to earn tokens from on-chain activity.
Contribute-to-earn can include claiming bounties by completing defined tasks. While DAOs are generally still not a reliable income source, Keloverse is a platform for freelancers to discover open work opportunities with web3 startups and DAOs, including aggregating various bounties.
Stephen McKeon, partner at Collab+Currency, has pointed out other emerging models are create-to-earn, judge-to-earn, and participate-to-earn.³³ Likewise, I recently switched to the Brave browser, adding a new token-based income stream for opting into viewing advertisements.
Section 3: Emerging Themes and Use Cases
3.1 Decentralized Identity — Reimagining the Resume with User-Controlled Data
One of the first use cases envisioned for blockchain other than payments was a self-sovereign identity (SSI), where individuals can control their digital identity and records. In the web2 world, digital identities are imperfectly fragmented across various applications, and each application builds a database of personal user information. It is possible for platforms like Twitter to de-platform users and effectively remove that part of their digital identity. Using the same mental model about blockchains, we can imagine how instead of application-controlled data, a network of users could maintain a shared ledger of personal data with each individual deciding which elements to keep private or share with other users. For example, passwords could be stored privately, medical data could be shared with an insurer, and specific browsing history could be monetized. Users would control their level of anonymity and the privacy of their data.³⁴ We can similarly think about cryptocurrencies as more data, which informs ownership on the blockchain.
In the context of the future of work, this means individuals could manage their career data, including references, ratings, psychometrics, criminal record, learning badges, and payroll data, which could then be ported between organizations. In the web3 world, you could include on-chain activity, such as skills earned on RabbitHole, bounties claimed on Keloverse, NFTs issued for attending events via the Proof of Attendance Protocol (PAOP), the number of votes within a community using tools like Snapshot, and achievements earned in a game. Online identities could become extensions of crypto wallets or digital passports anchored on the blockchain.
SSI for careers has advantages for background checks and reference checks. Startups, such as Veremark, are working on pre-employee screening via the blockchain to allow data that has not and will not change to be checked only once, driving lower costs, better candidate experience, and faster time-to-hire.³⁵ Same as there is no need to recheck prior Bitcoin transactions because of the blockchain’s resistance to tampering, each new organization would not need to check that you went to university.³⁶ Therefore, original documents would only need to be produced for the first verification. Over time, eliminating repetitive confirmation of off-chain data points may prove more valuable with increased job switching in the gig economy and DAO landscape.
These solutions offer HR professionals the ability to store and validate data without exposing personally identifiable information (PII). The ability to disclose data in a privacy-preserving and secure manner is consistent with the spirit of data privacy laws and may limit exposure to data breaches. Finally, there is the potential for improved data integrity compared to self-reported resumes and LinkedIn profiles, reducing hiring risks. An estimated 80% of applicants admit to lying on their resumes.³⁶ Employers can rely on non-transferrable verifiable credentials, or better yet, verifiable contributions, eliminating some level of bias and discrimination from the process.
As talent would prefer to have control over their career data and employers could more easily verify candidates, decentralized identity appears to be driving down transaction costs. Some challenges include aligning on a standard of credentials across many companies, workers with fewer skills not buying into the system, and verification of subjective data that could consist of assessing an individual’s working style and personality.¹ It may also be more challenging to run workforce analytics when the organization does not control the census data. A final complexity is that web3 applications offer the opportunity for pseudonymity where users do have a consistent identity, but it may be separate from a physical world identity or other digital world identities.³⁷
There are many possible applications for what can be built on top of a shared database of personal data beyond the future of work. For example, reputations, such as a credit score, could be abstracted from the data for use in property rental and undercollateralized DeFi lending. Proving who you are in the digital universe could offer you special access rights and unlock DAO governance systems beyond one vote per token.³⁸ Metaverse fans see possibilities related to experiential learning and gamification where users carry decentralized identities across worlds and communities.³⁹ Finally, it is worth keeping an eye on the emerging field of zero-knowledge proofs, which holds the promise of verification without revealing any information.
3.2 Creator Platforms — A New Flourishing in the Community Economy
While decentralized identity and user-controlled data are foundational to a new era of work, platforms enabling create-to-earn may be the category that has seen the most development and greatest adoption to date. The creator economy allows artists, photographers, musicians, writers, designers, and other creatives to leverage technology to earn revenue from their creative passions. Creators initially welcomed web2 platforms, such as YouTube, Instagram, and Spotify, to help them monetize and broadcast their work. However, now that blockchain allows the peer-to-peer transfer of digital assets, solutions are emerging to connect creators directly to their audience without the need for centralized platforms that extract revenue.
Li Jin, co-founder and general partner at Variant, describes creators on web2 platforms as building their businesses on rented land. While platforms such as TikTok are beginning to allow top creators to monetize, creators do not have a say in decision-making around revenue sharing. Web3 creator platforms are enabling what has been coined the ownership economy, where users can own the creative digital goods and a share of the creative platforms. Li Jin takes this a step further with the idea of a community economy, articulating a future that is less about creators and fans and more about a community of co-creators and co-owners. As creative platforms are increasingly being structured as DAOs, users can become beneficiaries of more of the value they create. In theory, practically everyone on the internet can profit from their contributions (contribute-to-earn), even if users are driving value back to a community with activities as simple as liking social media comments.⁴⁰
A well-known example of a creator platform is venture-backed OpenSea, the largest NFT marketplace, recently valued at $13.3 billion only four years after being founded.⁴¹ However, even though OpenSea uses blockchain to complete transactions, it is still a centralized entity that can freeze assets and profits from a 2.5% transaction fee. LooksRare is a new web3 competitor that is redistributing the trading fees collected by the protocol to token holders. Another example is Mirror DAO, which allows users to create publications on the blockchain. Publishers can turn posts into NFTs and split proceeds across contributors. Additionally, Audius is a DAO where users can earn tokens for uploading music and curating playlists.⁴²
An optimistic take is that society may be at the onset of a new flourishing of creative work as creatives can receive closer to true market prices and more people turn hobbies into businesses. NFTs add liquidity and price discovery from top fans for scarce ownership while keeping creative works universally accessible. New platforms can allow creators to capture a buyer’s full willingness to pay in a way not available with, for example, a fixed-price Spotify subscription.⁴³ We are also seeing new markets, such as NFTs for poetry.⁴⁴ Platforms will continue to improve their discovery feeds, galleries, analytics, and social layer. We could even see a merging of marketplaces and metaverse for 3D NFTs like in-game cosmetics for avatars.⁴⁵
Web2 players can be effective for online services and offline goods but fall short with digital goods. For example, Etsy is a profitable business model for customized tangible gifts. However, buyers of digital goods would not be able to prove ownership of an original copy and would not participate in the potential upside. On the other side of the market, sellers may also prefer a user-owned version where they have visibility into decision making and could opt for permanently low take rates since they would effectively be charging themselves. Note, web2 companies like TikTok and Spotify could conceivably incorporate NFT marketplace functionality, possibly through acquisition, as a competitive response to allow for more creator monetization.
