ConstitutionDAO was literally a kickstarter. They handed out tokens that gave you no rights, no ownership, no voting - no nothing. Just tokens of appreciation. The people who collected the crypto deposits would have been the sole beneficial owners the constitution. Just a donation.
Any DAO that wants to do anything of any meaningful complexity ends up registering as a Wyoming entity which isn't really any different than an LLC.
DAOs are an attempt to separate the crypto nouveau riche from their tokens.
You can achieve anything you want to from a DAO with a corporation plus a twitter poll or SurveyMonkey thing - except the issuance of unregistered blue-sky securities.
Anyways, what's going to get really interesting is when we inevitably have see some legal challenges around this. I strongly suspect we'll see some personal liability materialize and this is going to take a lot of the fun out of this new grift.
DAO tokens do not convey ownership, so, a kickstarter campaign.
If DAO tokens do convey some ownership interest, then they'd have to be registered as securities - which is why DAOs are very clear that you get nothing but their appreciation in exchange for the tokens. In which case you'd sell them the same way you sell any other securities.
Reg A+ and Reg CF allow the sale of equity for crowdfunding contributions, btw. There are even some marketplaces that sprung up around them.
You are speaking categorically when that is not the case.
If a DAO token is a security, it does need to be registered: it either needs to be registered or have available an exemption from registration.
There are DAOs that try to fit within an exemption from registration. See the LAO, and it's offshoots, like Red DAO, Flamingo DAO, etc., which sell LLC interests to a limited number of accredited investors.
> There are DAOs that try to fit within an exemption from registration. See the LAO, and it's offshoots, like Red DAO, Flamingo DAO, etc., which sell LLC interests to a limited number of accredited investors.
Ok, but that's just an LLC with extra steps no? If you're only accepting accredited investors then you're required to validate that they are accredited meaning that you have to pierce the veil of anonymity. It imposes legal control over the transfer of these tokens which means there's no reason whatsoever for them to be decentralized, permissionless and on the blockchain?
Accredited investors were always welcome to buy whatever toxic garbage they wanted.
I think you are treating DAOs as a single monolithic idea, when it is more like an infant design space.
I would say the core idea of a DAO is this: how can we organize a disparate group of people around a common goal, more easily than in the past?
Whether you think they are a joke or not, ConstitutionDAO, SpiceDAO (which I think is the worst example in this space given their lack of diligence or thought on IP issues), OrangeDAO, FlamingoDAO, etc., are all unique in that they have organized a disparate group of people more quickly than in the past, and enabled them to more efficiently work together towards a shared goal.
There are many ideas being explored:
1. Can we have better laws (like Wyoming is exploring) or regulations?
2. If the DAO is decentralized enough, are the tokens still (or should they be) a security? Are there better ways to regulate something like this globally?
3. How do you coordinate a disparate group of people? How should you let in new entrants, or weight votes? How should a DAO manage its treasury?
4. What happens if all voting proposals are public and verifiable on the blockchain? Is that good or bad?
At it's core, yes, I think you can say that a DAO is basically the idea of a corporation, except with most of the discussion on Discord and with on-chain voting, and plus some securities laws issues that are at best gray areas and at worst, in some cases, clear violations. But I think that is ignoring that something worthwhile might come out of that design space.
I mean yes, that's fair, I am. Broadly though, it's because they seem to be unified behind the idea of issuing unregistered securities and selling them to un-accredited investors because they don't seem to think the registration of securities is valuable.
I disagree, because, the Great Depression.
They're not setting out to solve a limitation around business organization. You can do basically anything you want out of a Delaware LLC or C-corp except sell the shares to an un-accredited investor without registering them. There's even a light-weight way to do that with Reg CF and Reg A+.
You want public voting? Ok, that doesn't require a blockchain and it certainly doesn't require a whole new legal framework for organizing a business. Twitter has managed to have polls for years.
Most people actually trying to build a business of value aren't trying to reimagine the concept of a business.
By all means, go with God, find a better way to organize companies. If they land one one, I'll happily use it. But so far all I see is grift, crime and frankly, little else.
Those entities eligible to be accredited investors are estimated to control the better side of 3/4 of private wealth in US. I don't see how allowing (or DAO/LAO somehow illegally bypassing security laws) un-accredited investors could possibly be a deciding factor in recreating a Great Depression. Most (private) wealth can already buy whatever "toxic" stuff they want in your own words.
Also, it's possible to sell these investments to non US-persons under regulation S without bothering with the accredited investors.
>Most people actually trying to build a business of value aren't trying to reimagine the concept of a business.
Most people actually trying to build a business fail. It would be fallacious for me to imply that means not reimagining concept of business means likely failure, even though it is technically true.
> If you're only accepting accredited investors then you're required to validate that they are accredited meaning that you have to pierce the veil of anonymity.
Really curious - is it enough for another party to attest that they are accredited? Ie- could I set up a company selling verification services, saying “the person with this key is accredited, send the feds our way if they ask”? (Pure mental exercise, just honestly curious)
DAOs offering ownership interest via tokens is not an LLC with extra steps. It’s LLC++. An owner can easily sell their stake to someone else, write an option against it, etc. Sure, all those things were possible before, but now it’s much easier and generally programmable by anyone. That’s progress.
Sure you can transfer ownership by going to a company, getting approval from the board to update the cap table, and then executing the transaction via wire transfer. Or you could do it near instantly on the blockchain.
And how would you write an option on your ownership stake using conventional technology? That seems like it would be prohibitively hard.
How would you use your ownership as collateral in a loan? The illiquid nature of private stock may turn some lenders off. On a blockchain, the collateral can be part of the smart contract.
Many technological advances simply make already possible things easier. For instance, checks were around since the time of the Crusades. Functionally, checks transfer money from one account to another. We also have a postal service we can use to send checks almost anywhere in the world. So why do we have digital banking infrastructure and wire transfers?
Corporate approval is optional and the company would have to waive it to operate in the model you describe. The friction you describe is at the will of the company. They can allow free transfer now they choose not to.
The issues you describe are intentional encumbrances on the part of the company and corporate attorneys which they could stop at any time. You haven’t described how this model would change their minds. Changing their minds is the thing holding back what you desire not the technical limitations.
So I just created a company? How can I give you some ownership right now? Are we going to email contracts to each other or something? And how would you write an option on your ownership? You're just hand waving and saying "you could do that easily some other way." But how? Unfortunately, I don't think many people will trust a random option contract you write without some type of guarantee the contract will be executed.
It's like 2 clicks on Carta or Pulley, and fully electronic and automated - and backed by the force of applicable law. It probably takes less time end-to-end than a Bitcoin transaction.
Even if Carta and Pulley didn't exist, this is still not a technical limitation of non-Blockchain systems, at all.
This comment is no different than the following infamous comments
1. “No wireless. Less space than a Nomad. Lame”; from Slashdot, dismissing the new Apple iPod.
2. "For a Linux user, you can already build such a system yourself quite trivially by getting an FTP account, mounting it locally with curlftpfs, and then using SVN or CVS on the mounted filesystem. From Windows or Mac, this FTP account could be accessed through built-in software"; from HN, on the launch of Dropbox.
Yes, DAOs may be similar to corporations mixed with a SuveyMoney, and the above comments also have some truth to them. But all three entirely miss the forest for the trees, and miss that there are qualitative changes that make the impact of the new version much greater.
DAOs allow a disparate group of people to raise capital and execute towards a shared idea far faster and greater than was previously possible. That is a qualitative difference worth paying attention to.
And while you are correct that the legal frameworks backing DAOs currently have many problems, that is something that will change.
Selling unregistered securities is not a new concept lol. It went unbelievably poorly last time we tried it which is why we stopped.
It was a major contributor to the Great Depression.
So my question to you is: what has changed since last time we tried this? Why am I to believe that "this time is different."
[edit] Your suggestion that an idea cannot possibly be bad because 1000 startups are chasing it holds no water, it's an appeal to authority. Worse than appeal to authority: it's an appeal to the wisdom of crowds. Crowds of course are notorious for making great decisions. Hundreds of thousands of individual investors thought that sub-prime mortgage backed securities were a brilliant plan.
I don't see this conversation going anywhere productive, but do you not think anything has changed since the Great Depression?
Your arguments can (and have been) those that applied to Uber or AirBnB; namely, that the only value they had was in skirting regulations, and that eventually the regulations catch up such that Uber or AirBnB is no better than the predecessor taxi and hotel industries. And I think there is certainly a lot of truth to that, but I also think this is normal human progress. As times change, we try something slightly different, and where old pain points arise again, we re-regulate accordingly. You are left with something that is indeed quite similar to the older industry, but with a fresh coat of pain and some improvements. You can dismiss that as entirely worthless, but I see it as normal and part of progress: two steps forward, one step back.
