DAO is a liberating force. Network states, crypto cities and start up nations will rise quickly. It’s what we’ve been waiting for a decade. Now things will accelerate. - Shervin Pishevar
I think we might be living in one of the most exciting times ever. You might have seen or heard about a group of 'internet friends' trying to buy the US constitution. In the past, there were about 500 original copies, but today only 11 remain. Of those 11, only 1 was still in the hands of a private owner. So someone came up with the genius idea to buy the US constitution to 'put it back in the hands of the people'.
A small group came together to start a DAO. They called it ConstitutionDAO, and communicated that they wanted to bring in at least $20M in funds to be able to compete in the Sotheby's auction. This was never been done before. Although DAOs have been a huge topic for people in the blockchain world, this was a unique experiment. The future is here.
What is a DAO
What is a DAO is a decentralized autonomous organization. It serves as a transparent governance vehicle for a group of members with the same end goals. The transparency that DAOs can serve, come from the fact that the rules and finances around the group, are recorded on the blockchain. Participation in a DAO can be represented by a token. This token is a form of ownership and gives members voting rights.
In 'The real decentralization of Cabo Verde', I wrote about the work of the Sokols group, who have been calling for political decentralization in the country. Using the example of Shapeshift and the recent regulatory developments in the state of Wyoming, I tried to explain how DAOs might even influence future politics, especially in local government.
In a modern, digital world where technology offers us the tools to align incentives for everyone involved, DAOs might be the perfect vehicle to run our cities, regions and islands. What we are already seeing is that cities are competing on different levels, in ways that did not exist a few years ago. When cities are run like (public) companies and not as governments, efficiency and transparency become two of the most important factors they are judged on.
The city of Miami has not transformed into a DAO (yet), but it is run like it is a business by Mayor Suarez. People now even refer to him as the 'CEO of the city'. With the creation of a CityCoin, and the promise to share the benefits of the crypto with the residents, Suarez is looking to align incentives for all Miami 'stakeholders'. Other will follow soon, and that's when it gets really interesting.
We recently witnessed another 'experiment' of a successfully formed DAO. An exclusive Wu Tang album, Once Upon a Time in Shaolin, was bought by a crypto investment collective. Most fans might have not been able to spend a couple of millions dollars for this purchase. But by coming together in a digital organization with a shared goal, it was possible for all these fans to become an owner of an exclusive, expensive good.
Buying the Constitution
As we've seen with the NFT boom of this past year, a part of the success of these 'movements' is about belonging and identity. It's about being part of something new and therefore exctiting. It makes an even stronger case for the future of these groups and subcultures. These are not just hot trends, but it's here to stay. The maturing blockchain space will only make it easier to build on.
Blockchain technology is helping us transitioning from the physical to the digital world, which was also pointed out by entrepreneur Alex Lieberman:
“The invaluable becomes accessible. Pool together knowledge, network and time.
On-ramp for joining the physical and digital. Collective ownership aligns incentives”.
For many, the attempt to buy the Constitution was about much more than the emerging technological possibilities. What's important is to feel like they are making a difference. Having a sense of purpose. Others love the idea of being part of a brand new revolution. The results of today's work work will only be visible for most people in the next few decades. DAOs will shape the way we rebuild our institutions, organizations and corporations.
“The purchase of the Constitution by a decentralized organization represents the evolution of one dominant governance structure to another. Almost 250 years after its inception, we see this as a symbolic passing of a torch, the mark of a new era,” said Graham Novak, a ConstitutionDAO contributor.
We're still early when it comes to DAOs. Although I'm extremely hopeful about what's to come, I see challenges as well. Human nature is what it is, and can be difficult to change. According to a participant, there are a few things that need to be addressed. Decisions were being made in private chats behind closed doors. The fact that admins control the (digital) keys, create an inner circle you don't want to see with an organization that stands for decentralization.
The same participant proposed a few solutions that would benefit the organization:
– Move to vote on admin roles
– Open-source all code
– Work with public discords (can be read-only)
– Decentralize control of the funds
It's something that you see with other projects as well. Whether it's a new blockchain or the creation of a DAO, you can't escape a certain amount of centralized control in the early stages. We've seen some examples of companies that started as (centralized) traditional businesses, transitioning into full decentralization. The latest to do it was ENS Domains, but getting to that point took them years.
The Diaspora
Cabo Verde is a country with an unbelievable power in the diaspora. A few million Cabo Verdeans live outside of the country, and just under 600.000 on the different islands of the archipelago. In the various countries where Cabo Verdeans live they are part of often strong communities. There are also large online communities on different platforms.
DAOs can be a fantastic solution for Cabo Verdeans who:
- Have a shared purpose
- Live in various parts of the world
- Love to represent and support their community
- Are interested in ownership and investing
The potential of the diaspora has always been an important subject in Cabo Verdean society. It's no secret that immigrants have been for the development of our country. Until now there was no good way for hundreds or thousands of people to pool (distributed) resources together. DAOs can be used as a collective to buy physical goods and co-op ownership.
I've said before that I believe that 'Tech is the new Tourism'. This is becoming even clearer now. Founding, buying and investing in companies will be so much easier. I'm not excluding tourism as a sector, since I think it will continue to grow. But technology is going to be the 'base layer' of it all. Communities coming together to implement ideas and philosophies of their own can be a catalyst for change on so many levels.
When it comes to regulation around DAOs, the state of Wyoming (US) is leading the way. It will be interesting to see what other US states and foreign countries are going to do next. As with BTC (and crypto in general), this could be another huge opportunity for Cabo Verde in its mission to become a part of the digital world.
I first wrote about the possible political implications of DAOs for our country months ago, but have only been studying the subject more in-depth in the past weeks. Still, seeing people like investor Qiao Wang sharing their view on DAOs is mind-blowing to me:
“The biggest DAOs in the world will be wealthier more powerful than the greatest superpowers in history. And that's the ultimate addressable market for DAOs, to become digitally native nations. Acquiring digital assets. Building digital economies. Battling for digital supremacy.”
It appears that there is practically no limit to what these organizations can become in the digital world of the future. Wang goes on to say: “Does the idea that the biggest DAOs will be bigger than nation-states sound crazy? To me, it doesn't. It's predicated on the idea that: 1) the digital economy will get far bigger than the physical economy. 2) DAOs transcend physical borders and jurisdictions.”
This chapter of ConstitutionDAO ends with hedge fund manager Ken Griffin buying the Constitution. The same Griffin who lost millions of dollars after another group of 'internet friends' decided to counter-trade him in the legendary GameStop saga.
The outcome is the least important part of this story. Maybe I'm too optimistic, but I feel that something has changed forever. Thanking the 17.437 (!) contributors, the Twitter account of ConstitutionDAO wrote: “We broke records for the largest crowdfund for a physical object and most money crowdfunded in 72h, which will of course, be refunded to everyone who participated.” It's crazy that all this money was moved around without a single bank being involved.
We'll look back to this in about 10 years as a historical happening. By that time I hope to see several Cabo Verdean community DAOs with large treasuries putting these resources to work. We can invest in our startups which leads to job creation and talent development initiatives. Or maybe we'll see a DAO supporting the first Cabo Verdean startup city. All of this could lead to future developments we can't even imagine at this point.
Read more here:
Project Roadmap