3.3 Talent Networks — Unbundling of Firms and Improved Resource Allocation
A freelancer is an independent worker who typically completes short-term projects with more flexibility in terms of hours, location, and rates. Freelancers are expected to become the majority of the US workforce by 2027.⁴⁶ In a related trend, many large organizations are already on a path to decentralization with leaner distributed teams that tap into a broader network of resources, sometimes called an elastic workforce.⁴⁷ Upwork and Fiverr are two of the most popular web2 freelancing platforms for connecting talent with jobs, charging up to 20% transaction fees.
Web3 freelancing marketplaces are using the same playbook as creator platforms. Namely, traditional marketplaces may evolve into communities of co-creation and co-ownership. The new platforms are owned and governed by the users with lower transaction fees. If both sides of the marketplace are better off, the new business model can succeed. Talent prefers little or no transaction fees and may appreciate a say in how the platform is run. Companies may also prefer more governance rights and are likely to follow the talent, especially with labor shortages.
Braintrust, which calls itself a user-owned talent network, is an example of a decentralized freelancing marketplace focused on IT workers. Braintrust recently announced a token sale of $100 million, led by Coatue Management and Tiger Global Management. In full disclosure, and in the spirit of learning by doing, I also scooped up a few tokens on Coinbase after spending time analyzing the business model. The platform has no transaction fees for talent and awards users in Braintrust tokens for activities such as vetting candidates and referring other talent.⁴⁸
One of the benefits of web3 platforms like Braintrust is its ability to keep customer acquisition costs (CAC) below traditional models. Instead of advertising spend or cash-based referral bonuses, referrals can be rewarded with ownership via tokens. Tokenomics are the supply and demand rules for how tokens are distributed, how they are used, and how value accrues to them. The mechanism designs essentially program human behavior with economic incentives. If the tokenomics of a scaling game are structured correctly, the positive impact of jumpstarting network effects can drive the token value higher and offset the inflationary effect from increasing token supply.⁴⁹
As credential validation improves and employers post more complex and valuable projects to talent matching platforms, we could potentially see an unbundling of some firms. Consultants and lawyers, who are currently willing to earn far less than their billing rates, may find they can source meaningful projects and access specialist resources without the backing of a large brand.⁵⁰ As a transition phase, we may see knowledge workers try out freelancing as a side hustle. However, if jobs are reduced to projects, organizations will need to consider the importance of shared context to complete tasks and factor freelancers, or teams of freelancers, into their culture.
Talent Protocol is another innovative example of a decentralized platform aiming to use blockchain to minimize high search costs that serve as the foundation of the recruitment industry. There is a trend to tokenize everything, so why not yourself, like a stock market for talent. The platform could become something like LinkedIn for web3 where instead of connecting with people, participants invest in each other’s tokens. Investors on the platform can support undiscovered talent and be rewarded as they grow. Talent who may be seeking sponsorship and awareness can build a support network around themselves. As with the merging of creators and collectors into a community economy, over time, the vision is to move from the distinct roles of supporters and talents to a community of network members.⁵¹ ⁵² I recently joined the beta version of the platform as a supporter and have started creating a portfolio of talents.
Decentralized professional networks can potentially allow users to level up from recreational discussion to resource allocation.⁵³ In a competitive talent market, these innovations could help source the right people at the right time with lower transaction fees. However, as social media struggles with harassment, misinformation, and censorship versus freedom of speech, these communities will also need to establish policies to self-manage their communication channels.
3.4 HR Intermediaries — Blockchain Eats the Middleman
As discussed, blockchain and smart contracts can enable two parties to conduct business without an intermediary. Yet, the current state of work is filled with intermediaries. HR is no exception, including recruiters, payroll providers, applicant tracking system (ATS) vendors, time and expense (T&E) software providers, and learning management system (LMS) vendors. We have explored how decentralized identity is currently rooted in intermediaries. We have also seen the potential to modernize the process for background and reference checks. Finally, we examined how creator platforms, freelancer marketplaces (or other job boards and internal labor marketplaces), and professional networks could morph from intermediaries into communities of co-creation and co-ownership. While centralized entities deliver varying degrees of value, web3 generally seeks to disrupt the intermediaries that extract more value than they provide.
Skeuomorphism is a term sometimes used to describe replicating an existing activity with new technology. A typical example is how we initially experienced the internet, like reading a magazine in web1. However, after a few years, we were searching and interacting with the content in a way not previously possible.¹⁹ Similarly, of course, we can use crypto to compensate talent globally. Mayors and football stars are already making headlines for being paid in the form of Bitcoin ownership rather than salaries. Note, since crypto may be too volatile for the majority of workers as a primary source of income, other solutions are emerging to immediately convert to legal tender backed by a government or central bank (fiat currency) or use cryptocurrencies that attempt to peg their market value to the US dollar (stablecoins). After moving from cutting a physical check every two weeks to biweekly direct deposits, there is an opportunity to rethink incentive structures and x-to-earn payment schemes in a way that is not skeuomorphic.