Similarly, I think having financial regulations that were created in 1933 be static forever is a mistake. As technology progresses, there can be room for changes. So I see DAOs and crypto in a similar light: yes, certain actors violate existing laws, but there is a freedom to explore a new design space, and then the regulators will catch up and reign it back to something more reasonable.
As for my link to OrangeDAO, it is not about 1,000 YC founders with Web3 startups, but 1,000 YC founders that are members of a DAO that seeks to invest and help other Web3 startups.
As for what's different, my answer would be scale. DAOs make it easier to coordinate large groups of people. Take a look at what OrangeDAO seeks to fund:
Many of them are targeted towards corporate infrastructure; replacing traditional processes with software-first functions, which allow a lot of disparate people to function together more easily, and reduces the friction of "a group of people working together towards a common goal" from that of an existing corporation.
> I don't see this conversation going anywhere productive, but do you not think anything has changed since the Great Depression?
In the sale of blue-sky securities? Not a darn thing.
> As for what's different, my answer would be scale. DAOs make it easier to coordinate large groups of people. Take a look at what OrangeDAO seeks to fund.
Sounds like a VC fund. Just wait until you see the list of those projects!
> Many of them are targeted towards corporate infrastructure; replacing traditional processes with software-first functions, which allow a lot of disparate people to function together more easily, and reduces the friction of "a group of people working together towards a common goal" from that of an existing corporation.
So like, Zoom and GSuite? I'm not sure how "Waze for moving crypto assets" fulfills that goal.
Those comments are both shallow dismissals so I would wager that it is _your_ comment which is no different. You have offered zero evidence of a successful DAO, merely defined what a DAO is, and appealed to the authority of a bunch of people who are likely to profit directly from the cryptocurrency bubble.
On the other hand, ConstitutionDAO - the most noteworthy example to date, was a complete failure and hasn't even been able to handle refunds.
They didn't "learn", SpiceDAO was just a straight up scam. They raised like $8m dollars, spent $3m on a book, (100x expected auction value) and then decided to pay themselves $30k a month from the remaining proceeds and presumably just collect interest on the rest. It's been HUGELY profitable for the people who set it up. Ahem, the "core team".
How could I!? Last I checked they were basically using their received funds to create a fucking powerpoint to show to streaming providers? A show which obviously can't use any of the Dune IP so...why did they buy the sketchbook?
The sheer incompetence/negligence/malice would be funny if it weren't so sad.
That is a fake narrative spun from a screenshot of a tweet[1] taken out of context by people unfamiliar with IP laws.
I'm familiar with this DAO, they have been advised by a competent IP lawyer before even bidding on the book. There is a crucial legal difference between derivative work, and work "inspired by" another.
Just provide a source - no one knows you so your familiarity with the DAO is useless.
edit: Thanks - that tweet doesn't inspire confidence. Why would you need to overbid on a sketchbook in order to make a show which is inspired by it? Why not just, you know, make the show...
Orange DAO is very interesting. Thanks for sharing I hadn't seen it. I have been wondering if crypto represents a "rift" in the HN/YC community that simply widens into a chasm.
Orange DAO being completely separate from YC suggests this is a possibility. Imagine the year is 2030: Orange DAO has more assets under management than YC itself, and has proven greater returns for investors in both percentages and absolute dollar value.
Apparently many ConstitutionDAO participants have been screwed because in order to get their money back they've had to pay transaction fees which exceed 200$. Quite the racket.
These transaction fees are determined dynamically by the Ethereum network depending on network usage, and given to Ethereum miners, not the particular dApp with which one interacts or their developers.
Anyone using ETH would presumably have been aware about the enormous fees involved.
I think this potential conflict of interest for miners to push DAOs and then maybe for raised beurocracy in a DAO for more gas money and questions of whether a seller in some of these auctions realizes they should become a large holder in DAOs that might bid 100X the valuation of their asset are the kinds of conflicting interests that make this kind of system less practical than a legacy system where the structure for regulators to subpoena whatever they need is part of the licensing, etc.
Fun fact: after the DAO had essentially folded, the $PEOPLE token folks were left holding could be traded for more than 10X the value it cost to go in on the DAO.
All: if commenting here, please respond to specific information in the article and avoid the generic yay and boo comments that have appeared here countless times already. They are boring.
For people with skin in the game (read: all of us) -- it pays to be students of history. There is a rich tapestry of prior art available for us to study that can help us define the appropriate relationship between the public, with the government as our agent, and aggregations of capital as expressed through crypto. In particular I recommend reading about the early federal efforts to safeguard the public interest from rampant capitalistic excesses in the form of the Interstate Commerce Act of 1887, and its immediate fruits (the Sherman Act, etc).
Those efforts were largely focused on antitrust regulation, which is a different problem than the sorts of blue-sky securities problems that are more common in today's crypto space. But the reason I'm recommending reading about the earlier antitrust stuff, as opposed to the securities regulations that began to emerge a few decades later (which is more superficially topical), is that it marked the beginning of a phase transition in how the American public viewed the relationship between government and business. I think we're in the early part of another such phase transition today. Without the antitrust regulations that preceded them, subsequent securities regulations would likely have had a much steeper hill to climb in the court of public opinion.
Obviously we aren't going to be able to just copy+paste yesterday's regulations onto every newly emerging trend. But I think we can definitely draw lessons from how earlier types of regulations emerged and the ways that the government's relationship with capital interests was adjusted over time.
There were also downsides to the new regulations (like the coopting of the definition of "trust" to include unions as a means of curtailing the power of labor). Those are valuable lessons, too.
I say this as someone who is relatively pessimistic about the value that these new crypto constructs are going to be able to provide over the long term, but I'd make the same argument to crypto optimists, as well.
Apologies to the non-US folks; other countries have their own regulatory histories, some of which were well ahead of the times compared to America. But I'm less familiar with those.
These kinds of recommendations and thoughts are extremely important moving forward. I do not believe the agency of government will be able to keep up with the speed of progress and it will become increasingly important for us to take lessons learned throughout history and apply them at an individual level. I'm very biased towards crypto as I see the increasing failures of government action leading to massive wealth inequality. If you have any specific resources you'd recommend on reading up on the commerce clause I'd be interested in reading up on them. My bias is unlikely to reveal anything favorable of the for that act, as I'm already quite averse to the overreach the government has taken with that policy used as its launching point.
Wealth inequality is traditionally exacerbated by lack of government regulation. Further, I don't actually see cryptocurrencies actively trying to attack the problem of wealth inequality. Rather, they are staunch proponents of free markets which, left unchecked, result in massive wealth inequality.
None of these "cryptocurrencies" address inequality. One can draw parallels between generational wealth in our present system, and the wealth of early adopters in both proof-of-work and proof-of-stake systems. If anything, the attraction seems to be gambling on getting in early in hopes of profiting from these flaws.
Except that massive swaths of people disenfranchised by the conventional systems of economics are also shut out of crypto by its byzantine entry requirements. Yes, people with massive amounts of disposable income interested in trading but with no ability to competitively trade against private firms can find a home in crypto, sure. That has nothing to do with the wealth inequality faced by someone who, say, has to work six days a week at minimum wage to support a family and doesn't have the time or energy to figure out how to benefit from this stuff.
Then we need to think how to make crypto accessible to them. There's huge opportunity to create real value to society in this space.
These folks are being smashed by inflation. They're getting poorer everyday. We have to figure out how to allow them to quickly escape this rat race through a non-inflationary currency.
We have legalized and normalized gambling almost everywhere in the world. I'm not sure that society wants or has the ability to get rid of "get rich quick scams", but believing crypto is nothing but scams is just revealing a heavily inaccurate biased information source.
If you earn X and your bills are say 80% of X then you can not afford to risk putting your money in any cryptocurrency because if it drops by more than 20% then you can not afford to pay your bills and you might wind up without electricity or not even being able to pay your rent. This is an argument for having limits on brokerages for you being already wealthy because if you are not then there's a big chance you will wind up on the streets and that's bad for society.
You're missing the point. They need to be able to pay the 80% without being held hostage to the FED.
Fiat currencies are a scam as well. Crypto isn't a scam inherently, scams exist because there's too many gullible and greedy people.
But Fiat is designed to be a scam. A few folks control the supply and effectively steal from everyone when they increase it.
You cannot arruficially increase supply of most crypto.
We need to stop thinking about "how much is crypto X is worth in dollars" and actually cut the dollar out, let people buy everyday needs directly with crypto.
> We need to stop thinking about "how much is crypto X is worth in dollars" and actually cut the dollar out, let people buy everyday needs directly with crypto.
