A collaborative workspace for a decentralized autonomous organization (DAO) in Coordinape is pictured at a recent blockchain meet up at Atlas Cafe. (Kevin N. Hume/The Examiner)
A group of San Francisco technologists is envisioning a work world in which there are no bureaucracies, no headquarters and — most importantly — nobody is the boss of anyone else.
The business model through which they believe they can create this world is called a DAO, which stands for Decentralized Autonomous Organization. DAOs are built on blockchains, or transparent, immutable code that are freely available to audit online. It’s an organizational structure that allows participants a say in how an organization grows and is run.
While there are many different philosophies on how best to build on DAO code and use it, DAOs are less hierarchical than traditional companies, and have no need for headquarters, campuses or other centralized workspaces.
DAOs challenge much of what Bay Area tech culture has been known for during the last 30 years. And yet, some of the most visionary builders are here, living in San Francisco.
“It’s evolution,” says Li Jiang, chief operating officer at the blockchain startup Harmony. “Our parents’ generation, they might have worked with a company for 10, 20, 30 years. Our generation, we work for a company for three, four years. But then the next generation, they’re gonna work for three DAOs at the same time.”
The best analogy to understand is that it’s a digital co-op, kind of like an online version of REI or a local farmers cooperative. A group of people with a shared interest form an organization together, and collectively vote on important decisions.
In the case of a DAO, however, governance is even further decentralized, — i.e., there are no executives, or even an administrator with the sole power to tabulate the votes when it comes to making decisions. Developers instead program “smart contracts,” which automatically execute specified behaviors once conditions are met. There’s no central power dictating what happens, but rather a theoretically unbiased and uncompromised piece of code.
The most common use now are groups of people creating DAOs to invest in non-fungible tokens. These are unique digital items — traded like baseball cards — something that can’t be copied and accrues value within a passionate community over time.
A DAO enables a group of people to pool their money and make collective decisions about their investments.
But the hard core folks, called maximalists, argue the DAO model could eventually be used for organizations big and small. After a few drinks in at local crypto conferences, techies can be caught theorizing about what would happen if Uber was a DAO, and drivers had a say in the pay structure, or Airbnb, with hosts and travelers voting on customer safety.
Twitter CEO Jack Dorsey is even looking into creating decentralized social media with the project BlueSky, though the organization hasn’t referred to itself as a DAO. Enthusiasts believe DAOs will transform the way future generations can work and live from wherever they choose. (Kevin N. Hume/The Examiner)
Critics point out that blockchain technology, in general, is moving faster than regulators can keep pace with it. In some cases, like Bitcoin, it can create an unforeseen toll on the environment in terms of massive energy use. In other cases, international hackers abuse cryptocurrency to extract payments without being traced.
DAOs are also uncharted territory, as they are quickly developing new methods for organizing work with unclear implications for labor law and international regulatory cooperation.
It’s hard to explain why there’s so much DAO innovation in the Bay Area, given DAO members don’t need to be in the same location or time zone to participate online.
Some say the phenomena is just a byproduct of DAOs evolution — up until the start of the pandemic, most of the people working on DAOs were techies doing so as a side hustle after they left their Valley and Financial District campuses. Another common hypothesis is DAOs are just the next phase of tech evolution after startup culture, appealing to those still enamored by the idea of “disruption.”
Maybe, it’s the very diversity of reasons that explain why the region’s leading DAO visionaries have such starkly different approaches to the tech. These are just a few of the San Franciscans on the forefront of that innovation.
A proposal on a ballot that DAO users vote on in blockchain startup Harmony. All users contribute to decision-making in a DAO. (Kevin N. Hume/The Examiner) Li Jiang, chief operating officer at Harmony
Jiang calls Harmony […]