Superfluid is an on-chain asset streaming protocol for salaries, rewards, and subscriptions. The technology creates a perpetual financial connection between accounts to enable the trickling of funds. For example, recurring payments of $0.01 per second can be pushed to individuals and DAOs. Transaction fees (or gas fees) on the underlying blockchain are only paid when opening a stream or adjusting the agreement terms. Workers are paid immediately with less administrative burden from employers. New use cases include redirecting payments streams from an employer to subscription services. The extreme capital efficiency means there is no money locked up before sending with less capital at risk in case of a flaw in the code. Additionally, DeFi protocols are building on top of Superfluid in a way not possible with legacy payroll systems.⁵⁴
Another use case is in the learning and development field with user-controlled and portable training credentials. The need for formal degrees that signal talent potential could lose value as it becomes easier to prove successful completion of online courses and learning platforms begin to establish legitimacy with employers.³⁸ We could see another example of unbundling from centralized institutions with teachers owning their educational content and connecting more directly with learners. Once again, we are blurring the traditional two-sided marketplace roles, in this case between teachers and students. As an MBA student, it is interesting to consider the future of universities when a large part of the value is already about the network, learning from peers, and co-creating an experience with the entire community. Of course, while there already exist online courses, there is still a high value placed on shared in-person experiences.
3.5 Talent Management — Optimizing Community Capital vs. Human Capital
Even if we live to see firms pulled apart and HR intermediaries eliminated, there will still be a need for HR leadership and tools. A new era of community leadership can develop focused on optimizing collaboration and communication across networks toward a shared purpose. HR functions may have much to offer the crypto community around organizational design, total rewards design, and performance management to attract, motivate, and retain workers more effectively. However, many investors and builders overlook and dismiss anything remotely related to HR due to a perceived lack of strategic importance.
In this new ecosystem, web3 companies and DAOs have continued to rely on web2 tools. For example, DAOs build transparently in the open, regularly using platforms such as Discord for collaboration and GitHub for software development. Going forward, we can expect to see more web2 conducting business with web3 and even more web3-to-web3 relationships. As a result, we may see DAOs end up being the early adopters of much of the new future of work technology. Note, web3-to-web3 business transactions could take the form of an exchange of one another’s tokens, whereas web2 companies would not exchange shares in the ordinary course of business. Unless tokens are converted immediately, a token exchange could reframe a fiat currency-based transaction as a partnership with reciprocal investment.
The DAO tooling landscape overlaps with previously discussed use cases to support individuals and self-organizing teams with identity, access, reputation, compensation, and governance.⁵⁵ However, employee benefits are often a reservation to becoming an independent contractor or self-sovereign worker. Opolis calls itself a digital employment cooperative or employment DAO with the long-term vision of becoming a public utility infrastructure of employment globally. The member-owned and operated organization offers digital freelancers the ability to tether into traditional employment systems, including payroll, healthcare, disability insurance, workers’ compensation insurance, retirement savings, and other compliance and shared services.⁵⁶
Many in the space see improvements in governance for these ongoing DAO experiments as one of the most significant gaps in the landscape. Web3 is exceptional at capital formation but tends to fall down with governance as networks grow larger and more decentralized. As with the web2 versus web3 debate, skeptics argue that all types of entities, from school districts to public companies, have adopted a representative model for governance because it is more effective than a pure democracy and does not require constant voting.¹⁰ DAOs, without a CEO and traditional organizational hierarchy, may respond that they are still learning the most effective methods for self-governance and developing the associated tools for voting and collaboration. Further, direct democracy may be less prone to polarization and corruption. DAO supporters would prefer to rely on the wisdom of the crowd over a product management team at a Big Tech company.
Until better methods are created to optimize decision-making in leaderless talent-centric networks, employer-centric entities often appear to be the superior governance structure and may have lower coordination costs. The coordination problem may be complicated for impact-informed organizations that need to navigate simultaneous social and economic goals. Especially as more businesses align with the environmental, social, and governance (ESG) movement, prospective builders may consider the whitespace of helping digital organizations improve governance and coordination.
Section 4: Investment Considerations
4.1 Level and Rate of Adoption — Skeptics, Hopefuls, and Enthusiasts Disagree
It is not enough to spot the emerging trends and use cases in venture capital, as you also must be right about the timing of adoption for specific ventures. Suppose the record-breaking venture capital deployment in 2021 can provide an indication of the timing for blockchain to capture major market share. In that case, venture capitalists tend to have a five-to-ten-year time horizon before they need to exit investments and return funds to their LPs.
Crypto skeptics, hopefuls, and enthusiasts can find common ground on the existence of some legitimate use cases for blockchain, but they disagree on the level and rate of adoption. While crypto already has more than 60 private companies valued at over $1 billion (or unicorns) with a vibrant ecosystem of up-and-coming innovations, these emerging themes will take time to be realized.⁵⁷ Moreover, individual teams and tokens are likely to be unsuccessful given the high failure rate in entrepreneurship. For comparison with web2, Facebook was founded in 2004, went public and reached one billion monthly active users in 2012, and still adds an estimated 500,000 new user accounts each day.⁵⁸ Of course, Facebook’s early competitors, Myspace and Friendster, were not long-term successes. Due to the composability of blockchains that is often likened to Lego blocks where open-source applications plug into one another and developers can copy sections of existing code, there is an argument that the rate of innovation will be faster than with web2. The potential for even sharper exponential growth for technological advancement with fewer resources wasted in competition can be difficult to project out.
At present, blockchain is still not the most user-friendly technology, including the risk of losing private keys required to access a crypto wallet, resulting in a permanent loss for users who self-custody their assets without the support of a bank or centralized crypto exchange. Yet, we should keep in mind that the investor focus and creative energy surrounding crypto is often for what the industry could become versus what it represents today.
