You’ll work at a DAO in a couple of years, and here is why!

To an outsider, the world of crypto seems alien. However, this comes at a cost, the cost of opportunities. The emerging structures that the world of Web 3.0 presents are phenomenal and the best demonstration of technology so far. This article is the first amongst a series of articles at DaoLens where we try to educate people around things that will drastically shape their lives shortly. We promise to keep things simple, crisp, non-jargonish, humane first and technology second.

Why are DAOs better than traditional organizations?

DAOs stand for Decentralized Autonomous Organization. Before the name scares you, any community on the Internet with a shared bank account or some form of shared asset is a DAO.

You don’t have a boss, meaning; the community makes the decisions. Yes, about everything!

Imagine leaving your soul-crushing meaningless jobs to find ways of earning doing what you love. You decide how much you should get paid. You get paid by contributing a few hours, doing what you like. Imagine getting paid for curating a playlist, discovering new tech, or playing video games! Not only that, you can change what you work on every day if you want to. Yes, there are no divisions. An example would be if you are a sales executive who doesn’t like interfacing with engineering, you don’t have to!

No hiring team has to explicitly put in efforts to ensure that diversity is maintained because DAOs are open to everyone by nature. You hang out with a bunch of people who share a chord. You can work for as many DAOs as you want in one go. You know what the community is doing at every single instance, so the pretence around misreporting realities goes forever.

The work is remote, and you define when you work for how much. There is no concept of asking for a vacation because you decide when you go on one. There is no concept of not getting as many ESOPs as your colleague who shared good chemistry with your boss did. You don’t get reviewed by just one person in terms of work. Not only that, your perks of being associated with the community never end if you don’t want them to. Imagine not working but still enjoying the health benefits that came with your company.

When you decide to join a new DAO, you wouldn’t have to go through interviews like you have today! We will re-visit that sentence soon.

You want to learn new skills? You could do that without being at the mercy of your employer to reimburse and, guess what, even earn for upskilling yourself.

You could raise more than generous funds in a matter of 24–48 hours without ever speaking to a VC and unlock more funds as you achieve your milestones. Yes, from folks who are not just trying to catch up to crypto but who have lived and breathed crypto from day 1.

You could support your celebrities, artists or maybe even decide to buy a football club tomorrow and get the community to agree. Imagine being a partial owner of the podcast you like. You could work for a car rental company and determine the roadmap rather than a bunch of executives doing it behind closed doors.

Your idea never gets dismissed by just one person in a back suit but by a hive of intelligent folks reducing the chances of error.

Sounds too good to be true? Let’s dive in!

Structurally, DAOs need just four things.

• Some rules around how things work
• Some mechanism of rewarding contributions.
• Some equanimous way of getting everyone to contribute to decisions.
• Some structure to their community and an initial roadmap.

DAOs surface idea bottoms up, they are more nimble, they achieve things that you couldn’t do, and they have a hive kind of sorts.

So how does it all work?

On a high level, DAOs fall into categories. For example, there could be DAOs where all music enthusiasts hang. There could be DAOs where angel investors hang out. Some DAOs are legit software product organizations where anyone passionate about the cause and the technology can jump in, contribute, earn their spot as a core contributor and earn. Some DAOs are places for gamers to hang out, while others may have NFT enthusiasts. Some DAOs may be a bunch of ambitious people who want to buy a basketball team. Sometimes DAOs may not have any specific objective, but they are just a bunch of folks who pooled in the money and decide to collaborate on directions that make sense. Some DAOs could be fan clubs where fans hang out and share a common identity, while in others, the fans may have a front seat and a say in how their idol (whoever it may be) could make things more relevant in future., Imagine fans coming together and helping Ed-Sheran come up with the next big album. Some DAOs could see a bunch of like-minded folks pool funds for charity. You get it. The possibilities are endless.

Now, why do DAOs not collapse?

Like complex formulas driven by simple principles, DAOs succeed because they have a very natural thing to offer. With DAOs, people are more individual empowered, with all sorts of flexibility and optionality baked in. Not every DAO will succeed, but DAOs get their members to have skin in the game, which is to say that it’s in the best interest of everyone to ensure the community succeeds. This arrangement results in powerful network effects if you think about it. With the onset of Covid, many things like the tendency to accept remote work and the tendency to float proposals like equal pay across geographies picked their pace up. With these shifts, there is more surface area today for cooperation. Folks like to work with other folks who share similar interests, and today, it’s not only possible for talented folks to work together; it’s also possible with much less friction than companies can. 2020 demonstrated that the Internet always wins on many counts, and a few people can bring entire organizations down.