And so you will have the ultra-rich who've hoarded the coins at the very beginning, and the rest, who will be getting smaller and smaller scraps.
Today the rich control money supply. There's no chance for the poor. They cab increase their gains by 10%, but it will be taken out from them with little effort.
Whoever actually serves society and earns coins for their service will keep their value in the long run. In one generation, or less, it will be possible to ascend from a poor level.
Just like it was possibke and happened all the time earlier, when currencies were pegged to non-inflationary assets, like the gold.
Why is a deflationary currency better for people in disadvantaged situations?
Seems to me the issue isn’t inflation it’s lack of wage growth, and with proper wage growth, far more people would have been able to benefit from the market growth we’ve had.
They can grow their wage as much as they want, it will always be easy to take the value back from them by increasing money supply and artificially reducing their share.
Current government policies are the biggest causes of wealth inequality[1]. On the other hand global trade, which is an actual free market, seems to result in less wealth inequality over time[2].
As such, I wouldn't be so sure that cryptocurrencies will only exacerbate inequality. "Free markets" often required a central entity to draft and enforce laws, giving this central entity power and incentives to favor certain market participants, by selectively applying or changing the rules. Cryptocurrencies could bring about actual free markets in places where there weren't before, by autonomously codifying and enforcing laws.
> Despite the fall in equity markets that drove a sharp decline in wealth in 2020q1, equity prices rebounded quickly after the Federal Reserve, U.S. Treasury, and Congress took steps to stabilize financial markets and the economy, and households gained over $18 trillion in wealth since the beginning of 2020. This 17% increase over 2019q4 was driven by asset accumulation much more than by debt paydown. Further, asset-price increases were the dominant source of wealth accumulation, accounting for nearly 80%.
DAOs are unable to perform any interesting calculation due to excessive cost of computation. It can't even solve a Linear Program to distribute resources effectiently (let alone actual scheduling which requires mixed integer problems which often take many core hours on actual CPUs). Any function a DAO can perform a notary can perform cheaper, including running votes.
A notary can be bribed. You can theoretically corrupt a blockchain, but it's harder than one notary.
Aside, notaries where I come from are extremely expensive and inefficient. I'd choose a blockchain in a split second if I could, for anything requiring human notaries now.
“It’ll be better soon! Just as soon as <x> gets implemented! Just you wait and see!”
We’ve been hearing this for basically as long as cryptocurrencies have been around.
I suspect we will see a currency that can do decent throughput, but I think it will require advances in the underlying theory for that to happen and that’s a few years away.
There aren't any advances necessary, blocks just need to be made bigger, happen more frequently or both. Bitcoin cash has 32MB blocks instead of the 700KB average that bitcoin has and monero has a dynamic system. Litecoin, dogecoin and whatever else could handle plenty more throughput by just upping their block size. There is no actual technical barrier to this.
The only reason people think it's a problem is because bitcoin and ethereum have limited themselves so much.
Surely the people who design the protocols aren't intentionally sabotaging the usefulness of the blockchain with these limits? If the limits are raised, what problems are introduced, and what advances are needed to avoid them?
This article is abstract, hand waving, vague prediction nonsense in this context.
It already works to have large blocks, it always has. Why don't you tell me specifically and technically where you think the bottleneck is?
The CPU is a fraction of one core, bitcoin's transaction fees have been at times more than the cost of hard drive space to store the entire chain, and only servers even need to sync chains in the first place.
Bitcoin is crippled to sell a second layer. If you look at its throughput, it is literally less than a dial up modem. The average block size is 700KB every 10 minutes. You can print base64 characters on a laser printer and get more data throughput on paper.
No one has ever been able to give me a credible answer here because it doesn't exist. The best anyone can do is gish gallop with unrelated nonsense hoping that other people who read their reply can't make sense of it.
This is one of the fundamental problems with blockchains: Local problems often lead to global consequences, requiring forks of the blockchain and/or high level intervention to maintain consistency or to roll back exploits. Here's the classic example:
Justice is never an option for me. I'm just an average middle class citizen. It's rigged against myself, telling from personal experience. If there's a risk for me to be defrauded, Justice is no recourse option. I'd rather avoid the risk in the first place.
The only DAO I've participated in was Bisq and it works just fine going on years now, resources get allocated for development and ops, plus the work done on marketing, documentation, etc. This is all paid for by trading fees on the exchange. Some people turn up and do dev work for one round, others participate for years.
Not sure what your threshold is for "interesting calculations" but running an entire tech business for years on end with no central governance or traditional corporate structure seems incredible to me. You can participate too if you wish, maybe try drive it into the ground for fun? Or maybe run a seed server with decent uptime and get paid for it instead?
Rather than theoretical putdowns based on some strange misconceptions of how this stuff works under the hood, that's a real life counter example.
Looks like Bisq is a decentralized exchange. You run the software and it automatically connects with others trying to trade the same pair of cryptocurrencies in the other direction. I got this from the FAQ. Presumably the DAO manages the decentralized exchange.
Pretty much this. It's a P2P trading platform that runs on a native Java GUI with seed server backends, people pay fees to trade on there, this goes into a consolidated funding pool under no ones control, stakeholders vote on paying contributors for new development/running the servers/etc.
Really anything can be applied for as a contribution, you can rock up right now and say you'll translate the docs into Esperanto for X amount and the community decides if that's worth paying out of the pool for this round, if rejected you can apply again next round, no hard feelings.
No one is in control, it's all decided communally with votes recorded onchain for each proposal and paid out automatically if they pass, they have coloured coins as the proxy for the votes (sort of like stock voting but digitally and with cryptographic signatures), those same coins are also what people pay for trading fees, making a closed loop between funding and advancing the DAO. If people trade less, there's less money for dev work, creating incentives for a range of stakeholders to collectively make proper choices and produce good results.
Never once have they raised money from speculators, no ico or anything. All funding has come from people using the product itself.
This is also my understanding of a DAO as a method of parceling out work and rewarding those who complete it. The overall value derived from all work within the community backs up the value of the reward offered. This is a "Sweat Equity" or perhaps "Sweat Debt" use of the DAO concept and has an appeal to small unfunded startup type initiatives who have an idea and clear work objectives but don't have deep pockets to reward talent at the outset. In this light I find DAOs to be a potential game changer.
> Really anything can be applied for as a contribution, you can rock up right now and say you'll translate the docs into Esperanto for X amount and the community decides if that's worth paying out of the pool for this round, if rejected you can apply again next round, no hard feelings.
Let's say the community decides it's worth paying for that. Does payment happen up front, or only upon completion of work? If the latter, who decides if the work meets the standard that was expected and thus is worth paying out for?
Uh, well, the ... that you elided provides the context for the slips of paper analogy. The article is not literally calling them slips of paper.
> The community holds internal discussions and then votes on decisions using the token, on apps such as Snapshot, the way one might slip a piece of paper into a cardboard box to elect a class president.
This is literally what shareholders do. It doesn’t make the analogy any less stupid. I don’t care what they call them. That’s not my issue. My issue is pretending like this mechanism is new and hasn’t existed for centuries.
A lot of friction, paperwork, time, lawyers involved. You can use a boilerplate DAO and raise millions because of a meme that takes off, and the shareholders are liquid immediately. For good or bad you must admit this is novel.
You can do exactly the same thing without regulation.
Regulation exists because the alternative is what’s happening. More than half of these are scams where people are running with the money. And the majority of the rest are people buying a copy of Dune thinking they now own the rights to it.
Do you have any statistics to back up your claims of “more than half”? It just sounds like baseless attacks and dang said to be productive in this convo.
With all due respect, the title says DAOs are “forging a new ecosystem”. My comment is taking direct issue with the core premise of TFA. How does this qualify as a generic flamewar?
You posted a shallow dismissal that didn't engage with anything interesting or specific in the article. Your comment simply reacted to a single phrase ("slips of paper"), snarkily jumped to an insinuation of authorial stupidity ("These are called...") and then dove into flamewar tropes ("How does this make it into..."). In the context of a classic flamewar topic like everything cryptocurrency-related, that's easily enough to restart the same old generic flamewar that we don't want here.
Btw, posting like that also breaks these site guidelines:
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."
"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize."
I wanted to build a joke NFT project with some friends, just to take a closer look at crypto since I never developed on it.
I need to say that there is some solid tech in that space but there are still some fundamental problems to be solved, structural problems, and I'm not seeing a solution. But we are not here to talk about it...
Reading about DAOs is funny because I really understand them now, after talking with those friends of mine who know nothing about tech and should have handled other parts of the project. I understand their meaning: 99% of the time they are a clever way of fooling people.