Individuals and organizations generally care about whether a product or service is better, faster, and cheaper, and they will adopt it if that is the case. Many startups such as Veremark are already leading with their offering’s benefits without mentioning the underlying blockchain technology in the marketing materials.³⁵ As the technology matures over several years, more organizations will use blockchain as part of their offering and interact with it as a matter of business operations. Organizations and individuals will likely become increasingly more comfortable with exposure to digital assets. However, especially for future of work technology, the HR functions of large enterprises are less likely to take the risk early on than nimble startups.
Crypto is a new asset class, but like the internet, it has the potential to impact all other asset classes and even spawn new industries.³⁰ Regarding resistance to adoption, a key difference from the internet revolution is that crypto is on a collision course with the current corporate model, especially the banking system, which is embedded in the status quo of work. While adoption of the internet required a mindset change and harmed companies like Blockbuster and Borders, it largely improved ways of working for most long-standing enterprises.
Some say crypto used to just be crypto, but there is too much activity to keep up with everything in more recent times. As a result, crypto is segmenting into classifications, which are beginning to see varying levels and rates of adoption. Similar to classification systems used for traditional asset classes, CoinDesk Indices introduced one possible framework, known as the Digital Asset Classification Standard (DACS).⁵⁹ Another possible framework offered by Sparkline Capital is shown below, for which future of work technology mainly fits under infrastructure (developer tools) and media and entertainment (creator tools).⁶⁰
Technology-enabled industries may continue to be disrupted first as digital organizations begin competing with existing corporations. As we explored, finance, media, arts, professional services, education, and gaming are among the most exposed areas. Fields requiring more physical world interactions, such as healthcare and manufacturing, may experience less disruption initially until we see a more profound blending of the physical and digital worlds. However, with enhanced infrastructure for freelancers that drives down the search, contracting, and coordination costs, we could see an accelerated transition to leaner teams tapping into an elastic workforce. The trend could be amplified by increased remote work and the ongoing war on talent. Meanwhile, decentralized identity and user-controlled data are relevant for all sectors.
For now, crypto appears to lack diversity and be doing more to make the rich even richer, including venture capitalists. However, blockchain can theoretically grow the total addressable market of all applications by supporting the underbanked and unbanked populations in emerging markets with mobile phones but no access to savings and credit. Payroll and exchange solutions may also have a financial wellness component to teach financial literacy via crypto.
4.2 Coin Tables — Equity Stake vs. Token Purchase
In addition to sector and industry, one of the first decision points for an investor is whether the startup uses tokens now, plans to use tokens in the future, or never intends to use tokens. Some venture funds may not currently have the appropriate legal or operational structure in place to invest in tokens or the support from their LPs, but they can invest in startups that use traditional equity, such as OpenSea. Venture-backed crypto firms are likely to eventually enter the public markets to join Coinbase and crypto-adjacent companies like Robinhood and PayPal.⁵ Meanwhile, venture firms are implementing new structures to purchase tokens, participate in voting and governance, and even earn yields on tokens by engaging with the DeFi ecosystem.
As discussed, there is a new concept of airdropping tokens and progressively decentralizing as an alternative to accepting additional venture funding or implementing a monetization strategy that may stifle growth. The organization can reduce dependency on the core team and encourage community participation over time. However, early-stage crypto startups often still need funding to get off the ground when unproven. Venture capital funds can help web2 founders transition to web3 and help find developer resources to scale. Moreover, venture capital funds can help build successful businesses, not only place bets, by providing strategic advice, making introductions across the portfolio, and adding in-house technical expertise that wraps around the founders.
Per Jesse Walden in a16z’s Crypto Startup School, after a few rounds of traditional venture capital funding, assuming there is an active user base, founders and investors can access the public markets and effectively exit to a community with tokens. They recognize diluting themselves will make the network more robust and, therefore, their remaining share of the organization more valuable.⁶¹ Networks that value decentralization would generally not accept individual founders or venture firms retaining more than single-digit ownership. Early customers feel like they are helping build the product and can participate in the upside in a way comparable to early employees receiving stock options.⁶² Progressive decentralization is seen as less speculative than the initial coin offering (ICO) boom of 2017, where coins were issued for crowdfunding while the project was still in the idea phase.
At a high level, one approach is for venture funds to structure their early equity investments with options for future tokens. They may make use of an arrangement known as a simple agreement for future tokens (SAFT). There can be lock-up periods for investments in tokens, possibly at a discounted price, after which venture investors may sell the vested tokens to realize returns for their LPs, thereby further decentralizing the projects. Note, in the short term, investors dumping a large quantity of vested tokens may drag down the price. A new model may mean fewer late-stage venture rounds, a more straightforward and faster path to a liquidity event versus traditional IPO or strategic sale, and possibly different calculus around the need for scalability.
4.3 Capital Allocators — Future of Work vs. Future of Investing
Given venture capital firms could be considered intermediaries, we should explore whether smart contracts are coming for the future of work or the future of investing first. There is a tension between the ethos of decentralization in crypto and the historically limited set of gatekeepers providing the funding. Consistent with the idea of a community economy, investing is becoming more community-driven. People are already investing together with joint (or multi-signature) wallets, and startups are receiving funding from DAOs. Venture capital-focused DAOs are appearing on the scene, and organizations like SyndicateDAO are building tools for legal and compliance support. Groups of accredited investors can purchase startup equity, while other groups are co-owning NFTs and cryptocurrencies with fewer limitations.⁶³ Note, transparency in open-source projects alters the standard data request and due diligence process.
Even without DAOs, as part of the larger trend of more people accessing the private markets through angel investing and crowdfunding, tokens enable more retail investors to access early-stage opportunities. As private markets become more public, we are also seeing an unbundling of the firm in venture capital, with more corporate venture capital (CVC), such as from large crypto exchanges, solo capitalists, and celebrity investors. Also, general partners (GPs) are building personal brands on social media that are distinct from their firms.⁶⁴ As a related idea, given the relatively easier path to exit with tokens, crypto venture funds and crypto hedge funds could potentially begin to look more alike. Hedge funds tend to have a more active trading style with greater flexibility in the fund structure for LPs to subscribe and redeem their investments.⁶⁵
Additionally, early-stage crypto startups may prefer not to raise venture funding. As an alternative to airdropping and ICOs, another standard fundraising model for crypto startups today is listing on a decentralized exchange (DEX), known as an initial DEX offering (IDO). Subject to securities regulations, builders could even consider raising a seed round by issuing NFTs to community members. There may also be funding available through various DAO treasury grants and layer one platform-specific incubators and accelerators.
