4 Ways DAOs Can Be Used To Make Positive Change
DAOs have taken over as a way to organize communities around accomplishing common goals. We have already seen that DAOs can be a powerful vehicle for driving positive impact.
DAOs Making An Impact
While many Web3 enthusiasts may agree DAOs are going to have a major impact on society and the world as a whole, others might be thinking, “Have DAOs actually done anything yet?” Turns out, there is real-world, tangible impact happening all around us in the DAO space today.
impactMarket, for example, has been able to give $2.5M+ cUSD to over 43,000 people that live in communities in need from 30+ developing countries. Thanks to its innovative DeFi token model and DAO structure, they developed an Unconditional Basic Income system that actually works.
“Thanks to blockchain technology (in this case, Celo network), it is now possible to reach the most vulnerable communities in the world and enable access to finance and unconditional basic income,’’ says Co-founder Marco Barbosa. “It’s actually amazing to see people that never had any kind of access to digital finance being able to use crypto, drive adoption, and pay for their daily needs.”
Peace Movement DAO, a project powered by Movement DAO, has been able to gather $75,000+ within its first month through offering NFTs and tokens that go to help Ukrainians in need. Peace DAO has been able to crowdsource grassroots fundraisers through its community, which consist of individuals that have direct connections to people on the ground in Ukraine, and is supported by organizations such as Help Ukraine Now.
Grassroots communities and local volunteer groups usually have less connections to donor capital than larger, generally slower-moving organizations like NGOs. These more nimble players can often achieve much higher impact and for less cost than larger organizations, making DAOs like Peace DAO an interesting option for donors that want to create the most impact with their capital.
“Thanks to the Peace DAO community, we’ve been able to quickly mobilize funds to help people in the most impacted areas of Ukraine.”, states Anna from Help Ukraine Now, who has been working tirelessly in Web3 communities like Peace DAO to coordinate critical aid for Ukraine.
“In just a few weeks, their support of civilian evacuation efforts helped dozens of families escape the horrors of combat zones. I hope more people join our effort to fund life-saving initiatives and bring hope to thousands of Ukrainians affected by this atrocious war.”
Peace DAO plans to create a more sustainable funding model in the near future, enabling continuous treasury funding and DeFi yield generating strategies. This means that every $1 donated could potentially equal $2 of impact, a goal that the Move platform it’s based on is aiming to achieve.
The impact that DAOs can have doesn’t stop here. There’s four main things that DAOs like impactMarket, Peace DAO, and others do that can fuel positive change:
#1 — Fundraising for causes
Probably the most common way we’ve seen DAOs focus on making an impact so far is by finding new and unique ways to raise capital for a variety of causes.
This can include:
- Creating NFTs of artwork or that represent some form of utility and donating the proceeds
- Selling or giving fungible tokens to investors or donors
- Creating tokenomic models that fund causes
The first two are pretty straightforward, but the third bullet can be complex and there’s many different ways that it could be implemented. One example from Movement DAO is enabling a tribute or tax on certain transactions (e.g., like selling tokens) that funds a treasury dedicated to helping causes or impact projects.
#2 — Crowdsourcing solutions
DAOs are amazing at building communities and getting them to do things effectively. After all, DAOs are built around communities.
These communities are usually centered around solving a particular problem or set of problems, such as saving rainforests or making cities more eco-friendly. They bring all the great minds together that are interested in those problems and give them a structured means to work together to solve them.
Unlike in Web 2 communities like Reddit, Twitter, or Facebook where communities only talk about these problems, DAOs are the ‘action’ layer for getting these communities together to make meaningful things happen.
The tools that DAOs have at their disposal are what makes them effective at enabling action. Governance structures, coordination tools, incentives, and funding sources (i.e., treasury) enable them to build solutions.
#3 — Enabling network effects
Bringing communities together can lead to some viral magic happening. Not only do DAOs build communities but they align incentives, which leads to evangelism and virality. This virality can direct attention to a cause that wouldn’t have been possible otherwise, leading to higher impact.
AssangeDAO is an example of a DAO that went viral, raising over 17,400 ETH on Juicebox (over $52,000,000 at current prices) in order to support things like free speech and whistleblowing. It is hard to imagine such a viral success take place on a web2 platform that results in such a major inflow of cash. DAOs set the stage for this kind of fundraising which can directly translate to positive impact to communities in need.
#4 — Enabling creator economies for a cause
Similarly to how DAOs can fundraise by selling NFTs, they can also act as a place to enable others to create and direct this creative energy for good.
WithUkraine is a DAO that is doing this by creating a virtual gallery, dubbed the “Meta-Museum of Ukrainian Glory”, in their own metaverse that has pieces representing the war in Ukraine submitted by Ukrainian artists. This gives Ukrainians a platform to monetize their creations as well as to fund humanitarian efforts in Ukraine.
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