Before proceeding further, we would like to show you a couple of sample proposals. Below are two proposals from Olympus DAO, one of which got approved where the budget for a pilot grants program is being discussed. The other one is open for voting, and you could go and vote yes or now if you own governance tokens for that DAO. How you get that token is a separate topic, so imagine you have the tokens for now.

On collaboration.

A common phrase that gets floated around in the DAO community is the idea of Liquid Super Teams, which is to say, smaller dynamic groups of people who are constantly adapting as per the need of the project. That means collaborations form and dissipate as needed. If you need more people for a particular task, float a proposal and folks who are genuinely passionate about the topic always pool in. These collaborations are so dynamic that sometimes, liquid teams can stay together for just a day and at times for even years. Then each member will go their own way. There is only one criterion for you to contribute, and you were born with it. Differentiation. You have total freedom to choose how and with whom you work. And with a flexible liquid structure, there is motivation and a very high talent density. So every project on its own behaves like a SWAT team.

Another critical point is that individuals constantly need to earn their place in new projects. Meaning you can’t causally get involved. People who would probably never work for the same company come together and build phenomenal stuff. Gone are the days where every project starts with a deck. A simple DM and a few rocket emojis or Hi-5s seal the deal. The cost of failure is also so low. So DAOs become as agile as one can be.

DAOs can get pretty complex as they mature but the basic working remains the same. Here is one of the best organized DAO. Index Coop.

In case of Index Coop, you will also see that there are crisp definitions of working groups to help you understand how things are structured.

Did we say porting your credentials?

Let’s talk about that tall claim we made. You will never have to worry about building a CV, and your new community will know what impact you have created in a flash. How does that work? Today, when you work for a traditional organization, your entire work is in a backbox. Your manager, maybe, knows the sweat you put behind it but no one else does! So, you effectively start from square 1 the minute you step out of your role. Your identity and all your achievements get erased. This is troublesome even for new employers because they have to manage with simple reference checks, which can be flawed for various reasons. In Web 3.0, there is this idea of an on-chain (meaning it’s on the blockchain and can be trusted) identity. Contributions and Credibility both must be interoperable and transferable. In this world, a contributor’s work to one community can be leveraged in another. Web3 allows contributors to have ownership over their body of work and gives them flexibility around their reputation, which gets carried forward. Imagine moving into a new workspace and immediately getting the same level of authority and respect that you earned over the years. Not because you hold a designation but because the community trusts the on-chain system. Power and respect emerge over time in this world and do not get randomly assigned. You may be wondering how this works? Abstracting complexities away, as you contribute to a DAO, the wallet (where you store your tokens) and use it just like you use Google to authorize today via SSO) holds a copy of everything you have done.

On one of the DAOs surveys by Gitcoin in Sept 2021, here is how people responded when they were asked if they had an on-chain resume.

Let’s talk about flexibility.

With Covid, most jobs became slack workspaces. In other words, work became flexible and time became a commodity more so than ever before. Just as any intelligent person learns to keep their eggs in different baskets, smart workers already invest their time across workplaces. Why? One word answer would be optionality and freedom. You may choose to work for a couple of companies for a couple of hours simultaneously. You may decide to team up with others for side projects that are time-bound and preferably even get rewarded for completion. This benefits employers too because now nobody can effectively say they are bored. DAOs bring optionality, flexibility, and individualism while leveraging the benefits of an expanded network, specialization, and community.

On being asked, what their day to day looked like, the respondents of the same Gitcoin survey had the following answers.

Let’s talk more about the skin in the game.

What brings a bunch of people to collaborate on something? Talented people of all have a zillion opportunities to pursue today. So how do these groups organize themselves so effectively over time? What gives me the strength to claim that the future of work is DAOs?

The most straightforward answer is no opportunity cost and a considerable reward. People, products, startups, media are always a function of who has skin in them. For the first time, anyone can be a stakeholder. There is no opportunity cost because you can always start with just a couple of hours a week until you get smitten. There is a reward because as you progress, you earn tokens. How you earn these tokens get determined by the smart contract or the rules. On a high level, the tokens give you governance rights (you can vote on things and exercise your voice). This is where it gets interesting.