While blockchain has the potential to transform the roughly 70-year-old modern venture industry, open-minded capital allocators may be able to change with it, including possibly creating DAOs and even becoming DAOs themselves. For now, venture funds with experience building organizations, collaborating with regulators, and scaling teams still have plenty of value to offer above and beyond their capital. Also, LPs would still prefer to park their money with traditional funds that leverage their relationships and research teams for the best deal flow. Nevertheless, investors are beginning to adapt to a different role, including leaning in to participate in communities.
The use of tokens in web3 transforms the dynamic between founders, talent, investors, customers, and other key stakeholders. Ideally, tokens can help to align incentives across these parties better. Tokenomics can incentivize investors to participate in the network to maintain their ownership stake.⁶¹ To that end, there are open questions around the future of term sheets with special provisions for investors. While doubters may question the motives of venture capitalists to game the platform somehow or use their audience to hype up specific tokens, the reality is that their reputation will remain of critical importance. Venture funds may now find themselves pitching to DAOs, who will then vote to let them join the capitalization table (or coin table). GPs do not want to earn a reputation for doing wrong by communities.
4.4 Valuation Considerations — Relationships, Roadmaps, and Relative Valuation
In various ways, venture investing in web3 is similar to web2. Especially in early-stage deals, there is a continued focus on the quality and experience of the team and advisors, product development roadmap, market trends, business model, evidence of market traction, strategic fit with the fund, and generally, an indication that the asset has the potential to generate significantly more value in the future. But there are differences, too, related to valuation assumptions, competition, scalability, cost structure, and other risks.
While some intrinsic valuation frameworks exist, including taking into account network size, supply scarcity determined by the token monetary policy, and layer in the stack (application versus underlying protocol), the leading approach appears to be relative valuation. Bitcoin is often compared to gold as a store of value. Ethereum, and its native token, ether (ETH), is often compared to the global money supply.³⁰ For other projects, we could conduct a comparable company analysis but considering new web3 on-chain data and community-focused metrics, including the number and quality of exchange listings, the number of unique token holders, the number of developers and frequency of source code modifications, and community member retention and engagement on social media and other community tools.¹⁶ As with valuing traditional companies, the value is only worth what someone is willing to pay for it based on the expectations for future dividends and value appreciation. Especially with crypto, it can be challenging to distinguish the value from the stage in the market cycle.⁶⁶
When evaluating a crypto startup, a differing consideration is how it will achieve a sustained competitive advantage, given the competitive leakage when building in the open where anyone can copy the code. In web3, creating a defensible moat with switching costs is about community and brand building rather than siloed data and code. Additionally, tokens can become embedded in the broader crypto ecosystem. Even so, the decentralized and open-source nature drives a mindset more of value creation than value capture relative to web2. Individuals are more likely to work on multiple projects rather than being prevented from working with competitors. Yet, there remains a looming question about the ability of the incumbent web2 players to embrace web3 and leverage their existing brand to successfully compete with web3 native companies.
Venture investors often look for deals that can produce 5–10x returns, with the chance for a home run of 20x, 50x, or even 100x. As with any portfolio, diversification lowers volatility and reduces the risk of missing out on home runs. As Kai Wu from Sparkline Capital writes, there may be a greater opportunity in small-cap tokens as most crypto fund analysts cover the top coins but cannot cover the entire 8,000+ token universe, of which 600 have market capitalizations over $50 million. Note, over 5,400 tokens were added in 2021 alone.⁶⁰
In order to achieve the rapid scaling for a home run, traditional venture-backed startups see high cash burn with increased labor costs and marketing spending. For web3, smart contracts ideally automate more of the process, and a community often supports small, geographically distributed core contributor teams. Additionally, business-to-consumer (B2C) web3 startups are moving away from advertising to creating collective value to achieve network effects, as shown with RabbitHole and Braintrust. Even without directly rewarding referrals or using airdrops to generate excitement, a token can serve to align incentives between internal and external talent, who will be indirectly rewarded with the token appreciation for helping to spread the word (or meme). While venture-backed future of work technology has historically been dominated by business-to-business (B2B) use cases due to the unit economics, tokens enable more B2C use cases without the users being the product.⁵⁶ By contrast, B2B startups involving web2 may not be ready to benefit from transacting with tokens.
Other aspects to factor into valuation include community risk, platform risk, security risk, and, as detailed in the following section, regulatory risk. Regarding community, early-stage investors should understand the organization’s initial mission and values before it becomes challenging to hold a fully decentralized network accountable to its roadmap. Accountability could be especially challenging in the case of anonymous founders. For platform risk, applications could consider the country they build in the same way they do the blockchain they build on, with dependencies related to fees, transaction speeds, scalability, security, and future design changes. Finally, given the value flowing through the applications, there are also application-specific security risks from errors in the code or weaknesses in other facets of the organization.
4.5 Regulatory Considerations — Investor Protection vs. Innovation Protection
While I am far from being in a position to offer legal advice (or financial advice), investors may consider a valuation discount for regulatory risk varying by jurisdiction and nature of the product or service. Vitalik Buterin has said governments will not be able to prevent blockchains from existing, but they can marginalize the crypto industry by discouraging on-ramps from fiat currency.⁶⁷ Note, regulations are more easily enforced on centralized platforms such as centralized crypto exchanges. Naval Ravikant, former co-founder and CEO of AngelList, pointed out that soon, the internet and crypto may be so intertwined that you cannot turn off crypto without stunting the internet.¹⁹ In the current state, some of the value from crypto undoubtedly comes from regulatory freedom, but regulation is still far from equilibrium.
