I DAO’ed

December 21st, 2021

And we’re back!  Apologies for the short delay between newsletters.  As mentioned previously, I’m not sure what a consistent publishing schedule is going to look like for Building Blocks, but my hope is to generally try and post when I’m feeling inspired or when I have something that is truly worth saying.

I don’t want this to be a weird place where I write content just for the sake of content. And I definitely do not want to be wasting time and adding garbage to your inbox by writing a zillion general posts that add nothing other than to summarize a lot of existing writing that is already out there.

So, here I am, back with something to say, and that something is that I finally went ahead and DAO’ed, or rather I contributed to a DAO! The experience was great, and I think it’s worthwhile for me to illuminate the process of onboarding to a DAO, and to summarize some of what I learned from the experience. You can file this one mainly under documenting my journey, but I also hope that by going deep on how I went about getting involved, I might inspire some of you to take a few baby steps down the DAO and web3 path yourselves.

& for those who don’t yet know what a DAO is, head on back to the archives to catch yourself up before reading onwards…

Gotta love what you DAO, Chief!

After a few weeks of deep dive reading, learning and general purpose lurking around the Discord servers for many DAOs, both music and non-music related, I was feeling like it was time to find an opportunity to get truly involved with a DAO and make a real contribution. Serendipitously, my Twitter feed pointed me towards the Discord server for Water & Music, a respected, established music industry newsletter and research organization launched in 2016 by Cherie Hu, which went paid in 2019 and boasts over 1,500 members.

More recently, Cherie and the core W&M team have moved towards transitioning W&M to become a full-fledged DAO. I won’t go into all the technical details, but in short, this means building the W&M community through the creation of a community token ($STREAM), which is provided to persons who contribute to the community in some way. Essentially, this token becomes a form of equity in the community, with holders given some rights over community governance (how this all works is still being defined). The idea being that, as community members contribute to the community in a meaningful way, they might earn $STREAM tokens, making them equity-holders in the community, and providing them a say in the community’s growth and an incentive to continue building and contributing. As noted in the W&M Discord, “$STREAM will not have any inherent financial value at the outset; rather, it is meant to function as an on-chain crediting system for core supporters and contributors in our community.”

In transitioning to become a DAO, W&M took part in the Seed Club accelerator program, with the help of which they established a launch plan for the DAO and got to building. While some DAOs choose to launch a token first and build community around initial token holders, W&M worked in reverse, developing an initial community project around which to rally support and engagement, and which would serve as a place for new joiners to get involved, enter the community, and earn community tokens along the way. As their initial community project, the W&M team and growing community decided to launch a multi-prong collaborative, community research initiative, with the goal of producing a series of short research reports on the state of music and Web3. This project would make up Season 1 of the Water & Music DAO, with a “season” functioning as a bounded timeline for the W&M DAO community to develop and work on a given project. In the case of Water & Music, Season One ran from mid-October until the end of last week (December 17th).

A quick note: Bounded time ‘seasons’ are an accepted basic organizational method or primitive for DAOs, as they allow for strong, short-term planning, and for members and contributors to be able to make clear, credible short-term commitments to contributing to a given DAO or project.

I wasn’t around from the beginning of Season One (hell, I only jumped on board roughly two and a half weeks ago and still managed to contribute!), so am not able to speak to much of the early planning, thinking and research stages that took place, but do want to mention the wild ambitiousness of this entire project.  The idea that a nascent community of people (many of whom did not know one another previously) could come together over a three month period and realize not only one, but multiple extremely strong and detailed pieces of cohesive research is totally bananas.

The fruits of this very successful Season One project are now out in the world as the Water & Music $STREAM REPORT SEASON 1. To sum it up, over three months the W&M community, which included 40+ contributors with varied backgrounds (artists, fans, industry folks, academics, practitioners; and more) came together to produce five individual research reports, each exploring a different aspect of music and web3, including generative art NFTs; rights & ownership regimes around web3 and music; the state of music+web3 tooling for artists; web3 onboarding strategies for music fans; and fan sentiment towards music NFTs.

The reports took various approaches and methodologies, including the development and deployment of an original survey; individual artist interviews; qualitative data collection, annotation and analysis; Twitter-based data collection and visualization; and more. Again, I was not around for the full process, but the research was organized via clearly managed Discord server channels, and community members seemed to jump into tasks as they had the time and as their individual skillsets allowed. Members brought their expertise where they could, whether it was deep knowledge of the music industry and music rights regimes, contextual knowledge of the music and web3 world; excellent copyediting skills, visual design and data coding, or any number of other skill and/or knowledge sets.