There is a lot of enthusiasm around crypto lately and some smart people, overhearing a lot of stuff (and fluff) they don't understand simply try to jump into the bandwagon. They are smart people in their lives but without tech knowledge they become the bigger fools when entering the crypto sphere.
But when you fool a smart person he will try to fall on his feet, he will never admit he got fooled so now he needs to fool someone else so to exit the game with lesser losses, or even gains if he's really smart... it's a weird variant of a Ponzi scheme and also an incredible social experiment.
One big difference is that your random uncle or sister-in-law can't just read about some trending startup and then semi-blindly invest a chunk of their life savings into it.
Financial regulations prevent the average nonexpert from making those kinds of risky investments in relatively unregulated companies - you have to qualify as an "accredited investor" (i.e. either someone with deep pockets or expertise in financial markets). Publicly traded companies and investment funds are open to anyone, but in exchange they're subject to all sorts of regulations about transparency and accounting rules to make it "safer" for the average Joe to invest in.
DAOs feel like they are really hoping to create an end run around all those financial protection laws.
I read the article twice: what are the quieter corners the headline promises? Almost all the examples were still pooling money to buy a thing, with two of those things being a single piece of real estate. And Friends with Benefits seems like a nice social group. Both great for those involved, but hardly a revolution
I am very interested in alternative coordination mechanisms, so I was really looking forward to the practical applications of the DAO mechanism outside of crypto-for-crypto, but still am not really seeing it. What am I missing?
haha now that you pointed it out, "quiet corners" are in the sub-headline and opening but...not the article itself. Most of the examples are loud -- like SPICE and Constitution.
I too am interested in alternative coordination mechanisms. I recommend hopping on the discord channels for these different projects and seeing what you can find. I've personally looked at Constitution, SPICE, and ENS. I would recommend diving into ENS, it's credible and they're working to manage development and budget. Journalists simply don't have the tools or support to dig into the level of detail that you probably want.
There's also some group in Colorado I forget the name of, they weren't in the article though. They bought up an acre of land and are trying to manage it as a group?
>I recommend hopping on the discord channels for these different projects
Yup. "Just do your reasearch". "Just hop onto the literally thousands of Discord channels inundated by random talk and you will definitely see the light!"
You'd think that by this time there would be something coherent coming out of these Discords, but no.
> Let me know what you find!
You're the one suggesting to dive in and finding something. You've also said you've already dived in. Apparently, you've found nothing.
The parent said they were interested in alternative coordination mechanisms. I pointed them to where to find more and how to approach it. This is how curiosity works. I'm not selling any "light". There's little glimmers spread across lots of projects, even the ones that completely fail or grapple with seemingly small issues.
ENS just turned the management of 300,000+ name service records over to a DAO. Now they are grappling with how to update registration prices when domains expire. They have a delegate and voting system for decision making. Registration on expiry prices for ENS itself is pretty boring so reading more about this is likely only interesting to someone curious about alternative coordination mechanisms.
> The parent said they were interested in alternative coordination mechanisms. I pointed them to where to find more
You pointed nowhere. You literally said, and I quote: "I recommend hopping on the discord channels for these different projects and seeing what you can find."
That is literally "hop onto the literally thousands of Discord channels inundated by random talk".
> This is how curiosity works.
Curiosity !== "you need to sift through mounds of shit in the hopes to find 'little glimmers spread across lots of projects'"
Had there been anything interesting or valuable in these "lots of projects", we'd have seen something coherent describing it.
> ENS just
> grappling with how to update registration prices
> have a delegate and voting system for decision making
And That is surely described in their docs in a coherent manner, or you have to join their Discord?
So I went ahead and did that.
#ens-faqs does not contain FAQs. It has a link to #server-faqs and "please don't fall for scams" pleas
#server-faqs has nothing on that. There are question about airdrops though, whatever that is
Maybe #dao-info contains that info? No
At this point I quit their Discord. Life is finite. Bullshit is infinite
> Registration on expiry prices for ENS itself is pretty boring so reading more about this is likely only interesting to someone curious about alternative coordination mechanisms.
It might be interesting to many people, if, you know, there was actual info on any of this.
"Join the Discords and sift through the to find the little glimmers!" ... "Here's a link to ... a Discourse instance".
So which is it? Join Discords? Or forums? Or?...
> To me this sounds like a fair description of curiosity!
It isn't. Bullshit is finite. Life is finite. There are so many things to satisfy one's curiosity that don't involve digging through bullshit.
The main reason you have to "just google it" to find any coherent info on crypto projects is that when you boil everything down to a single-page coherent description of what it is they are trying to do, it turns out it's just bullshit. That's why all these projects, consciously or not, never produce anything that someone can point to and say: go, read this. Almost invariably it's "just find it on Discord".
Even your example literally has nothing of value in that discussion. Original problem statement: "Now they are grappling with how to update registration prices when domains expire". There's literally no grappling in there. A regular community discussion with a voting mechanism that is happening hundreds of thousands of times a day all around the world. This is interesting? How?!
Re: grappling with how to update registration prices after an ENS domain expires --
Different stakeholders want the expiration auctions to work differently. For starters, there are the Devs, ENS owners, ENS users, domain speculators, token speculators, ENS newbies, and more.
Normally this would just be "devs and community", i.e. "we listened to the community and took suggestions". But with ENS anyone can own tokens and vote on what actually happens to the protocol.
There's discussions happening on Discord, in the forum, and twitter to figure out what to do. Then there's another layer where token owners choose delegates and those delegates vote.
It's exciting to see this kind of structure come together, where the friction is, and what ultimately gets built. It's unlikely this specific DAO will succeed, but part of it will work and the model will improve. Imagine a world where this works and all stakeholders play a role in how Twitter, Spotify, or even HackerNews change. Super interesting to me. Understand that the docs and UI for all of this needs a lot of work so that others can join in.
The best thing about these are the rapid iterations towards something better for all participants.
Many of these DAOs have components to them that people now understand werent good to participate in, and people are more discerning towards certain behaviors and features. For example, rebasing with high APYs should be for entertainment purposes only. But DAOs dont need that, and many just advertising liquidity bootstrapping events, without the rebasing component now.
While the protocol-owned-liquidity desire and implementation stays. People find it much better to trade liquidity for discounted tokens, than to risk having an illiquid asset, or find it better than renting liquidity with farming.
These evolutions occur in weeks and are immediately applicable each time.
DAOs are a bit fluid, even evasive, in definition but there are plenty out there (e.g. VitaDAO) which essentially function as an alternative organizational structure to traditional corporations. To function outside the crypto space (or really legally at all), they have to at least create shell LLCs which are governed by DAO decisions. Very few DAOs seem to get that far and instead choose to operate in the greyzone. As the space matures, I think we'll start to see a few large corporations which use on-chain voting in place of shareholding meetings. Whether this will otherwise cause any meaningful differences in how companies operate remains to be seen.
Thanks that's helpful context. So what you're saying is ultimately DAOs are about governance of traditional entities. So if there isn't a traditional entity at the top yet, it needs to be on the roadmap or the whole thing is a bunch of puffery.
I've seen a bunch of DAO concepts that are fundamentally "hey let's make currencies and securities". It's like "uh, remember all the ICO stuff? that didn't work".
Excited to see examples of DAOs that do connect to augment traditional governance structures.
I think a few DAOs are so divorced from physical concerns that they can remain on the internet and direct resources there without needing a corporate shell.
But, as soon as money flows into the real world, they will need to figure out how to create and interface with traditional entities, or...like you said, it's very ICO-like.
It's not just the voting mechanism, it's also the crowd-raised treasury and culture of dev-centric leadership and internet community governance. People seem to like pooling money in this way, even if it seems silly you probably can't stop them from wedding this model to LLCs and stepping more solidly into the legal framework of corporations.
I'm hungry for more analysis of DAOs. This article covers a nice set of ones including a few I hadn't heard of.
For anyone who gets interested in one of these concepts, I recommend finding the group's Discord and popping in to ask a few questions yourself.
However the depth of the article wasn't satisfying. Regarding SPICE DAO:
> "The group’s plan was to produce its own version of the film, with creative decisions voted on by the token’s holders."
From having dug into the SPICE DAO's Discord, I'm surprised this is what the journalist led with. It's an intellectually dishonest take on what the group was trying to do. Having poked around a bit, the people leading the DAO clearly understand intellectual property and were buying the book as something of a parallel project to getting licenses. But there seems to be a big push to paint them as complete idiots. Not sure why though. Maybe they are complete idiots, but not from what I've seen.
From my limited experiences with DAOs, they're not a magical solution to anything, and it will take time to figure out exactly what they're useful for. Nonprofits, hackerspaces, and corporations are all entities that work on mass coordination of incentives, resources, and labor. It's all hard work. DAOs may offer a new toolkit for this type of coordination, but they're unlikely to be a panacea. I am deeply curious to learn which problems this toolkit turns out to solve.
