Spatial News™ #015
This week we're Web3-heavy. We talk about startups, DAOs, NFTs, and more!
Welcome to issue 15 of Spatial News™! “If you realize that you have enough, you are truly rich.” -Lao Tzu in the Dao De Jing
“Future Founders will Build Entirely on Crypto Rails”
This is how Jason Yanowitz, Co-Founder of Blockworks, kicked off his LinkedIn post. He continues by listing how this could be done.
“1) Organize as a DAO
2) Fundraise with stables [stablecoins, that is]
3) Issue tokens as equity
4) Raise debt through DeFi
5) Bank with protocols
6) NFTs for early community”
Now, I’m no osteologist but this seems like a very interesting skeleton that I’d like to study closer (at a later time).
Last week in issue #014 we shared Charles Adkins’ point that every NFT project is, in essence, a startup. Similarly, DAOs (Decentralized Autonomous Organizations), mentioned above, have been called the “startups of the future”. They are also seen as an alternative to traditional companies, which are centralized (duh) and hierarchical, which means they have a C-suite, a CEO, a board of directors, and so forth.
Joakim Achrén (you’ve heard that name more than once in this newsletter) dropped a fascinating statement on LinkedIn about Web3’s relation to startups.
“Web3 enables everyone to be angel investors. Web 3 enables each startup to experience an IPO.”
Taken together this seems like the case whether one is an investor in NFTs or in DAOs. So 1) what are DAOs and 2) how do they relate to NFTs (other than what I just wrote)?
DAOs: Institutions of the Future
This helpful lecture covers more about what DAOs are, their origins, their current uses, and their potential applications in the future. Highly recommended for those not familiar with the concept.
In brief,
1) DAOs are web-native communities with a common mission whose rules are operated autonomously via the code of a smart contract.
2) The community members purchase tokens or NFTs (one way NFTs relate to DAOs) to own stake in the DAO.
3) The tokens allow members to participate in the organization’s governance and vote on new business proposals.
4) The community members pool their resources into a treasury to run the DAO’s operations and, of course, work towards their mission whether it’s to invest in traditional companies, invest in cultural assets like expensive art works or even NFTs (another way NFTs and DAOs can relate), or to buy a sports franchise.
5) There are other incentives to promote more participation in a DAO; for example, one could even gain a salary for working full-time for the org.
6) There are, of course, a number of risks and challenges. For one, the more tokens one has the more pull one has in a DAO. So while DAOs are described as “flat” organizations (as opposed to hierarchical ones), a Namazu in the pond makes it hard for the koi to swim. We can go into more of the issues in another issue.
Humans battling a Namazu
So after that short intro (unless you watched the 44-minute video) to DAOs (a topic I’d like to revisit again), let’s get back to the second question of how NFTs and DAOs relate because I think there might be more ways they coincide.
“Every NFT is a DAO in Theory”
Shares Priscilla Koukoui, Co-Founder at Power Women NFT. While this statement proved to be quite controversial (check the comments on her post), I actually reached a similar conclusion (or the reverse of it) on the same day she posted but for a different reason: the smart contract. Granted, my idea is most likely half baked (if not completely raw) but here goes: if smart contracts are what run both NFTs and DAOs then, in theory, couldn’t an entire DAO be bought and sold like an NFT?
In the future, when a Namazu asks a Leviathan what it has in its wallet, is this what its wallet will look like?
Ethereum: “Trojan Horse for Tyranny”?
Before we get into the Cryptoslate article, I’ll be lazy and share Wikipedia’s definition of a crypto wallet since it’s as good as any and that’s where we’ll begin.
“A crypto wallet is a device, physical medium, program or a service which stores the public and/or private keys… also offer[s] the functionality of encrypting and/or signing information [, which can] result in executing a smart contract, a cryptocurrency transaction, identification or legally signing a 'document'.”
So, MetaMask, the most popular crypto wallet, blocked users in Iran and Venezuela due to “legal compliance”. How can this be? Naturally, the community was not too pleased about this, “deceit over decentralization being a common theme”.
Well, it turns out that MetaMask and Infura, its gateway service, are both owned by Ethereum developer Consensys which is, in turn, owned by the likes of UBS, Mastercard, and JP Morgan, the latter which has quite an intricate relationship with Consensys.
Here is Keir Finlow-Bates, the “Blockchain Gandalf”, breaking down the possibility for Web3 censorship in this context:
“1/ Whenever you use a web3 website you are trading your control for the convenience they provide. As users in Iran and Venezuela found out a couple of days ago…
10/ You can get around any censorship by the above mentioned parties [OpenSea, MetaMask, and Infura being used as examples -Joh] through writing your own NFT marketplace, your own browser wallet, and running your own blockchain node [respectively]. But how many people have both the time and the skills to do that?”
I highly suggest you read Finlow-Bates’ entire Twitter feed on the topic to get a better understanding.
The Cryptoslate article above ends by asking,
“With JPMorgan deeply embedded in the Ethereum ecosystem, is it time to admit ETH isn’t run for our benefit?”
Decentralization meet Recentralization.
Thanks for joining us, Spatialists! You know what you are.
Joh, content (enough) with my content
Spatial8
P.S. We’re extending our Future Technologies Usage Survey 2022. Fill it out for a chance to get some random NFTs!