At a high level, there are several relevant regulatory agencies in the US, with the most focus on the Securities and Exchange Commission (SEC). The following four-part Howey Test, which was drafted long before crypto, is often cited to determine whether a token is considered a security: (i) an investment of money, (ii) in a common enterprise, (iii) with an expectation of profit, (iv) solely from the effort of others. There appears to be significant uncertainty around how these four factors apply to any given project’s unique circumstances. Based on my preliminary research, if the token is used to raise early-stage funds and the token value is dependent on the success of the founding team, there is likely to be more risk. Gaming NFTs may be more aligned with utility tokens. Note, being deemed a security comes with additional disclosure rules, and it may be less likely for the token to be listed on exchanges. Startups need to consider the tradeoffs to optimize for legal compliance.⁶⁸ There are additional considerations for treating DAO tokens as securities with ownership rights over revenue generated versus only governance rights, where Wyoming is the only US state to recognize DAOs legally.¹⁵
Investors and builders tend to think more about what could go right, whereas regulators think more about what could go wrong. Additionally, government regulators may be motivated by maintaining centralized power. For now, regulators have generally been policing the clearly bad actors and appear to be most focused on stablecoins, gambling tokens, privacy tokens, and DeFi. Non-accredited investors continue to have the freedom to essentially build a portfolio of startups using NFTs and cryptocurrencies. In March 2022, President Biden signed an executive order, which was generally well-received by the crypto community, calling on government agencies to study digital assets across six priorities: (i) consumer and investor protection, (ii) financial stability, (iii) illicit finance, (iv) US leadership in the global financial system and economic competitiveness, (v) financial inclusion, and (vi) responsible innovation.⁶⁹
The push for regulations may stem from crypto’s negative image, likely due to high-profile hacks and scams (or rug pulls) and ties to the Silk Road and other darknet markets. There is commonly an absence of anti-money laundering (AML) and know-your-customer (KYC) procedures in decentralized crypto protocols, which are present in other areas of business. There is also a poor perception of the carbon footprint for specific blockchain designs, such as Bitcoin. Although, new tokens are primarily using more energy-efficient consensus mechanisms for validating transactions. Ethereum’s upcoming design change from proof-of-work to proof-of-stake consensus is expected to use 99.95% less energy.⁷⁰
Some web3 supporters argue the open-source nature of projects limits the amount of asymmetric information and believe regulators should prioritize innovation protection over investor protection. Otherwise, regulations will push founders overseas and underground. Some entrepreneurs are already reluctant to build in the US because of legal uncertainty versus so-called crypto heavens with no rules.¹⁷ Others believe more guidance will provide the necessary assurances for institutional and mass adoption.
As crypto becomes a more popular political issue and the US government weighs the fear of systematic risk versus missing out on a new wave of startups, I would offer the prediction that a free country will lean toward innovation protection. However, consistent with the national trend to legalize and tax gambling as a new source of government revenue, we can likely expect a push towards increased tax reporting. The current tax reporting process is filled with complexities, including treatment of x-to-earn income, yields on DeFi tokens, airdrops, and gas fees.
Analyzing the future of work has an inherent element of prediction, especially on topics like DAOs and metaverse. Nevertheless, blockchain appears poised to disrupt the future of work comparably to the adoption of the internet. At the risk of overstating the importance of technology, the internet has transformed the collective super-intelligent brain of humanity with information access and social networks. Now, blockchain is strengthening our shared mind by layering on optionality for value, ownership, and decentralization. AR and VR technology may further bolster the quality of our networks.
The startups mentioned are genuinely only a small sampling of the types of innovative projects underway. At the least, in a diversified venture portfolio across various industries, investors seeking the highest risk-adjusted returns should consider placing a bet on the chance of blockchain being the next major step in technological advancement. For builders, even as more talent continues to enter the field, there appears to be a great deal of whitespace.
That being said, there are reasons for caution. There are always many unknown variables, perhaps most notably for the future of work, parallel cutting-edge scientific developments in artificial intelligence with the potential for large-scale automation of knowledge worker tasks like coding. Additionally, many people anecdotally seem to enjoy the thrill of speculating on volatile assets more than the community element. Further, it is early days for DAOs, which may still be far from decentralized, autonomous, or organized. DAOs might be more about rebranding corporate talent pools as communities on the blockchain, at least in the early days. A world where web2 and web3 continue to coexist and intermingle for some time appears likely.
As illustrated above, blockchain is reducing search costs, coordination costs, and contracting costs. If transaction costs are lower, talent can realize higher total rewards, and organizations can recognize lower third-party expenses with fewer people-related risks. As society marches closer to a perfectly efficient liquid workforce, the hope is that individuals can find a set of income streams at the intersection of their passions, capabilities, and an organization’s needs. Ideally, people shift more of their time to desired activities while making a net positive contribution to society.
At the intersection of the future of work, the future of venture investing, and the future of venture building, we could consider these concepts combining to represent an investment of our time toward values and purpose-aligned communities. Overall, I am quite bullish on blockchain and future of work, but since this is not all going to happen overnight, we should aim to enjoy the current state of work, too.
A special thank you to everyone who chatted with me about this research and reviewed my early drafts. Also, the following sources were particularly helpful for informing my thinking.