As the DAO sets on to achieve something it wants to; the tokens increase in value. This is very similar to how a company’s share price increases over time. Except that you can earn more tokens by doing more work, there is no fixed vesting (unless some DAO wants it in their code) or not the board approving who gets what based on their subjective judgements and the maximum number of tokens and say end up with people who have contributed the most. As the tokens rise in value, the benefits can extend beyond monetary value into the delight of how you are getting that value. As such, the whole network starts becoming stronger. You loop in your smarter friends into the circle, and the DAO keeps getting better and better. The network economy, in effect, is the most potent moat a DAO has. Contributors want a good culture, facilitation to succeed and ownership with autonomy.

DAOs do precisely that, and the fact that everything is a community makes it even more beautiful. People come together in a DAO not because an HR professional handed them a letter but because they share values, trust and vision. Members don’t call a DAO their office, but they call it their home! Anyway, long term community building is why DAOs will rive. All other aspects like financials are superb as the cherry on the top. The organizations of today have messed it up badly. They optimize for-profit and cannot account for other forms of value such as sustainability, financial resilience, and worker alignment. On top of all that, tremendous energy is wasted optimizing for zero-sum games of equity vesting, salary negotiation, and organizational politics. DAOs garner popularity because of the vibe they bring.

Below is a snapshot of how a DAO Contributor describes their experience.

By now, you must have known that we are sharing a few screenshots from the Gitcoin survey. so here is one more.

DAOs even have standardization of how you can get paid doing different kind of things. A higher score gives you more point for example and you earn rewards. Note how there are things like talk about the community and that also gets you brownie points!

We don’t want to jump into many granular details right now, but there are tools like Coordinape that facilitate members to reward each other. It’s like you appreciating your colleagues for the hard work they are putting in and rewarding them in the form of Gift circles which they can encash.

Let’s talk about Branding.

Today, brands talk about user-generated content. Creators and influencers are everywhere. That is happening because we as people trust people over anything else. When diverse individuals work, everyone has their audience and network. Secondly, they believe in what they are building. So they talk about it. This means the liquid team achieves more reach than a corporate, even if they spend millions of dollars on forced marketing.We talked about vibes in the previous section. In addition, DAOs prove their resilience with proof of work. In other words, they let their work speak. It’s almost like the DAO is saying; “we achieved everything we set ourselves to and we did it in a way that you would be proud”. Proof of work naturally attracts more talent.

Okay, but the elephant in the room is when so many people work, do things ever get executed?

This is where DAOs win by a landscape. I will use a phrase that you have most likely dreaded if you are not a crypto believer but stay with me. DAOs use a piece of code called ‘Smart Contract’. This code decides the rules and is self-executing. It is these smart contracts that give birth to the word Autonomous in a DAO. So on a high level, on Day 1, the smart contract is pushed. It could govern things like if 51% of the people vote to spend 1000 dollars, approve the transaction automatically. There are safety checks as well. For example, if 51% of the people vote to use all the funds in the treasury, freeze the assets for 28 days. A smart contract can be modified, but only if 51% of the people agree. You can’t change this code in any other scenario. It needs no supervision. So when a proposal is passed, the code executes. If you submit your work and say you did your job and the majority agree, no one can stop you from getting paid. This makes the system trustless because you know the code will execute without any human factor or hurdle popping up. Anyone with a mobile phone and an internet connection can participate in such a network.

At any point in time, you will see DAOs sharing open opportunities up for grabs.

Rage Quitting. If you’re not happy, you can always go your own way!

This doesn’t just imply you can quit, which you can. And when you quit, you can exchange your tokens for fiat. There is a phrase called ‘rage-quitting’ under a new popular framework, but we can keep things simple here and just understand that you can walk out with your stakes at any point in time. But the world of Web 3.0 thrives on the idea of composability, which is very much like compounding. All the code is open-source and available to everyone. So, you can use any piece of code as it is and add tweaks on top of it, and the next day you have similar software. Gone are the days when APIs could be restricted, and corporate giants would not share certain things with you. This enables a fascinating dynamic. What we have just discussed implies that the switching cost is low. Members of a DAO always have to ensure that everyone is happy, or else a new DAO could fork (be born) any day. Also, if a DAO uses the same structure as an existing DAO, they are effectively two groups of people working towards the exact cause. So, folks give it a lot of thought before starting a fork because two players make each other weak initially unless one wins. It all boils down to the survival of the fittest culture if you look at it. Put intelligent people in a room. Have them share passion, voice, rewards and trust them to find the way to the next big thing.

DAO Treasury.