Edit: oh check out Orange DAO, mentioned elsewhere in this thread
> For anyone who gets interested in one of these concepts, I recommend finding the group's Discord and popping in to ask a few questions yourself.
Yup. "Just join the thousands of Discord channels".
How about: these scams and borderline scams actually produce some coherent information and put it up on their sites, and not expect every person to seek out their Discord channels and ask them questions?
> But there seems to be a big push to paint them as complete idiots. Not sure why though.
Because of what they actually do and say outside the Discords. If they weren't idiots, they would actually have a proper explanation of what it is they are trying to do, and actual roadmap on how to get there, and why they needed to blow 3 million dollars on a book if they want to "produce an original series".
> oh check out Orange DAO, mentioned elsewhere in this thread
And how exactly do you propose we check it out? You mean "Orange Protocol" which is a centralised aggregation service that pinky swears it will run a DAO at some unspecified point in the future?
Well, I stumbled and saw a few social impact DAO. I like them and so invested very tiny amounts to just be part of them. Then, I introduced the story to my team for an initiative that we were planning. We want it to be a DAO to get others involved, and make it socially viable. We are pretty technical but not DAO technical. Unfortunately, no one came, including those who came to me and I invested in them.
Now, I’m not sure if it makes sense to try to bridge the physical world happening to a digital heavy concept of DAO.
That's a beautiful initiative and you seem a nice person, could you explain why it needs to be a DAO?
I read all your site twice and I cannot find anything that make it necessary for your org to be a DAO. What technical aspects of a DAO are necessary and why couldn't it simply be a non profit with a "donate here" and a "subscribe for a fee" and whatever else?
Are you running all your logic on chain o it is mostly off chain?
We have a broader idea brewing. So, the answer below will touch that and I’m sorry for not just focusing on just the tree planting part. This is a draft and please treat it as such. The final will make it to the site’s FAQ soon.
Here is the list of reasons we are doing a DAO as opposed to a
traditional donation model:
- Easier data sharing among organizations.
- Secure and auditable transactions enabling verifiable and trusted logs of transaction (monetary, carbon credits, monitoring events, donations).
- Decreased inefficiency for currency exchange rate and cross border transaction costs.
- Support for NFT and automatic calculation of carbon dividend.
- Easier reporting and analysis.
- Transparency in operations (which portion is going to what
organization and for what reason).
- Platform of choice for next generation of climate change advocates and supporters.
- Smart contracts enabling decentralized calculation of carbon offset for many daily activities (offset your emissions by planting and monitoring trees.
- Crypto mining is a great source of emissions, its way easier to plug our DAO into the existing networks to calculate and offset transaction emissions in a user friendly way.
- Blockchain allows for more secure anonymous donations which can be essential for some contributors.
I totally get some of your points, but I am sorry to say that most aren't quite true.
> Easier data sharing among organizations
It is more complex than pulling that data from a random DB or API.
> Decreased inefficiency for currency exchange rate and cross border transaction costs
Since most people need to buy crypto currencies with fiat they need to pay for that conversion, then they need to pay for the transaction, then you need to pay again to send that crypto to the tree planting folks and then again they need to turn in into fiat.
It would be far easier and less expensive for you to handle everything in USD or EUR.
> Easier reporting and analysis
Same as the other point, you can do everything pretty simply with any DB and some lines of code.
> Platform of choice for next generation of climate change advocates and supporters
This is hardly a point
> Smart contracts enabling decentralized calculation of carbon offset for many daily activities
Computational power of smart contracts is incredibly limited and HIGHLY energy intensive. There is actually no good reason to perform those computations on a decentralized network. It would also be very expensive, much more than any other alternative.
> Crypto mining is a great source of emissions, its way easier to plug our DAO into the existing networks to calculate and offset transaction emissions in a user friendly way
That actually sounds as a counter point.
So... man, it is really less impactful on the environment and also less expensive and less complex to open a non profit in a country with a stable fiat, open source your model and make all data public (except donors personal data, just give them a UUID).
Plus, charity is usually tax deductible almost anywhere, why would anyone want to donate anonymously? You can also accept cryptos as donations, that's not a problem, but you are more likely to lose contributions by not accepting fiat than the other way around.
That's why I said I can hardly see the point of being a DAO in your case.
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[ 3.6 ms ] story [ 230 ms ] threadAny DAO that wants to do anything of any meaningful complexity ends up registering as a Wyoming entity which isn't really any different than an LLC.
DAOs are an attempt to separate the crypto nouveau riche from their tokens.
You can achieve anything you want to from a DAO with a corporation plus a twitter poll or SurveyMonkey thing - except the issuance of unregistered blue-sky securities.
Anyways, what's going to get really interesting is when we inevitably have see some legal challenges around this. I strongly suspect we'll see some personal liability materialize and this is going to take a lot of the fun out of this new grift.
How would accept money from thousands of people without being public? How would those ownership stakes be easily transferred?
If DAO tokens do convey some ownership interest, then they'd have to be registered as securities - which is why DAOs are very clear that you get nothing but their appreciation in exchange for the tokens. In which case you'd sell them the same way you sell any other securities.
Reg A+ and Reg CF allow the sale of equity for crowdfunding contributions, btw. There are even some marketplaces that sprung up around them.
If a DAO token is a security, it does need to be registered: it either needs to be registered or have available an exemption from registration.
There are DAOs that try to fit within an exemption from registration. See the LAO, and it's offshoots, like Red DAO, Flamingo DAO, etc., which sell LLC interests to a limited number of accredited investors.
[0] https://medium.com/openlawofficial/the-lao-a-for-profit-limi... [1] https://www.flamingodao.xyz/
Ok, but that's just an LLC with extra steps no? If you're only accepting accredited investors then you're required to validate that they are accredited meaning that you have to pierce the veil of anonymity. It imposes legal control over the transfer of these tokens which means there's no reason whatsoever for them to be decentralized, permissionless and on the blockchain?
Accredited investors were always welcome to buy whatever toxic garbage they wanted.
I would say the core idea of a DAO is this: how can we organize a disparate group of people around a common goal, more easily than in the past?
Whether you think they are a joke or not, ConstitutionDAO, SpiceDAO (which I think is the worst example in this space given their lack of diligence or thought on IP issues), OrangeDAO, FlamingoDAO, etc., are all unique in that they have organized a disparate group of people more quickly than in the past, and enabled them to more efficiently work together towards a shared goal.
There are many ideas being explored:
1. Can we have better laws (like Wyoming is exploring) or regulations? 2. If the DAO is decentralized enough, are the tokens still (or should they be) a security? Are there better ways to regulate something like this globally? 3. How do you coordinate a disparate group of people? How should you let in new entrants, or weight votes? How should a DAO manage its treasury? 4. What happens if all voting proposals are public and verifiable on the blockchain? Is that good or bad?
At it's core, yes, I think you can say that a DAO is basically the idea of a corporation, except with most of the discussion on Discord and with on-chain voting, and plus some securities laws issues that are at best gray areas and at worst, in some cases, clear violations. But I think that is ignoring that something worthwhile might come out of that design space.
I disagree, because, the Great Depression.
They're not setting out to solve a limitation around business organization. You can do basically anything you want out of a Delaware LLC or C-corp except sell the shares to an un-accredited investor without registering them. There's even a light-weight way to do that with Reg CF and Reg A+.
You want public voting? Ok, that doesn't require a blockchain and it certainly doesn't require a whole new legal framework for organizing a business. Twitter has managed to have polls for years.
Most people actually trying to build a business of value aren't trying to reimagine the concept of a business.
By all means, go with God, find a better way to organize companies. If they land one one, I'll happily use it. But so far all I see is grift, crime and frankly, little else.
Also, it's possible to sell these investments to non US-persons under regulation S without bothering with the accredited investors.
>Most people actually trying to build a business of value aren't trying to reimagine the concept of a business.
Most people actually trying to build a business fail. It would be fallacious for me to imply that means not reimagining concept of business means likely failure, even though it is technically true.
Really curious - is it enough for another party to attest that they are accredited? Ie- could I set up a company selling verification services, saying “the person with this key is accredited, send the feds our way if they ask”? (Pure mental exercise, just honestly curious)
Not just that, what about transferring shares of a business requires the business to have tokens issued on a blockchain?
And how would you write an option on your ownership stake using conventional technology? That seems like it would be prohibitively hard.
How would you use your ownership as collateral in a loan? The illiquid nature of private stock may turn some lenders off. On a blockchain, the collateral can be part of the smart contract.