- Andy Spence, “Blockchain and The Chief Human Resources Officer”, https://www.blockchainresearchinstitute.org/project/blockchain-and-the-chief-human-resources-officer/
- Eric Ries, “Secrets of Sandhill Road by Scott Kupor”
- Vitalik Buterin, “The Tim Ferriss Show #504”, https://open.spotify.com/episode/5fuiS0ZmMxuUp7kpbO0M8J?si=vRkeaLjbTwGZ9BTCmSDyuw
- Reuters, “Marketmind: Headed for $100 trillion”, https://www.reuters.com/business/headed-100-trillion-2021-11-05/
- Galaxy Digital Research, 2021: Crypto VC’s Biggest Year Ever, https://www.galaxydigital.io/post/2021-crypto-vcs-biggest-year-ever/
- Dan Primack, “Axios Pro Rata: February 17, 2022”, https://www.axios.com/newsletters/axios-pro-rata-5ac183f5-08d3-4214-89d6-17275e270b29.html
- Chris Dixon, “Bankless: 90–5 Mental Models for Web3”, https://open.spotify.com/episode/7I9omrwKQ750Uj8igTZe1j?si=Q5RhvmQlRtqiIHk89CZqsA
- Jack Dorsey, https://twitter.com/jack/status/1473139010197508098?lang=en
- Moxie Marlinspike, “My first impressions of web3”, https://moxie.org/2022/01/07/web3-first-impressions.html
- Scott Galloway, “The False Promise of Web3”, https://marker.medium.com/the-false-promise-of-web3-7e6c1a00d4be
- Buy Bitcoin Worldwide, “How Many People Own & Use Bitcoin?”, https://www.buybitcoinworldwide.com/how-many-bitcoin-users/
- Not Boring by Packy McCormick, “The Web3 Debate”, https://www.notboring.co/p/the-web3-debate?s=r
- Rafael Schultze-Kraft, “Glassnode Insights: No, Bitcoin Ownership is not Highly Concentrated — But Whales are Accumulating”, https://insights.glassnode.com/bitcoin-supply-distribution/
- Ben Thompson and John Gruber “Dithering: Web3 and Centralization”, https://open.spotify.com/episode/0aMkjQsBKtP14LQPmFV5G4?si=07fmyXqLSdehPdgMbACKGQ
- Kia Kokalitcheva, “Axios Pro Rata: The pirates are back, DAOs everywhere, Diem no more”, https://www.axios.com/newsletters/axios-pro-rata-9e1fe00a-c95e-43aa-be54-38e971c61f7d.html
- Maggie Hsu, “Go-to-Market in Web3: New Mindsets, Tactics, Metrics”, https://future.a16z.com/go-to-market-in-web3
- Ryan Sean Adams, “The Ultimate DAO Report”, https://newsletter.banklesshq.com/p/the-ultimate-dao-report?utm_source=url
- Vitalik Buterin, “DAOs, DACs, Das and More: An Income Terminology Guide”, https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-an-incomplete-terminology-guide/
- Chris Dixon and Naval Ravikant, “The Tim Ferriss Show #542”, https://open.spotify.com/episode/3U4wMKyvMUhB83qf8FaA3I?si=BCyqiEQ0RQCUNTdmVQ26VA
- Coopahtroopa, “DAO Landscape”, https://coopahtroopa.mirror.xyz/_EDyn4cs9tDoOxNGZLfKL7JjLo5rGkkEfRa_a-6VEWw
- Coinbase, “10 Predictions for Web3 and the Cryptoeconomy for 2022”, https://blog.coinbase.com/10-predictions-for-web3-and-the-cryptoeconomy-for-2022-745a20a60cd0
- Slava Malchenko, “NFT Marketplace Development: Complete Guide”, https://4irelabs.com/articles/nft-marketplace-development-guide/
- Axios, “The first-ever NFT from 2014 is on sale for $7 million plus”, https://www.axios.com/nft-sale-art-blockchain-millions-90238222-e702-4df2-a24f-1f7256ec3809.html
- Reuters, “NFT sales hit $25 billion in 2021, but growth shows signs of slowing”, https://www.reuters.com/markets/europe/nft-sales-hit-25-billion-2021-growth-shows-signs-slowing-2022-01-10/
- Bankless, “NFT Marketplace Wars”, https://open.spotify.com/episode/5IU4fARQ591G01rWWroHhs?si=-waJaEaJRBuObCUqY-VvVQ&nd=1
- Andrew Steinwold, “Into the Metaverse”, https://newsletter.banklesshq.com/p/into-the-metaverse#:~:text=In%20its%20simplest%20form%2C%20the,is%20part%20of%20the%20metaverse
- VentureBeat, “Nvidia CEO Jensen Huang weighs in on the metaverse, blockchain, and chip shortage”, https://venturebeat.com/2021/06/12/nvidia-ceo-jensen-huang-weighs-in-on-the-metaverse-blockchain-chip-shortage-arm-deal-and-competition/
- Ben Thompson and John Gruber “Dithering: More on Meta”, https://open.spotify.com/episode/4HLAK5cCJ6Hw4DWUEPssST?si=m2483hogRdW_vCOdp2Nmcw
- Josh Williams, “a16z Crypto Startup School: Opportunities for Crypto in Gaming”, https://www.youtube.com/watch?v=CBu8lLC0g8I
- Ark Invest, “Big Ideas 2022”, https://ark-invest.com/big-ideas-2022/
- Anna Wiener, “Money in the Metaverse”, https://www.newyorker.com/news/letter-from-silicon-valley/money-in-the-metaverse
- Andy Spence, “Moonlighting in the Metaverse”, https://workforcefuturist.substack.com/p/moonlighting-in-the-metaverse
- Stephen McKeon, “The Future of Work”, https://medium.com/collab-currency/the-future-of-work-5d7b47cff308
- Onchain Medley, “Decentralized Identity, the key to unlocking rapid online innovation?”, https://open.spotify.com/episode/5xSmlklwLnP46ckQLiysQj?si=E3ml9SM8TKGcPF_oX30saQ
- Veremark, https://www.veremark.com/
- Talent Tech Labs, “The Role of Blockchain in the Future of Work”, https://talenttechlabs.com/blog/latest-trends-report-blockchain-technology/
- Rex Woodbury, “Our Fluid, Multi-Faceted, Pseudonymous Digital Identities”, https://digitalnative.substack.com/p/our-fluid-multi-faceted-pseudonymous
