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Envisioning Future of DAOs
Recorded: July 7, 2023 Duration: 1:08:51Space Recording
Full Transcription
you.
I was there.
You know, I would take a FireEyes DAO, which is four people on a multi-sig over a, hey, we have 50,000 people on the Discord and we spend, you know, 5K a month just keeping them engaged, writing this community first thing.
But there's no money being made, you know, but we like, we like check the box on that, you know, and so far more interested in the design side.
Gotcha. So do you think, given the fact that the DAOs, although they are internet native organizations, but they're of course run by the people who are the participants, the holders of that particular venture.
So keeping that aspect into consideration, the human part of it, don't you think that certain degree of centralization is important in a decentralized organization, you know?
This is a great question. You know, decentralization and centralization, they're never absolute. They're always relative to a scope.
And I think that's something that we like lose our, lose perspective on. And so when someone says, oh, it's, it's really decentralized, you know, the, the, all the, the DAOs treasuries in, in only one multi-sig.
I've heard this. I've heard this. They're like, oh, it's so centralized. I'm like, well, I mean, if there's two people on the multi-sig, it is decentralized from the people standpoint.
Right. And you're like, well, okay. Well, okay. Would it be decentralized if they were 50 or 5,000 or if there's a governance contract and a hundred thousand. Right.
And then, and then, you know, I've heard people say, oh, I asked this too. I'm like, well, what if, what if the whole DAO is only on one chain though?
What if it's all on ETH mainnet? Is it centralized to Ethereum? You know? Um, or like, you know, you can say people, hey, most of the people are all located in one geographical region.
It's, it's centralized. I'm like, you know, we're just throwing these words around at some point. We're all centralized to planet earth.
You know, the point is like, what's the, what's the design? What is the, uh, what is the result we're trying to, um, you're trying to achieve, you know?
Um, and so, yeah, I think, uh, I think it just gets, uh, I think the conversation gets pretty silly, you know?
So centralization and a decentralized organization, the field is a double S sword. So I think that, that, that, that's a debate that will go on and on without finding a concrete answer to it.
Okay. No, no, but, but, but let me, you say, you said, Hey, it's some degree of centralization. I would say, check this out. There's this group called, uh, startup genome project. And what they do is just collect all kinds of data from startups and analyze it. And they put our report every year. And the first report they put out, I'm not sure it's, it's, if it's the same report now, I would suspect it is right.
But their number one mistake of startups was premature optimization. That is, they said, well, we can't use this simple, straightforward solution because what if we get a million users? We need to do this other thing. It's going to take two months to do that. So this is what they consistently did. This is over thousands of startups. Okay.
Okay. I think the, the, the number one mistake of people in, in web three is premature decentralization. They don't have a product. They don't have users. They're like, let's start a DAO, you know? Um, and so I'm for progressive, not presumptive decentralization.
All hail justice. Absolutely. That's beautifully put out there. And I think I'm just loving this entire debate in the conversation about centralization, but I think we got to move more ahead and talk about the fact you mentioned, of course, with startups, without any kind of organization, it's important that people find value in that. The value generation is of utmost importance.
So keeping that thing into picture, what do you think are the kind of transformative impact, uh, with the emergence of DAOs could have on the conventional business models?
Um, I would say the first is, and this was the first of all, I mean, I'll ask this, like, does anyone remember what the motivation for creating Ethereum was?
It was, it was Vitalik getting his, I think it was his World of Warcraft sword stolen. Okay. And then, so, so it's like the whole idea is like, we could create a system where no one can take your stuff, just like no one can take your Bitcoin because it's a digital scale. You have it. No one can take your, uh, uh, no one can rug you on the platform. So I think credible neutrality is the big one.
Two is the transparency. And this is kind of plays into the programmability. So even, even if you say, well, I can't get rugged except under this scenario. So for instance, I, most people would agree that even on decentralized social networks, that certain types of content that's shared actually should be suppressed.
And, and, and, and, and, and you, some, some level of moderation, you know, it shouldn't be the platform for human trafficking. Right. And so there's a transparency there. And so you, you can't get rugged, generally speaking. Okay. There's a credible neutrality. Um, there is transparency under these circumstances, uh, programmatically.
This is what you can be sure of, like a contract. And these together work to, um, to kind of create a, make a, from a, don't be evil to can't be evil.
Remember Google's don't be evil. And then in crypto, whether we could say can't be evil. Um, and then the other one I would say is democratizing investing.
I'm a huge fan of the Moloch governance contracts, um, created and maintained by Dow house. And one of their features I find just, I love is they have a two, uh, stakeholder token system where you have full shares and loot shares.
