Intro

Much has been said in Web3 circles that 2022 is “the year of the DAO”. And while the core ideas of a Decentralized Autonomous Organization are as old as on-chain governance, the recent growth of DAOs like Friends with Benefits, Olympus DAO, and even the late Constitution DAO have brought the attention of the industry to this new concept.

Myriad builders have started experimenting with DAOs and new governance structures to power social causes, scientific investment, and even charter cities. Nonetheless, there is a special category of DAOs that remains vastly unexplored. A category that, at first glance, may be dismissed as “only” a social DAO, but that in reality entails far more than that. It carries the opportunity to change the very concept of “community” in Web3, the responsibility to drive massive adoption of crypto across the globe, and the possibility to change even the very fabric of society itself.

This is the first essay in a series of three essays published by ATX DAO - the first and biggest City DAO in the world - bringing light to the movement of City DAOs. In this essay, we will be introducing the concept of a City DAO. In the remaining essays, we will be covering the long-term vision of the movement and, lastly, how the model that has worked so well in Austin can be replicated in other cities.

City DAOs

At its very core, a City DAO is a grassroots organization, bound to a given city, and dedicated to improving that city via crypto. The definition of a City DAO is beautifully simple (which, perhaps, is why grasping the magnitude of the movement is not trivial), but what emerges from it is where the true power lies.

City DAOs are not about crypto insomuch as they are about their cities. It is not about crypto “bros” and “sisters” coming together to make friends, it is about using blockchain technology to drive improvements to the cities these people love.

Objectively, this goal transpires in three main ways:

Community Building

Inevitably, when one thinks “community” in web3, one thinks of Discord. And while Discord is a great platform that has become the de-facto home for crypto communities, the globally distributed nature of these communities makes discord the only home for them. There is no extension of the community to the bar, the gym, the park, or the coffee shop. The synergies of IRL interactions don’t take place and, most importantly, the friendships made within the community lack depth.

Further, the risky nature of the crypto space makes the development of trust in the community incredibly hard, and without trust, there is no friendship. For in a world in which you don’t know who is trying to be your friend and who is trying to scam you, you give up the former to protect yourself from the latter. Trusting no one comes at the expense of deep relationship-building.

Web3 communities are then left longing for the next conference, the next hackathon, or the next global meetup to finally connect in real life. So people finally get to know each other’s real names, realize they look nothing like their monkey pfp, and awkwardly interact for a few days.

It is this very longing and the benefits of IRL connections that drive people in the industry to flock to the next “crypto cities”: Austin, Miami, Singapore, Tel Aviv, Vancouver, and so on. But being surrounded by crypto professionals in a “crypto city” does not necessarily mean that you are part of a community. You don’t feel the bonding that comes from “being in the battlefield” along with someone, working for the same goal, and with aligned incentives.

So this is what the current model of community in crypto looks like: An online community to which you belong, care for, and build with, but that you only see once so often; and an IRL network of “crypto professionals” in the city where you live.

A City DAO flips this model on its head and starts with an IRL-first, online-second model. By promoting events of all sizes, both for DAO members and non-members, City DAOs focus on both building community with the local crypto scene and also working towards the same goal, that being the improvement of their city.

Community members in web3, then, become true friends. You know their name, how they look, you’ve been to their house, you’ve seen beyond their crypto facets; you’ve had lunch, beers, coffee, you’ve worked out together, gone out together, and so on. Trust emerges for you know them as a human, not as pfp.

Many people may see this as antithetical to the ethos of anonymity in web3, but these two things need not be exclusive. Being a part of a City DAO does not mean you need to dox yourself in all other projects you are involved in, nor does it mean you need to share the full extent of your involvement in crypto with members of the community. It is just a matter of transparency; one shows up as a human to build human connections.

The IRL nature of City DAOs facilitates the creation of deep relationships with people working towards the same cause, they also promote synergy and opportunities for people involved in the community, and, lastly, they give the DAO a huge edge on efficiency and execution - but more on that later.

Education, Onboarding, and Project Development

As I said before, City DAOs are about their cities first, crypto second. Consequently, City DAOs are not for crypto bros (and sisters and non-binary folks), they are, ultimately, for the city and its millions of non-crypto people.

This puts on the shoulders of City DAOs the responsibility to educate and onboard the general public and push for the integration of crypto in the day-to-day life of the city. This goes from working with local artists to launch NFT campaigns, to working with local businesses to accept crypto payments, to everything in between.

The true scope of these projects with the local community will vary from city to city, depending on the culture, needs, and strengths of their community. This highlights a crucial point of City DAOs: they are a bottom-up, grassroots approach to the mass adoption of crypto. Rather than developing a product and expanding it to other communities in a traditional “top-down” approach, the city DAO movement makes each City DAO responsible for identifying the opportunities in their communities where crypto can be implemented for the greater good.