- Hanwen Cheng, “Parachain Auctions: Litentry and Decentralized Identity”, https://open.spotify.com/episode/0kYp7bQQYwLPqlsPusJWpq?si=KZDYX6QcQNii5oIniUb0sQ
- EdSurge, “What Could Web3 Mean for Education?”, https://www.edsurge.com/news/2022-01-24-what-could-web3-mean-for-education
- Li Jin, “Bankless: The Creator Economy”, https://open.spotify.com/episode/1iA860wIdxfeZjlIDjT9DS?si=nni1G-BNSyOOr_X_PoZPdA
- The New York Times, “OpenSea valued at $13.3 billion in new round of venture funding”, https://www.nytimes.com/2022/01/04/business/opensea-13-billion-valuation-venture-funding.html
- Ben Schecter, “The Future of Work in Not Corporate — It’s DAOs and Crypto Networks”, https://future.a16z.com/the-future-of-work-daos-crypto-networks/
- Li Jin, “Bankless: 101 — The Ownership Economy”, https://open.spotify.com/episode/26us3Khilbam8lvkK3t0jo?si=i1khZYcuR_KVXc2ahA41kA
- Trevor McFedries, “Unchained: How NFT DAOs Could Shape the Next Blockbuster, Fund Poetry and Change VC — Ep. 315”, https://open.spotify.com/episode/2KC569O96wHn15VbDA39E4?si=4AipO0p8Qa6LEiNLs-t_Dw
- Eric Conner, DC Investor, and Zeneca, “Bankless: NFT Marketplace Wars | Panel”, https://open.spotify.com/episode/5IU4fARQ591G01rWWroHhs?si=dZH86sBDQl6X3jUAO2F4IA
- Upwork, “Freelancers predicted to become the U.S. workforce majority within a decade…” https://www.upwork.com/press/releases/freelancing-in-america-2017
- Andy Spence, “Unleashing The Decentralized Workforce”, https://workforcefuturist.substack.com/p/unleashing-the-decentralised-workforce
- Not Boring by Packy McCormick, “Braintrust: Fighting Capitalism with Capitalism”, https://www.notboring.co/p/braintrust-fighting-capitalism-with
- Braintrust, https://www.usebraintrust.com/whitepaper
- The Changing State of Talent Acquisition, “#45: Decentralized Talent Networks — How the Blockchain is Disrupting the Gig Economy” https://open.spotify.com/episode/79bsCN65o04JlUrLMbE02J?si=zk_wlMH-QLiu5_JO3Z7y-Q
- Talent Protocol, https://docs.talentprotocol.com/fundamentals/what-is-talent-protocol
- Pedro Oliveira, “The Recruiting Brainfood Podcast: Founders Focus -Ep15 — Up close and personal with Pedro Oliveira, CEO of Talent Protocol”, https://open.spotify.com/episode/62UTc2rlKxG103Ip0OeVDM?si=woUHUr4eSaKosJAB69I7Qg
- Balaji Srinivasan, https://twitter.com/balajis/status/1478927706506944513?s=21
- Francesco Renzi, “Coinscrum: SuperFluid — Generating money-streaming services in DeFi”, https://open.spotify.com/episode/7zDoEtE4QKhVDMNgHAxUHx?si=C_Xs7pXPRyGdaj8FL-fWqQ
- Nichanan Kesonpat, “Organization Legos: The State of DAO Tooling”, https://medium.com/1kxnetwork/organization-legos-the-state-of-dao-tooling-866b6879e93e
- John Paller, “Opolis | A Digital Employment Cooperative — John Paller and Joshua Lapidus”, https://open.spotify.com/episode/2y6bRv4QBvoB6ZKdwP0ZJM?si=Q51xHoZOTvOJWBpbn4-G8Q
- Alex Wilhelm, “As crypto unicorns multiply, the US stands out as ground zero for blockchain winners”, https://techcrunch.com/2021/11/19/as-crypto-unicorns-multiply-the-us-stands-out-as-ground-zero-for-blockchain-winners/
- Brian Dean, “Facebook Demographic Statistics: How Many People Use Facebook in 2022?”, https://backlinko.com/facebook-users
- CoinDesk, “Digital Asset Classification Standard”, https://www.coindesk.com/indices/dacs/
- Kai Wu, “Value Investor’s Guide to Web3”, https://www.sparklinecapital.com/post/value-investors-guide-to-web3
- Jesse Walden, “a16z Crypto Startup School: Fundraising and Deal Structure”, https://www.youtube.com/watch?v=jNbPriRubUs
- Brian Armstrong, “a16z Crypto Startup School: Setting Up and Scaling a Crypto Company”, https://www.youtube.com/watch?v=VL5V16HAjYA
- Will Papper and Ian Lee, “Unchained: SyndicateDAO is Launching Web3 Investment Clubs. Could They Disrupt VCs? -Ep.312”, https://open.spotify.com/episode/5cSp5BZ9htmj08p938CTVx?si=4lxRh-CCTKu3t9O22AmwNg
- Kyle Harrison, “The Unbundling of Venture Capital”, https://investing1012dot0.substack.com/p/the-unbundling-of-venture-capital?utm_source=url
- PwC, “3rd Annual Global Crypto Hedge Fund Report 2021”, https://www.pwc.com/gx/en/financial-services/pdf/3rd-annual-pwc-elwood-aima-crypto-hedge-fund-report-(may-2021).pdf
- Su Zhu, “Uncommon Core: How to value Cryptoassets? — With Su Zhu and Hasu”, https://open.spotify.com/episode/2QtUqFXlT7R36S4j6cWBaL?si=Ct7yxzlHTma0SMn7t8Nr7A
- Vitalik Buterin, “Lex Fridman Podcast: #188 — Vitalik Buterin: Ethereum 2.0”, https://open.spotify.com/episode/6cH6YYoF96tUo6G1bCZyTI?si=CyWRSq3YQI2OvKhv906kGw
- Brian Brooks, “a16z Startup School: Token Securities Framework and Launching a Network”, https://www.youtube.com/watch?v=CrrcGiyPglI
- The White House, “Fact Sheet: President Biden to Sign Executive Order on Ensuring Responsible Development of Digital Assets”, https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/09/fact-sheet-president-biden-to-sign-executive-order-on-ensuring-responsible-innovation-in-digital-assets/
- Carl Beekhuizen, “Ethereum Foundation Blog: Ethereum’s energy usage will soon decrease by ~99.95%”, https://blog.ethereum.org/2021/05/18/country-power-no-more