And I think this is a huge missing piece in DAOs because even if I come in and I say, Oh, I did some analysis. I think this DAO is doing really cool and stuff. If I want to come in as an investor, how do I do that?
Because if a single token voting, if you're a contributor, you're getting paid in that. Um, so you have to spend that in order to live.
But me as an investor, I can just come in and buy a bunch of it and now have, should I have the same say as someone who's actually doing the work? I don't think so. And with this distinction, if we introduce kind of more stakeholder asset classes into DAOs, then I think the money situation totally changes.
I can come in as an investor and say, I want to put, you know, 10,000 in this and this and this and trust the actual contributors to do the work. And I don't, I'm not conflating these things. And so, you know, the future is everyone can debate what they want about what's a security and what's not. The reality is at the end of the day, at the end of the day, you buy some claim on a system because you believe in it and you expect the value to go up.
Okay. And so by the, by natural human reasoning, that is a security. It's a claim on future value. And, um, the reality is this, however, it'll play out in the United States. I don't know. I don't care. The reality is that we're moving into a future where all these claims will be democratized and I don't have to be sitting on a million dollars just to invest on these new internet native organizations. You can go in and invest in any of them. So that's what I'm hoping for.
I appreciate all the points you mentioned, but I, again, got hooked on to this one point when you talked about transparency and of course, a certain degree of, uh, uh, you know, censoring certain content, which may or may not be beneficial to the audience.
But talking about decentralized, uh, I mean, this, uh, random decentralized social network, there are certain degree of regulation required out there. Now let's bring AI into this picture. What do you think, um, you know, AIs and MLs can do for the decentralized world and DAOs specifically?
Man, I love this because, um, this, the, what we have seen with chat GPT has rocked my world. I've, I've gone all the way from the spectrum of like, what am I going to do with my life? Because I, the things that I was doing, you know, imagine, imagine it's like you're, you're working in a, um,
VisiCal is like the first spreadsheet and like a large percentage of the stuff you were doing is now just done automatically.
I know. I've taken walks and I sit back and I'm like, what is my place in the world? When you see the capabilities and when you extend that out and say, what's this look like five years from now? It's almost impossible to do like career planning in any normal way of the past. When you think about what this looks like five years from now.
And so I've gone from there all the way to over feeling like a, like a, uh, you know, an ascended being coming down from space. When you actually begin to use it to your own benefit as a tool, right. And be going to navigate that stuff. I would say three things. I just want to leave with you that I think are really cool about the connection to these things is crypto created digital objects, digital physics.
In the real world. I can give you a rock. I no longer have the rock in the digital world. It didn't exist until Bitcoin. And now crypto crypto creates digital scarcity. I can give you something and I no longer have it.
But this is wild because prior to this, this is wild because prior to this, we just had an accounting system. It's like, Hey, you owe me and I owe you. It wasn't you. You didn't actually have the thing. Um, well, if, if we want to, um, kind of trade in this stuff, it's still the human beings driving it.
Uh, art of AI, LMS, they introduce kind of digital beings, their agents, they certainly will be seen more and more that way. And so when you have digital objects, digital synthetic agents, beings, you have two things now that these agents are not just, they're actually trading real world assets in your stead or in someone's stead.
Um, and then I think a third pillar on there that we're not seeing yet is the impact of, uh, augmented reality, where not only are there new, uh, synthetic agents and digital objects, we will step into that world with augmented reality, where we look around ourselves and see many of these objects in space and these beings.
And we're not just sitting, and we're not just sitting, and we're not just sitting, looking at a screen and we're seeing the first glimpses of that with, uh, Apple's, uh, Vision Pro.
You know, I love the, I love the synthetic agent terminology. I mean, it's pretty unique in that case.
So, uh, of course, that did answer about, um, uh, AIs and the digital objects and digital assets, of course.
Now, what, uh, coming from a do-a-dow perspective here, what degree of transparency do you think that AI could bring into the DAO ecosystem, or if it won't?
Um, there's a real cool analogy I think it's important for us to draw from.
So far, the main, um, messaging from DAO people has been like, we're going to eradicate all information asymmetry.
This is impossible.
It's not even desirable.
In fact, in an information economy, that's the very thing that is of value, that you can know something or think of something that someone else doesn't have.
And so it's impossible to eradicate that.
I think a better framing of it is to say there's a programmability and you have options of what is public and private.
Okay.
And we have this as well in zero knowledge technology.
Zero knowledge technology, ZK proofs all this stuff, ZK identity and all this allows you to prove something.
Therefore, it's programmable while not revealing the thing itself.
And so from the software engineering, I think there's a cool analogy between public and private functions where you can have computation that happens that's not public, but still on chain in some respects.
And you can have stuff that's, that's public that people, you know, public functions, people can hit and do things like this.