I showed up relatively late in the game, as the teams behind the five separate research areas were finishing up data analysis and moving into the final writing process.  Nonetheless, the clear wayfinding messages posted by core W&M team members in the research channels on Discord allowed me to seamlessly start contributing, first by diving right into the primary source data that had already been collected and adding my own analysis.  I annotated a dataset of press releases from major artist NFT releases for the fan onboarding research group, while using the knowledge gained from my time working in artist management to add some annotations to a series of NFT contracts being analyzed by the contracts & royalties research team. Work begets community, and my initial contributions led to more engagement. I continued hanging around the server channels and, based on my press release annotations, was invited to contribute some thinking and writing to the final fan onboarding report. This final analysis and writing process was similarly collaborative. Over the past two weeks I spent time in multiple group research hangouts, working with other community members to establish the main findings of the initial fan onboarding research, and to turn these into a cohesive, practically oriented fan onboarding research report.

This process was not unlike other research projects I have been involved in: a group of smart folks coming together to share brainpower and produce a research product. However, the radical openness of the process was much different.

1)    Open and collaborative is better!

For one, the open and collaborative nature of the research process allowed for insights from community members that might otherwise have been left out of a more closed structure.  As I mentioned above, the community of contributors to W&M S1 was diverse, and included everyone from seasoned industry vets, to general purpose music fans, all with something meaningful and important to add to the research.  This isn’t all that surprising, as we know from previous work that collaborative research comes with massive benefits. Here’s a short bit from a research journal article that describes a few of the mechanisms for catalyzing these benefits:

“…science is most effective when researchers with expert knowledge in different areas collaborate on a project of overlapping interest. The overlap allows for common ground, while the respective areas of expertise cover a greater “surface area” of the possible knowledge brought to bear on a specific question. Whether it is across labs in your program, across areas in your department, or across disciplines, there is much to be gained by bridging the divide between isolated research silos.

-       The Benefits of Engaging in Collaborative Research Relationships

Seeing these principles come to life in practice was genuinely inspiring. Throughout the process of helping to bring the fan onboarding report to the finish line I saw a consistent openness from all team members to listen to and meaningfully engage with the ideas of other team members. And these ideas pretty much universally led to the final report being stronger and more thoughtful.

2)    Community incentives FTW!

Another major difference with this project is the incentive structure driving engagement and contributions from community members.  Individual contributors to the W&M S1 research reports were all, at base level, incentivized to contribute by the fact that, as contributors, they will receive some amount of W&M $STREAM tokens for their work.  However, as noted above, these tokens have no immediate financial value upon first being issued.  Over time they may gain economic value, as W&M DAO grows and continues to evolve and demonstrate its broader value to the music industry and world, but for the time being, the long term financial benefits of holding $STREAM tokens is unclear, and certainly doesn’t map to short term, liquid capital. (Note: All S1 contributors did receive an airdrop of a portion of ETH proceeds from the W&M S1 NFT sale (thanks, W&M team!), however this airdrop was not announced until very late in the S1 process, and so didn’t influence incentives).

While we can’t discount financial benefits completely from driving community participation, what the long-timeframe to seeing any economic benefits seems to suggest is that most contributors to W&M S1 showed up for the community-building and learning incentives, much more so than for the money. This clearly comes out if one spends any amount of time on the Water & Music Discord server, where questions about the tokenomics around $STREAM are few and far between, and helpful posts discussing basically every aspect of the music industry and how to make it better rule the threads.

Now, of course, long term sustained commitment and engagement to a project may ultimately come down to individuals’ available time and so community members may eventually want to see some form of financial return for their time investment. But, as a start-up community, what Water & Music has succeeded in doing to date is to drive community growth based on shared interests and values, and to use the strength of the growing community to create reflexivity and incentivize more community growth. When I first came into the W&M Discord server, for example, I was greeted by a hive of activity and ongoing projects being carried out by a fast growing group of really smart contributors. The learning and community connections emanating from the project alone were immediately enough to convince me to spend time contributing.

I don’t want to over-rely on my own W&M experience in making generalizations about DAOs (anecdote does not spell data!), but I would say that my short time spent contributing there has shown me that, though there are some legitimate concerns around the potential for token-based communities and DAO governance to be too economic- focused, that these concerns can be minimized by thoughtfully building a social and cultural community. I don’t believe that our brains have to be hardwired to pursue rational, economic self-interest, and season one of W&M has helped confirm that for me.

Happy Holidays!

And with that, it’s time for a bit of a break for the holiday season. I may write a post over the break, but also may not. Only time will tell!

I plan to spend my break continuing to read, learn and get involved in web3 and the world of DAOs.  I hope to begin my own learn to code journey, as well, with the goal being to gain enough basic skills to better navigate the world of dApps, smart contracts, and potentially even dabble in some front-end building. And of course, I’ll be looking forward to the arrival of 2022 and the start of Water & Music Season 2.

Happy holidays to all and stay safe out there!

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