The Secret Powers of DAOs
In October, Origami raised $6.2 million in funding, and Protocol Labs was one of the participants. Origami is a platform dedicated to helping organizations launch and develop DAOs.
Organizational support can be given in various aspects, such as funding, legitimacy support, the governance model, the governance framework, etc., to launch DAOs. It is also known as the DAO framework provider.
Is this round of Protocol Labs' investment in Origami a basic operation of casting a wide net across Web3 tracks?
Let’s listen to the author’s speculation and analysis.
Obviously, we have witnessed frequent negative events in the crypto market recently. This month, DCG’s Genesis was in a deep pandemic crisis after the FTX collapse. Last Friday, news broke out that BlockFi had laid off all of its employees and would soon declare bankruptcy. From the vigor to the decline, it only takes a few days or less than half a month.
The trigger of these crises may be a piece of news, a rumor, or a picture. But the underlying cause is the problem of operation management.
When the protagonists of the event are on the decline and their real business situations have not been exposed, these operators and managers still have a fluke mentality. Hiding, cheating and dragging are common tricks. Until the scandal broke, those who have the intention of remedying the situation may shout a slogan, while more people are not worried about the debt, and that abandoning the burden is always easier than bearing the burden.
This is a phenomenon that we have identified with all the companies that have gone bankrupt because of their own mismanagement.
In the case of FTX vortex, there were rumors from inside sources that the root cause of the insolvency was SBF misappropriating client funds to trade and then losing money.
Such a phenomenon can be seen in all the companies that have gone bankrupt due to their own operation management problems.
According to the rumors from inside sources, the root cause of FTX’s crash and insolvency is the loss of funds caused by SBF’s misappropriation of customers’ funds for trading.
Putting aside the external factors and looking at the internal factors, most of the crypto projects in the market adopt corporate operation and management. No matter what type of company is registered, it is difficult to escape from the problem of misjudgment, miscalculation, and omission caused by maximizing the influence of the decision-making body.
It is the inevitability of human nature.
Therefore, if there is a form of organization that can eliminate as much as possible the negative impacts of centralized decision-making, then at least it is highly possible to avoid this kind of internal risk throughout the entire organization life from establishment to dissolution.
DAO is a form and case that can be referenced but still needs to be refined.
In essence, it is a smart contract operated in a decentralized way, by using Blockchain technology to manage the organization.
This “code” approach to organizational trust and decision-making is likely to be more efficient and scientific than human decision-making.
In fact, currently, there are many industries adopting the DAO form of organization, such as VC, games, group buying, etc.
In the six steps of DAO governance, we do not completely abandon the participation of “individuals”, but let the organizational behavior and decision-making be in the framework of codes, not entirely in accordance with the will of a single individual or a certain party.
At present, due to unclear legal boundaries and other factors, DAO has not yet developed into a mainstream recognition and been taken as a form of organizational management. But in the future, with the popularization of smart contracts and a truly decentralized Internet, the thriving and prosperous DAOs will be realized.
Protocol Labs’ bet on Origami is probably aware of the unlimited potential of DAO in the future.
The Origami platform, before obtaining financing, already has in-depth cooperation with a number of organizations and various industries. In the DAO start-up and construction, it has formed a combination of Token issuance, compliance support, smart contracts, and other process-oriented services.
Spring is the season for planning and envisioning. On this first day of December, let’s look forward to spring’s arrival in this cold winter.
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