And so I think there's, um, there's something really neat there.
Like start talking more about the impact of, uh, homomorphic encryption where you can do like computation on encrypted data and get the results still encrypted while never having known what that data was.
And so, um, I think the, the, the, the, the conversation has to change there.
Sure.
Sure.
Well, I'm absolutely loving this entire conversation with justice guys, but we still have about a couple of more minutes left.
So in case you guys have any more questions for justice, feel free to raise your hands and send me a speaker invitation.
I'll put you right on spotlight once I'm through with my last couple of questions and some more, maybe.
Moving back at you, justice again, back again.
So in your, of course, we've answered about AIs and Thows.
Now, in your opinion, do you really think we truly are harnessing the full potential of transparency in blockchain organizations?
If yes, how so?
And if it's a no, what more is there to do?
No, not even close, really.
I mean, um, I mean, this, this, uh, this campaign that we tried to organize and promote last week about Dow data and transparency and data and stuff.
I don't even think we're, we're not even like, we're kind of still at the beach and the water is just kind of washing up and touching our toes.
It's like this.
We're not even into our knees yet.
You know, um, most, uh, Dow's are defined by how many Twitter followers, um, and then if they have like some of the popular influential people in them, like promoting what they're doing, um, you know, uh, they, many of them can just have occasional kind of events that raise some awareness, uh, pull a bunch of money from people and do something, auction off an NFT for some cause or something like this.
And so the actual, you know, how does the organization or work?
Honestly, man, I think a lot of people do.
They don't even have an interest in putting that on chain because we haven't made this distinction between public and private data and actually kind of, you know, unpacked what are crypto native business models.
And so I don't even, uh, I don't even think we're, uh, we're close to where we could and should be, but we're, you know, it's all about awareness and inching further.
We'll get there.
I mean, you know, um, if, if, if I've learned this cause I've been writing about like technology and blogging and science fiction and stuff for so many years, you're so in a hurry.
I would, Oh man, when we're going to get AI and then just one day you kind of get it, LLM available to everyone, the most advanced thing in the whole world.
If you want the best one, $20 a month, and then you walk around and you're like, okay, what's the point now?
We have the thing.
And so it's just being, being cool about where we're at right now while maintaining the press to the future, you know?
Sure.
Sure.
Now, since we're at the topic of on chain and I've seen that you've been writing extensively on these aspects, let's talk about evaluating a DAO success or failure.
Now, with this entire conversation, I understand that design is your basic thing to kind of, you know, figure out if it's a successful DAO or not.
But what do you perceive as the most critical limitations while relying solely on on chain data for evaluating a DAO's success or failure?
Yeah, I would say this, that DAOs are, you know, I think it's fair to ask the exact same question of any organization.
How do you evaluate it?
And I would say the question is always a one of qualitative and quantitative.
You always want both, but they're, they're, they're unavoidable.
Right.
And so, and, and, and secondly, I would say you always want to take what you know of the qualitative and try to inch it a little bit further into the quantitative.
And so, um, and so do we have some quantitative stuff on DAOs?
Yes, there's some, um, a lot of it is qualitative and maybe just marketing.
And so there's, you know, some improvements there that can happen.
Um, you know, without sidestepping the question, I would say probably maybe the, the threat to just being too, um, focus on on chain data is the ability to kind of fake things, you know, like, like it's a DAO equivalent of like wash trading, you know, where you can kind of simulate certain behaviors.
Um, you know, like for instance, like Apple, Apple can't like, it's a bit more difficult for Apple to fake iPhone sales, right?
There's huge bodies walking in order and spending the money.
But when you're building all of all the contracts and you can kind of, uh, do all this in a purely digital fashion, you can simulate like anything.
Right.
And so I would say massive psyops operations is the, is the threat.
And I would say it like this, you know, acceleration and programmability have consequences and you can't have good without the bad.
If you own everything programmable, great.
That also means you can program like and simulate like a million people using your application.
So of course we all understand what we understand by the qualitative insights, focusing on the, I'm so sorry, focusing on the quantitative insights to determine the DAO success or failure.
What are the other aspects?
I mean, that's the first part of the question of, about the qualitative insights.
And the second part is, are there aspects of the DAO's on-chain data that are more often than not underestimated and ignored, but could also, you know, offer some certain substantial insights into its long-term viability and growth?
Yeah.
Yeah.
The, the number one thing I like to look at, that's always a complete mystery is just the, I mean, revenue, just the basic, like, how does the DAO make money?
I mean, to the point it's, it's to the point now when we talk, I talk to projects and do this all day, every day, I'm real soon in the beginning of the conversation, like, well, how do you make money?
You know, um, and so just getting the ins and out, the in and out flows of a treasury is pretty cool is, is I would say start there.