The last thing to cover for all to make sense is the treasury. So, when you join a DAO, you have to show skin in the game. How do you do it? The most common way is to have an entry criterion, just like the entry fee in a nightclub. Have 20 tokens, and you will be a member with voting rights. Now all the funds you buy these tokens with end up in the treasury. Every DAO more or less works towards increasing the value of the treasury as much as it can. How they do, it is entirely up to the members to decide, but it is always a wise idea to trust a bunch of smart, creative people to make the right decisions.

A few examples

There are maybe 2500 DAOs today. A few examples are

• NFT DAOs: Purchase fractionalized NFTs, promote them, support artists or get exclusive access unlocked because you own the NFT, co-create with artists. Maybe, sometimes hang around and discuss upcoming projects and earn rewards. Example — Flamingo DAO or Creator DAO.
• Worker Collectives: Gen-Z prefers freedom in their life. Freelance contracts are increasingly replacing salaried positions. The only difference is that they get paid better than what a traditional freelance would pay them. They feel a sense of belonging. There is no denying them of their rewards given the transparent nature of things and positioning of smart contracts that can’t be tampered with. Examples are Raid Guild, DOrg
• Investment DAOs: Contribute funds to a pool. Get a voting share but use the knowledge of the community, the hive mindset to decide how you use the treasury. DAOs could function like VCs and build a portfolio, or they could just leverage the state of art crypto finance space (things like DeFi) to get higher yields. Example: SeedClub, Lao DAO
• Companies Structured as DAOs: Launch products with a bunch of random folks helping you achieve milestones in your roadmap. Usually, these DAOs have a well-defined tokenomics (a set of rules around how many tokens will exist, how they will get divided etc.)
• Nomad Communities: Neighbours often pool in funds to meet the demands of their locality. DAOs take it to the next level by pooling funds and rewarding members with interest as you go on with your life. Take it a step further with digital nomad communities like Permatek. With Permatek, members pass on their membership tokens to their next guest for a season. While you’re a token holder, you could decide what Permatek should do. Imagine visiting a place and getting a say on how things should be, earning interest while you stay and then passing the baton on.

The list goes on and on. However, as per DAO survey by GitCoin, below is where the respondents are contributing.

As per Orca Protocol’s DAOs 2021 Wrapped, some of the most common themes towards which these DAOs have worked are highlighted below. You should note how governance, working groups (aka working pods inside a DAO, more like a Sub DAO), compensation sits at the top three. Grants and Crowd purchases were also pretty much in the glamorous arena this time.

While themes are great, some proposals garnered massive contention. It is to be noted that three of these five proposals passed. The community enabled analytics proposed administering a $25M grant to Flipside (Flipside lets communities design their insights using their pre-modelled and labelled dataset). They also have bounties to who assist in using the dataset to answer the questions raised by the community) failed to achieve a majority. The one about treasury diversification, which proposed the use of 51M $SUSHI (the native token of SushiSwap) to onboard institutional investors, was withdrawn.

A little more of spice

Other highlights from Wrapped 2021 include the most impactful emerging DAOs.

Before we move on to the next section, it would be not fair to talk about some of the most talked-about moments. Constitution DAO was where a bunch of folks came together with the agenda of buying a copy of the US conception, and they came surprisingly close though they couldn’t succeed. Kraus House became ultra-popular when they decided that they wanted to buy an NBA team which also gave birth to #WAGBAT → We are all gonna buy a team. Free Ross DAO emerged in solidarity with Ross Ulbricht and the injustices of the American Prison System

Recap: What makes DAOs so powerful?

Internet communities are mighty. The wave of the Internet has democratized how we learn and work. At an individual level, remote working means that talented workers can contract with traditional organizations and DAOs worldwide. Even if we keep DAOs aside, traditional organizations already value that, and the whole wave of companies adopting remote or hybrid work culture, equal pay across geographies are the early indicators of the future of work. If anything, the power of communities across platforms like Reddit, Twitter keeps coming to the limelight time and again; however, these communities always lack a formal conclusion. DAOs take this amorphous state of the communities a step further and formalize it. At root, DAOs are about pooling risks and rewards and leveraging the stability of such economies of scale.

