DAO is kind of like a group chat with a bank account — and a little bit joint-stock corporation, a little bit cryptocurrency, a little bit gamer clan, a little bit message board, a little bit multilevel-marketing scheme, writes readmaxread
In September, the trendsetting VC firm joined Pace Capital, Kindred Ventures, Spark Capital, and the 31-year-old New York Times–appointed “It Girl in venture capital” Li Jin in putting a total of $10 million into Friends With Benefits, which describes itself as “the ultimate cultural membership powered by a community of our favorite Web 3 artists, operators, and thinkers bound together by shared values and shared incentives.
But. Uh. What actually is a “decentralized autonomous organization”? Described by breathless fans, DAOs can suggest a kind of group or corporate intelligence, a hive mind distributed across the blockchain.
Theoretically, the point of this structure is to encourage members to work for and promote the organization without needing executives or administrators — or even, for that matter, knowing who your collaborators are. Because each token represents a financial stake in the DAO, all members are incentivized to both increase their token holdings by doing beneficial work for the organization, and to drive up the value of their own holdings.
Though I have no doubt they will find an answer, arguably the genius of Friends With Benefits is its recognition that, at least right now, a DAO doesn’t really have to do much of anything at all. If it’s cool and exclusive — and if its members promote its coolness and exclusivity — demand for tokens will rise. Squint one way, and it sort of looks like Soho House, if it were structured like a frequent flyer program and run like an anarchist squat co-op.
But creating more equitable ownership structures doesn’t necessarily translate to more democratic control, or a better end product. In most DAOs, tokens still act like shares, so whatever person or people own a majority have the most power. A YouTube where Jake Paul and the kid from Charlie Bit My Finger collectively own a significant portion of the platform would certainly be better for Jake Paul.
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