And it's like this, we can't be so enamored with the tech that we think DAOs are like this crazy extraterrestrial non-human thinking.
These are just organizations on chain.
And so with any organization, like what's the first thing you would want to say, you would just say, how much do you spend?
How much are you making?
Show me the, the basic numbers.
And, um, that stuff is not real transparent.
Um, probably because a lot of DAOs are just, um, hoping that the, their native token, the value goes up based upon marketing.
Um, and then just spending that to kind of keep people around.
Absolutely.
So last, just two more questions, uh, before we leave the conversation, Justice.
How do you foresee the evolution of DAOs in the next five years?
And, uh, what changes do you believe are necessary for their success, barring the design part?
Of course, we know most of the designs are flawed, but, uh, what, what, what more is there?
So what's, what, what do DAOs look like in the next five years?
Man, that, that is, um, that's a deep question.
I would say, as with any technology, when it first comes out, we become like super enamored with the tech itself rather than like how to use it.
You know, um, businesses aren't like promoting the fact that they use like MongoDB, right?
They're not like, Hey, we're, you know, we're a Kubernetes.
You should come, come to our restaurant.
You know what I'm saying?
It's just kind of a weird, and then that's kind of what we do now.
We're like, Hey, the NFTs, the token standard, Hey, these are, you know, uh, account abstraction stuff.
And we're technologists.
So I understand that's how we talk, but I think in the next five years, we begin to talk more about like capabilities that are unleashed.
Um, so abstracting away the tech and more getting into, uh, the realm of digital objects where you own the thing.
Um, and then there's a secondary market for you to trade it.
And, uh, I suspect in the next five years, this will come into play as well with augmented reality where you can have a virtual object that you own.
No one else can know.
And you can put it somewhere and it stays in that place and no one can violate that.
It's so foreign and strange to our thinking, but this is, this is where it becomes.
We, we, we, we move into cyberspace and don't just use computers, this convergence of physicality and digital kind of realities.
And there will always be technologists hype on the tech, but, um, any same thing with like the, the virtual agents, the digital synthetic agents, um, you know, it'll be less about the technology and more about just like interacting with them as a, as a,
as a different type of, uh, capability as an extension of your desires.
Absolutely.
Absolutely.
So before I shut this, uh, this Twitter space, so with justice here, justice besides all of it, what is your personal goal and where do you see yourself for the next five years of this ecosystem doing what?
And what do you foresee, what is the foreseeable future for you?
You know, um, a lot of my motivation comes from science fiction, cyberpunk, technological singularity theories and stuff.
And I had, I had this dream many years ago that we could have this future accelerated future where you could have an idea in the morning, construct it and deploy it.
And basically have what amounts to an IPO, uh, worth millions of dollars before lunchtime.
Now, this sounds, this sounds crazy, but this is the type of, this is the type of, uh, vision that I've been working, that I've been thinking about working for.
And you can read books like Accelerando by Strauss and the demon series and stuff.
And ultimately it's not about, uh, money or attention or anything.
It's about creating this science fiction world that completely has completely captured my imagination.
Um, and so that's my, that's my hope.
I really enjoy talking about always where things can be and stretching the limits in writing.
Um, and, uh, but ultimately, you know, it'd be nice to come back to my developer roots and be able to build some of these things.
Cause I, there's, there's a gap there that becomes very difficult.
And so I have, I have high hopes that the combination of, uh, artificial agents, the low, no code movement, and kind of the immutable nature of this deployable intelligence on blockchain won't enable me to step back into a, to the place of a wizard in the creative realm, you know, the next, next decade, you know.
I so hope to be a part of that future of tomorrow, the one that you envision today, Chester.
I mean, that was super, super cool.
But in all honesty, Chester, I think this is, cyber has been, so far has been the best and a very insightful and enlightening conversations I've had though.
As a host in a Twitter space, given the fact that my lip knowledge with towels and decentralization is still very low, but I think talking with some brilliant minds in this arena just gives me more hope, more ideas, more knowledge.
And the conversation today with you has been mesmerizing, super crazy, and I think super fun.
So guys, if you're not following Chester, you know, what kind of man he is, what kind of things he writes and how deep he goes into it.
So give him a follow.
Once again, Chester, thank you so much for being a part of our space today.
It was an absolute pleasure to host you.
And to all my friends, as always, please remember, stay curious, stay informed, and stay connected in this ever-evolving world of blockchain and decentralization.
Until next time, guys, thank you so much.
On behalf of the DaoStruck family, I extend my heartfelt thanks to Tristice again.
This is your host, Saloni Chen, signing off with the day.
Thanks a ton, Justice.
Bye-bye, guys.
Have a good night.
Bye-bye.