Many technological advances simply make already possible things easier. For instance, checks were around since the time of the Crusades. Functionally, checks transfer money from one account to another. We also have a postal service we can use to send checks almost anywhere in the world. So why do we have digital banking infrastructure and wire transfers?
The issues you describe are intentional encumbrances on the part of the company and corporate attorneys which they could stop at any time. You haven’t described how this model would change their minds. Changing their minds is the thing holding back what you desire not the technical limitations.
Even if Carta and Pulley didn't exist, this is still not a technical limitation of non-Blockchain systems, at all.
To date: few DAOs are actually selling equity…more of a donation with a fancy membership / receipt.
As equity requires a poking the veil of the DAO and setting up an LLC.
1. “No wireless. Less space than a Nomad. Lame”; from Slashdot, dismissing the new Apple iPod.
2. "For a Linux user, you can already build such a system yourself quite trivially by getting an FTP account, mounting it locally with curlftpfs, and then using SVN or CVS on the mounted filesystem. From Windows or Mac, this FTP account could be accessed through built-in software"; from HN, on the launch of Dropbox.
Yes, DAOs may be similar to corporations mixed with a SuveyMoney, and the above comments also have some truth to them. But all three entirely miss the forest for the trees, and miss that there are qualitative changes that make the impact of the new version much greater.
DAOs allow a disparate group of people to raise capital and execute towards a shared idea far faster and greater than was previously possible. That is a qualitative difference worth paying attention to.
And while you are correct that the legal frameworks backing DAOs currently have many problems, that is something that will change.
And for the HN skeptics, over 1,000 YC founders disagree with you: https://techcrunch.com/2022/01/24/hundreds-of-y-combinator-a...
It was a major contributor to the Great Depression.
So my question to you is: what has changed since last time we tried this? Why am I to believe that "this time is different."
[edit] Your suggestion that an idea cannot possibly be bad because 1000 startups are chasing it holds no water, it's an appeal to authority. Worse than appeal to authority: it's an appeal to the wisdom of crowds. Crowds of course are notorious for making great decisions. Hundreds of thousands of individual investors thought that sub-prime mortgage backed securities were a brilliant plan.
Your arguments can (and have been) those that applied to Uber or AirBnB; namely, that the only value they had was in skirting regulations, and that eventually the regulations catch up such that Uber or AirBnB is no better than the predecessor taxi and hotel industries. And I think there is certainly a lot of truth to that, but I also think this is normal human progress. As times change, we try something slightly different, and where old pain points arise again, we re-regulate accordingly. You are left with something that is indeed quite similar to the older industry, but with a fresh coat of pain and some improvements. You can dismiss that as entirely worthless, but I see it as normal and part of progress: two steps forward, one step back.
Similarly, I think having financial regulations that were created in 1933 be static forever is a mistake. As technology progresses, there can be room for changes. So I see DAOs and crypto in a similar light: yes, certain actors violate existing laws, but there is a freedom to explore a new design space, and then the regulators will catch up and reign it back to something more reasonable.
As for my link to OrangeDAO, it is not about 1,000 YC founders with Web3 startups, but 1,000 YC founders that are members of a DAO that seeks to invest and help other Web3 startups.
As for what's different, my answer would be scale. DAOs make it easier to coordinate large groups of people. Take a look at what OrangeDAO seeks to fund:
https://orangedao.notion.site/0516999b88534575bf759323f5e9fe...
Many of them are targeted towards corporate infrastructure; replacing traditional processes with software-first functions, which allow a lot of disparate people to function together more easily, and reduces the friction of "a group of people working together towards a common goal" from that of an existing corporation.
In the sale of blue-sky securities? Not a darn thing.
> As for what's different, my answer would be scale. DAOs make it easier to coordinate large groups of people. Take a look at what OrangeDAO seeks to fund.
Sounds like a VC fund. Just wait until you see the list of those projects!
> Many of them are targeted towards corporate infrastructure; replacing traditional processes with software-first functions, which allow a lot of disparate people to function together more easily, and reduces the friction of "a group of people working together towards a common goal" from that of an existing corporation.
So like, Zoom and GSuite? I'm not sure how "Waze for moving crypto assets" fulfills that goal.
On the other hand, ConstitutionDAO - the most noteworthy example to date, was a complete failure and hasn't even been able to handle refunds.
> that is something that will change.
"Talk is cheap. Show me the code."
The sheer incompetence/negligence/malice would be funny if it weren't so sad.
I'm familiar with this DAO, they have been advised by a competent IP lawyer before even bidding on the book. There is a crucial legal difference between derivative work, and work "inspired by" another.
[1]: https://twitter.com/TheSpiceDAO/status/1482404318347153413
edit: Thanks - that tweet doesn't inspire confidence. Why would you need to overbid on a sketchbook in order to make a show which is inspired by it? Why not just, you know, make the show...
Not by a screenshot of the tweet, but by the tweet itself. And it was rightfully ridiculed for it.
And now they are "producing an original series" and don't have the money for a writer's room? https://news.ycombinator.com/item?id=30046358
For three million dollars they could've created not just "a package with a powerpoint", but half of an animated series, probably.
Or how (the heck) did offers raise to almost three million dollars?
Orange DAO being completely separate from YC suggests this is a possibility. Imagine the year is 2030: Orange DAO has more assets under management than YC itself, and has proven greater returns for investors in both percentages and absolute dollar value.
And I am elected God Emperor of the Known Universe.
Here's an alternative: The year is 2030. Orange DAO is a distant memory, and cryptocurrencies have all gone to zero. YC continues to grow.
Anyone using ETH would presumably have been aware about the enormous fees involved.
To this day, it still trades for ~10X its initial value on Uniswap: https://info.uniswap.org/#/tokens/0x7a58c0be72be218b41c608b7...
Anyone who bought more than ~$50 of DAO tokens before the auction could stand to make a profit on the aftermarket even accounting for gas fees.
In case it needs to be said: this all seems crazy to me, but it is what it is.
this isnt like a ticketmaster convenience fee, everything on that network costs that much
Transparency is the next fight for the workers and ideas like this could prove very valuable
Curiosity withers under repetition: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
Diffs are what's interesting: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
https://news.ycombinator.com/newsguidelines.html
Those efforts were largely focused on antitrust regulation, which is a different problem than the sorts of blue-sky securities problems that are more common in today's crypto space. But the reason I'm recommending reading about the earlier antitrust stuff, as opposed to the securities regulations that began to emerge a few decades later (which is more superficially topical), is that it marked the beginning of a phase transition in how the American public viewed the relationship between government and business. I think we're in the early part of another such phase transition today. Without the antitrust regulations that preceded them, subsequent securities regulations would likely have had a much steeper hill to climb in the court of public opinion.
Obviously we aren't going to be able to just copy+paste yesterday's regulations onto every newly emerging trend. But I think we can definitely draw lessons from how earlier types of regulations emerged and the ways that the government's relationship with capital interests was adjusted over time.
There were also downsides to the new regulations (like the coopting of the definition of "trust" to include unions as a means of curtailing the power of labor). Those are valuable lessons, too.
I say this as someone who is relatively pessimistic about the value that these new crypto constructs are going to be able to provide over the long term, but I'd make the same argument to crypto optimists, as well.
Apologies to the non-US folks; other countries have their own regulatory histories, some of which were well ahead of the times compared to America. But I'm less familiar with those.
Food for thought.
No dark pools, no naked shorts, public ledgers are commonplace, no brokerage license required to participate directly, the list goes on and on.
Equality is not equity, in case there was any confusion (maybe there wasn't) but crypto has incredibly strong claims to equality in money.
These folks are being smashed by inflation. They're getting poorer everyday. We have to figure out how to allow them to quickly escape this rat race through a non-inflationary currency.
And into a rat race of "how much can you HODL and get rich quick through scams and/or currency trading"
There is no other source. If there was, crypto proponents would actually provide one.
As it stands, though, there are exactly three types of crypto projects:
- scams (the absolute vast majority)
- can be and have been implemented in a better, more efficient, and more scalable way without blockchain. And as such, are borderline scams
- circular. The vast majority of "DeFi" which mostly exists to rotate and speculate on cryptocurrencies
And there are exactly two types of people in the crypto space:
- people who know exactly what's up
- gullible fools
- Ones who look at them as tools that can be used for good or evil, just like anything else
- The cynical ones
Fiat currencies are a scam as well. Crypto isn't a scam inherently, scams exist because there's too many gullible and greedy people.
But Fiat is designed to be a scam. A few folks control the supply and effectively steal from everyone when they increase it.
You cannot arruficially increase supply of most crypto.
We need to stop thinking about "how much is crypto X is worth in dollars" and actually cut the dollar out, let people buy everyday needs directly with crypto.