This is why the geographic bounds of a City DAO matter so much. No one understands the needs of a community better than its residents. So it should be the network of crypto professionals in this very city that drives the mass adoption of the technology in their communities, again, adjusting to their culture, needs, and strengths.

Naturally, this puts a City DAO en route of collision with a lot of people uneducated in or even actively against crypto. This is good, it is important, and these pushbacks from the general public must be taken seriously.

Most web3 communities nowadays are majestic examples of echo chambers. They are a congregation of people who have all drank the kool-aid of decentralization, enticed by and repeating the same ideas by Balaji, Vitalik, Szabo, Saylor, et al. And while there is value in talking to like-minded peers, this leads to confirmation bias and a lack of rationality in space.

So a City DAO must, first, listen. What is the community saying, why are they hesitant about crypto, and what are their concerns. These arguments must be heard earnestly, and not just to be refuted with “crypto education”, but rather to be taken seriously as areas of the industry that remain unaddressed. These arguments must be taken as a steward toward a sound, transparent, and broad implementation of crypto for the general public.

The way these projects and educational initiatives are objectively implemented will be covered in the third essay: “How to start a City DAO”. For now, the important thing to understand is that education and project implementation for a City DAO is not about shoving down the throat of millions of citizens the arguments of decentralization. It is about listening, taking counterarguments, needs and concerns seriously, steering the strategy accordingly, and then filling in gaps in knowledge in the general public as needed.

Policy Research and Advising

The City DAO movement is all about a grassroots approach to crypto. From community building, to mass adoption of crypto, and, lastly, crypto policy. As a City DAO continues to promote events, educate, and create projects with the local art and business scene, the DAO will naturally start to be seen in the city as a thought leader in crypto.

Here is where civic engagement on part of the DAO comes in. This is a gradual process that progresses from educating policymakers, to providing public testimony, to researching policy, and, finally, advising on it.

The exact way this transpires will vary from city to city, but it is important to highlight that the engagement in policy by a city DAO must not be political. A City DAO represents no particular political interest nor aligns itself with any given political party. A City DAO is a voice of reason, whose main interests are the interests of its city and community, and that is there to provide industry-specific expertise to policy-makers. City DAOs don’t lobby; they advocate for the city. City DAOs don’t do politics, they advise on policy. The steps ATX DAO has taken on this front that could serve as inspiration for other city DAOs will be covered in our third essay “How to start a City DAO”.

For now, the important thing to highlight is that it is essential for a City DAO to be involved in their local crypto policy decisions in a conscious and non-partisan way. We believe that, like anything else in crypto, crypto policy should also be bottom-up. A top-down approach to crypto policy, one that is removed from the peculiarities of the communities it will impact, will be net-negative for the space.

Again, nobody knows the needs and complexities of a community better than its residents. So it should be these very residents who help drive the policy-making process and adoption of crypto by local governments.

Getting Shit Done

Most DAOs face the challenge of efficiency. Without top-down orders dictating what needs to be done, finding alignment in strategy and transforming that into execution is a huge challenge.

Nonetheless, efficiency for a DAO - regardless of how good their governance structure is - can’t come if the DAO’s objective is not clear to all the members. And while the broad goal of a City DAO - to improve their city via crypto - is a good northstar, the specific “flavor” of this goal will vary from city to city. For ATX DAO, the goal is simple: To make Austin the Crypto Capital of the World.

But this need not be the goal of all City DAOs. For not all cities will have the combination of factors that make this possible for Austin, nor even the interest in doing so. Hence, each City DAO needs to find that crystal clear goal, and there should be not a single community member unaware of it.

Once the goal is clear as the unifying factor for all the members of the community, it then becomes a matter of getting shit done. At first, a decentralized organization is likely to be significantly less efficient than a centralized counterpart. But as the governance and leadership structures of the DAO improve, the organization can reach a state of “hydra-like” operation. Meaning that there are many seemingly unrelated projects being executed in parallel, each acting as an independent entity with their own leadership structure, but with no one member of the organization as a single point of failure.

Reaching the “hydra” stage for a DAO requires a robust governance structure and good leadership. But we believe that a City DAO has an efficiency advantage as it compares to other DAOs: IRL collaboration. IRL connections drive trust, which in turn reduces friction in collaboration, and facilitates independent parallel executions of initiatives. The way by which ATX DAO reached the “hydra” stage will be covered extensively in our “How to start a City DAO” essay.

The Magnitude of The Movement

A City DAO, taken individually, is but a single unit of something much bigger. It is certainly a cool concept capable of driving a lot of good to the cities it operates in, but it is not the revolutionary idea I alluded to at the beginning of this essay.

But when you take the areas of action of a City DAO - community building, education and onboarding, and policy advising - and replicate them in multiple cities across the globe, the result is a fundamental shift in the way these areas have been transpiring so far. The result is an IRL version of web3 communities, a grassroots mass adoption and education of crypto, and a bottom-up approach to crypto legislation.

And that is precisely the topic of our next essay…