DAOs sit at the backbone of the future of work. By nature, a DAO is open-source and can be run from anywhere in the world. Unlike traditional organizations where individual employees and users are accountable to decisions made behind the closed doors of a boardroom, any stakeholder of a DAO can step up to be the change they want to see. They are public, which means anyone can see what’s happening. This becomes compliant with most regulatory frameworks by nature, which means more and more companies will gravitate towards this approach. DAO based organizations have a plethora of advantages like no administrative costs, no issues around diversity as everyone is free to contribute. DAOs are emerging as the natural governance structure for online collaborations: especially crypto-native projects, but also offline organizations looking for a competitive advantage by architecting out their administrative centres. Web 3.0’s core contributors incline towards everything decentralized because they have been in the space enough to understand the powers and beauty that come with it. As we adopt more decentralization, anything that is not a DAO will fade away.

How prevalent are DAOs?

If you start searching, you’ll realise that the first DAO ever launched was a grand failure. But we have come a long way from then and DAOs have become so much better. It’s best if we quote someone who was right in the middle of the first failure.

The viral emergence of DAOs is just one way the popularity has surfaced. Folks talking about NFTs when no one was are talking about DAOs today. It may not be an overstatement to say that DAOs may become the buzzword for the regular world coming out of crypto folks. Maybe, even as soon as 2022! People go towards better systems. DAOs promise better pay, better flexibility, a better promise, and anyone jumping in today is still early to the party.

DAOs as a sector have a long way to go, but they are growing at a pace that you will make it big very soon. 2021 was a perfect warm year for DAOs. As per DeepDAO, at one point, DAOs were managing as much as $15.9 Bi in funds, with the number of DAOs unknown and active DAO members above 1.3 Million people. In isolation may seem nothing but just on their platform, there were nearly 150 DAOs that were established every month in 2021 according to DaoHaus which helps you establish a DAO.

As of now, some of the most impactful projects expected to launch fully in 2022 are being worked upon by stellar teams.

So, should you work for a DAO? What is the opportunity?

All DAOs will not be successful. To be successful, they must cross the chasm between a core-team of visionaries and lieutenants, to an ecosystem of incentivized contributors. As per DAO survey by Gitcoin in September 2021, here is what the 422 respondents said they did at different DAOs.

You can clearly see that there is less density aka more opportunity around certain areas. This graph however should be interpreted with the understanding that certain things like community building will always demand attention from more number of individuals.

The emerging trend is that people start with DAOs gradually on the side and they move full-time when they become comfortable. Around 44% of the respondents say that DAOs are still not their primary source of income.

It is never too late to start. Majority of those who were surveyed by Gitcoin said they started in 2017 but if you observe the pattern, more and more people are joining the world of DAOs even today!

At DAO Lens, we are also not a big fan of showing skewed datasets to boas you. Sure, some folks full-time into DAOs earn millions but on a broader scale, below is where the earning stand today. It’s still an arduous task finding your way through DAOs, and that is where we are coming in (more details on this soon).

If you have been wondering what kind of work most people do and how they get compensated, then the responses are mixed. We believe this is great because that means simply one thing. Flexibility.

But you have heard Crypto is volatile. True. And it will remain so far a few years. This is why DAOs reward members with varying strategies to earn stable coins that are pegged to fiat currencies and remain stable.

If you have been considering jumping into DAOs, here is where most DAO respondents are in terms of their runway and savings.

When it comes to additional benefits, many DAOs are still new and will take a while before they start standardising benefits such as health insurance. This is another factor why many folks are still only part-time DAOs.

Long story short, no one can decide for you you, but based on our encounters, DAOs are going to be huge and the benefits of joining before the crowd does could be life-changing. There is a very clear narrative that DAOs are opening gateways for more people faster than anything else has! You’ll hear folks saying things like — “Since jumping into DAOs new opportunities are opening up for me really rapidly so my income will likely be doubling or more very soon. Then, it will meet my needs of a stable income.”

If you are still on the fence about whether it is worth leaving my job by the end of this article, we hear you, and you are not alone! There will be questions around identity, meaning and impact of your work, and your life decision. This is why we will be talking continuously in a language that you don’t have to google for. There are camps that draw parallels between the goldrush and the crypto wave. We intend to remove misinformation through education.

What do the experts say?

Say something, really Wild.

One DAO could invest in another DAO and influence their governance! Think DAO2DAO interactions. It’s already being worked upon in phenomenal ways. Let that sink in.

What’s next?

At DAO Lens, we are solving a host of problems, but the first ones we focus on are enabling people to have a trust-based mechanism to discover where they belong in the crowd. We will be talking more about how we do this in future, but one thing is sure. Work has never been more rewarding elsewhere, and we would request you to follow us for more updates on how you can grab a piece of the pie too.