And so you will have the ultra-rich who've hoarded the coins at the very beginning, and the rest, who will be getting smaller and smaller scraps.
Whoever actually serves society and earns coins for their service will keep their value in the long run. In one generation, or less, it will be possible to ascend from a poor level.
Just like it was possibke and happened all the time earlier, when currencies were pegged to non-inflationary assets, like the gold.
You're literally describing cryptocurrencies
> They cab increase their gains by 10%, but it will be taken out from them with little effort.
Gas fees
> Whoever actually serves society and earns coins for their service will keep their value in the long run.
Ahahahha, no.
> Just like it was possibke and happened all the time earlier, when currencies were pegged to non-inflationary assets, like the gold.
Yeah, we all know about the incredible rags-to-riches stories en masse in the "before time". Which are those, exactly?
Seems to me the issue isn’t inflation it’s lack of wage growth, and with proper wage growth, far more people would have been able to benefit from the market growth we’ve had.
As such, I wouldn't be so sure that cryptocurrencies will only exacerbate inequality. "Free markets" often required a central entity to draft and enforce laws, giving this central entity power and incentives to favor certain market participants, by selectively applying or changing the rules. Cryptocurrencies could bring about actual free markets in places where there weren't before, by autonomously codifying and enforcing laws.
[1]: https://www.federalreserve.gov/econres/notes/feds-notes/weal...
> Despite the fall in equity markets that drove a sharp decline in wealth in 2020q1, equity prices rebounded quickly after the Federal Reserve, U.S. Treasury, and Congress took steps to stabilize financial markets and the economy, and households gained over $18 trillion in wealth since the beginning of 2020. This 17% increase over 2019q4 was driven by asset accumulation much more than by debt paydown. Further, asset-price increases were the dominant source of wealth accumulation, accounting for nearly 80%.
[2]: https://theconversation.com/global-inequality-may-be-falling..., https://www.un.org/en/un75/inequality-bridging-divide
This is no failure. It's designed for that.
Aside, notaries where I come from are extremely expensive and inefficient. I'd choose a blockchain in a split second if I could, for anything requiring human notaries now.
We’ve been hearing this for basically as long as cryptocurrencies have been around.
I suspect we will see a currency that can do decent throughput, but I think it will require advances in the underlying theory for that to happen and that’s a few years away.
The only reason people think it's a problem is because bitcoin and ethereum have limited themselves so much.
https://fs.blog/chestertons-fence/
Surely the people who design the protocols aren't intentionally sabotaging the usefulness of the blockchain with these limits? If the limits are raised, what problems are introduced, and what advances are needed to avoid them?
It already works to have large blocks, it always has. Why don't you tell me specifically and technically where you think the bottleneck is?
The CPU is a fraction of one core, bitcoin's transaction fees have been at times more than the cost of hard drive space to store the entire chain, and only servers even need to sync chains in the first place.
Bitcoin is crippled to sell a second layer. If you look at its throughput, it is literally less than a dial up modem. The average block size is 700KB every 10 minutes. You can print base64 characters on a laser printer and get more data throughput on paper.
No one has ever been able to give me a credible answer here because it doesn't exist. The best anyone can do is gish gallop with unrelated nonsense hoping that other people who read their reply can't make sense of it.
This is one of the fundamental problems with blockchains: Local problems often lead to global consequences, requiring forks of the blockchain and/or high level intervention to maintain consistency or to roll back exploits. Here's the classic example:
https://www.coindesk.com/learn/2016/06/25/understanding-the-...
'Don't write bugs' is not a viable strategy for software development.
Not sure what your threshold is for "interesting calculations" but running an entire tech business for years on end with no central governance or traditional corporate structure seems incredible to me. You can participate too if you wish, maybe try drive it into the ground for fun? Or maybe run a seed server with decent uptime and get paid for it instead?
Rather than theoretical putdowns based on some strange misconceptions of how this stuff works under the hood, that's a real life counter example.
https://bisq.network/dao/
Really anything can be applied for as a contribution, you can rock up right now and say you'll translate the docs into Esperanto for X amount and the community decides if that's worth paying out of the pool for this round, if rejected you can apply again next round, no hard feelings.
No one is in control, it's all decided communally with votes recorded onchain for each proposal and paid out automatically if they pass, they have coloured coins as the proxy for the votes (sort of like stock voting but digitally and with cryptographic signatures), those same coins are also what people pay for trading fees, making a closed loop between funding and advancing the DAO. If people trade less, there's less money for dev work, creating incentives for a range of stakeholders to collectively make proper choices and produce good results.
Never once have they raised money from speculators, no ico or anything. All funding has come from people using the product itself.
Let's say the community decides it's worth paying for that. Does payment happen up front, or only upon completion of work? If the latter, who decides if the work meets the standard that was expected and thus is worth paying out for?
> In an email, Bisq told Decrypt the platform doesn't use smart contracts "at least not in a commonly understood sense of Ethereum smart contracts."
The mechanism seems to be let's do all computation of the chains.
However the DAO can the notary's job more transparently and without corruption (real oversight of their activities is cheaper... heck, it's possible)
Entertainment
Community
And a fungible bearer asset that neither company shares or a PostGresQL spreadsheet could accomplish
> The community holds internal discussions and then votes on decisions using the token, on apps such as Snapshot, the way one might slip a piece of paper into a cardboard box to elect a class president.
Regulation exists because the alternative is what’s happening. More than half of these are scams where people are running with the money. And the majority of the rest are people buying a copy of Dune thinking they now own the rights to it.
This is exactly the state of securities issuance and trading a few hundred years ago.
https://news.ycombinator.com/newsguidelines.html
Btw, posting like that also breaks these site guidelines:
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."
"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize."
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful!
I need to say that there is some solid tech in that space but there are still some fundamental problems to be solved, structural problems, and I'm not seeing a solution. But we are not here to talk about it...
Reading about DAOs is funny because I really understand them now, after talking with those friends of mine who know nothing about tech and should have handled other parts of the project. I understand their meaning: 99% of the time they are a clever way of fooling people.
There is a lot of enthusiasm around crypto lately and some smart people, overhearing a lot of stuff (and fluff) they don't understand simply try to jump into the bandwagon. They are smart people in their lives but without tech knowledge they become the bigger fools when entering the crypto sphere.
But when you fool a smart person he will try to fall on his feet, he will never admit he got fooled so now he needs to fool someone else so to exit the game with lesser losses, or even gains if he's really smart... it's a weird variant of a Ponzi scheme and also an incredible social experiment.
My two cents.
edit: some language errors
and "crypto" with "startups".
Financial regulations prevent the average nonexpert from making those kinds of risky investments in relatively unregulated companies - you have to qualify as an "accredited investor" (i.e. either someone with deep pockets or expertise in financial markets). Publicly traded companies and investment funds are open to anyone, but in exchange they're subject to all sorts of regulations about transparency and accounting rules to make it "safer" for the average Joe to invest in.
DAOs feel like they are really hoping to create an end run around all those financial protection laws.
The SEC agrees with you!
I am very interested in alternative coordination mechanisms, so I was really looking forward to the practical applications of the DAO mechanism outside of crypto-for-crypto, but still am not really seeing it. What am I missing?
I too am interested in alternative coordination mechanisms. I recommend hopping on the discord channels for these different projects and seeing what you can find. I've personally looked at Constitution, SPICE, and ENS. I would recommend diving into ENS, it's credible and they're working to manage development and budget. Journalists simply don't have the tools or support to dig into the level of detail that you probably want.
There's also some group in Colorado I forget the name of, they weren't in the article though. They bought up an acre of land and are trying to manage it as a group?
Let me know what you find!
Yup. "Just do your reasearch". "Just hop onto the literally thousands of Discord channels inundated by random talk and you will definitely see the light!"
You'd think that by this time there would be something coherent coming out of these Discords, but no.
> Let me know what you find!
You're the one suggesting to dive in and finding something. You've also said you've already dived in. Apparently, you've found nothing.
The parent said they were interested in alternative coordination mechanisms. I pointed them to where to find more and how to approach it. This is how curiosity works. I'm not selling any "light". There's little glimmers spread across lots of projects, even the ones that completely fail or grapple with seemingly small issues.
ENS just turned the management of 300,000+ name service records over to a DAO. Now they are grappling with how to update registration prices when domains expire. They have a delegate and voting system for decision making. Registration on expiry prices for ENS itself is pretty boring so reading more about this is likely only interesting to someone curious about alternative coordination mechanisms.
You pointed nowhere. You literally said, and I quote: "I recommend hopping on the discord channels for these different projects and seeing what you can find."
That is literally "hop onto the literally thousands of Discord channels inundated by random talk".
> This is how curiosity works.
Curiosity !== "you need to sift through mounds of shit in the hopes to find 'little glimmers spread across lots of projects'"
Had there been anything interesting or valuable in these "lots of projects", we'd have seen something coherent describing it.
> ENS just
> grappling with how to update registration prices
> have a delegate and voting system for decision making
And That is surely described in their docs in a coherent manner, or you have to join their Discord?
So I went ahead and did that.
#ens-faqs does not contain FAQs. It has a link to #server-faqs and "please don't fall for scams" pleas
#server-faqs has nothing on that. There are question about airdrops though, whatever that is
Maybe #dao-info contains that info? No
At this point I quit their Discord. Life is finite. Bullshit is infinite
> Registration on expiry prices for ENS itself is pretty boring so reading more about this is likely only interesting to someone curious about alternative coordination mechanisms.
It might be interesting to many people, if, you know, there was actual info on any of this.
> Curiosity !== "you need to sift through mounds of shit in the hopes to find 'little glimmers spread across lots of projects'"
To me this sounds like a fair description of curiosity! Reminds me of hacking with Arduino or something too. I have fun with it, anyway.
So which is it? Join Discords? Or forums? Or?...
> To me this sounds like a fair description of curiosity!
It isn't. Bullshit is finite. Life is finite. There are so many things to satisfy one's curiosity that don't involve digging through bullshit.
The main reason you have to "just google it" to find any coherent info on crypto projects is that when you boil everything down to a single-page coherent description of what it is they are trying to do, it turns out it's just bullshit. That's why all these projects, consciously or not, never produce anything that someone can point to and say: go, read this. Almost invariably it's "just find it on Discord".
A great example is in a sibling discussion mentioning Orange DAO: https://news.ycombinator.com/item?id=30133241
Even your example literally has nothing of value in that discussion. Original problem statement: "Now they are grappling with how to update registration prices when domains expire". There's literally no grappling in there. A regular community discussion with a voting mechanism that is happening hundreds of thousands of times a day all around the world. This is interesting? How?!
Different stakeholders want the expiration auctions to work differently. For starters, there are the Devs, ENS owners, ENS users, domain speculators, token speculators, ENS newbies, and more.
Normally this would just be "devs and community", i.e. "we listened to the community and took suggestions". But with ENS anyone can own tokens and vote on what actually happens to the protocol.
There's discussions happening on Discord, in the forum, and twitter to figure out what to do. Then there's another layer where token owners choose delegates and those delegates vote.
It's exciting to see this kind of structure come together, where the friction is, and what ultimately gets built. It's unlikely this specific DAO will succeed, but part of it will work and the model will improve. Imagine a world where this works and all stakeholders play a role in how Twitter, Spotify, or even HackerNews change. Super interesting to me. Understand that the docs and UI for all of this needs a lot of work so that others can join in.
Many of these DAOs have components to them that people now understand werent good to participate in, and people are more discerning towards certain behaviors and features. For example, rebasing with high APYs should be for entertainment purposes only. But DAOs dont need that, and many just advertising liquidity bootstrapping events, without the rebasing component now.
While the protocol-owned-liquidity desire and implementation stays. People find it much better to trade liquidity for discounted tokens, than to risk having an illiquid asset, or find it better than renting liquidity with farming.
These evolutions occur in weeks and are immediately applicable each time.
I've seen a bunch of DAO concepts that are fundamentally "hey let's make currencies and securities". It's like "uh, remember all the ICO stuff? that didn't work".
Excited to see examples of DAOs that do connect to augment traditional governance structures.
But, as soon as money flows into the real world, they will need to figure out how to create and interface with traditional entities, or...like you said, it's very ICO-like.
For anyone who gets interested in one of these concepts, I recommend finding the group's Discord and popping in to ask a few questions yourself.
However the depth of the article wasn't satisfying. Regarding SPICE DAO: > "The group’s plan was to produce its own version of the film, with creative decisions voted on by the token’s holders."
From having dug into the SPICE DAO's Discord, I'm surprised this is what the journalist led with. It's an intellectually dishonest take on what the group was trying to do. Having poked around a bit, the people leading the DAO clearly understand intellectual property and were buying the book as something of a parallel project to getting licenses. But there seems to be a big push to paint them as complete idiots. Not sure why though. Maybe they are complete idiots, but not from what I've seen.
From my limited experiences with DAOs, they're not a magical solution to anything, and it will take time to figure out exactly what they're useful for. Nonprofits, hackerspaces, and corporations are all entities that work on mass coordination of incentives, resources, and labor. It's all hard work. DAOs may offer a new toolkit for this type of coordination, but they're unlikely to be a panacea. I am deeply curious to learn which problems this toolkit turns out to solve.
Edit: oh check out Orange DAO, mentioned elsewhere in this thread
Yup. "Just join the thousands of Discord channels".
How about: these scams and borderline scams actually produce some coherent information and put it up on their sites, and not expect every person to seek out their Discord channels and ask them questions?
> But there seems to be a big push to paint them as complete idiots. Not sure why though.
Because of what they actually do and say outside the Discords. If they weren't idiots, they would actually have a proper explanation of what it is they are trying to do, and actual roadmap on how to get there, and why they needed to blow 3 million dollars on a book if they want to "produce an original series".
> oh check out Orange DAO, mentioned elsewhere in this thread
And how exactly do you propose we check it out? You mean "Orange Protocol" which is a centralised aggregation service that pinky swears it will run a DAO at some unspecified point in the future?
Just google it or something, the concept sounds neat. Sounds like you know more about it already. Not a DAO yet? Oh well.
"Just google it"
Do you realise how you sound?
Now, I’m not sure if it makes sense to try to bridge the physical world happening to a digital heavy concept of DAO.
We just wanted to plant trees, lots of trees (not guns) - https://treeslotsoftrees.org
It's also incredibly funny how you pretend to care about trees and ecology ... and using the single most ecology unfriendly tech on earth.
I read all your site twice and I cannot find anything that make it necessary for your org to be a DAO. What technical aspects of a DAO are necessary and why couldn't it simply be a non profit with a "donate here" and a "subscribe for a fee" and whatever else?
Are you running all your logic on chain o it is mostly off chain?
Thanks :)
That way I, or others interested in DAOs, can find our what aspects are especially promising to a project like this.
Here is the list of reasons we are doing a DAO as opposed to a traditional donation model:
- Easier data sharing among organizations.
- Secure and auditable transactions enabling verifiable and trusted logs of transaction (monetary, carbon credits, monitoring events, donations).
- Decreased inefficiency for currency exchange rate and cross border transaction costs.
- Support for NFT and automatic calculation of carbon dividend.
- Easier reporting and analysis.
- Transparency in operations (which portion is going to what organization and for what reason).
- Platform of choice for next generation of climate change advocates and supporters.
- Smart contracts enabling decentralized calculation of carbon offset for many daily activities (offset your emissions by planting and monitoring trees.
- Crypto mining is a great source of emissions, its way easier to plug our DAO into the existing networks to calculate and offset transaction emissions in a user friendly way.
- Blockchain allows for more secure anonymous donations which can be essential for some contributors.
> Easier data sharing among organizations
It is more complex than pulling that data from a random DB or API.
> Decreased inefficiency for currency exchange rate and cross border transaction costs
Since most people need to buy crypto currencies with fiat they need to pay for that conversion, then they need to pay for the transaction, then you need to pay again to send that crypto to the tree planting folks and then again they need to turn in into fiat.
It would be far easier and less expensive for you to handle everything in USD or EUR.
> Easier reporting and analysis
Same as the other point, you can do everything pretty simply with any DB and some lines of code.
> Platform of choice for next generation of climate change advocates and supporters
This is hardly a point
> Smart contracts enabling decentralized calculation of carbon offset for many daily activities
Computational power of smart contracts is incredibly limited and HIGHLY energy intensive. There is actually no good reason to perform those computations on a decentralized network. It would also be very expensive, much more than any other alternative.
> Crypto mining is a great source of emissions, its way easier to plug our DAO into the existing networks to calculate and offset transaction emissions in a user friendly way
That actually sounds as a counter point.
So... man, it is really less impactful on the environment and also less expensive and less complex to open a non profit in a country with a stable fiat, open source your model and make all data public (except donors personal data, just give them a UUID).
Plus, charity is usually tax deductible almost anywhere, why would anyone want to donate anonymously? You can also accept cryptos as donations, that's not a problem, but you are more likely to lose contributions by not accepting fiat than the other way around.
That's why I said I can hardly see the point of being a DAO in your case.
friesdao team make up: a coinbase employee, fast food franchise operators, registering in wyoming and reviewed by the dev of vfattools