“Daoism is the practice of living in harmony with the Dao — ‘the Way’.”
Welcome to The DAOism. This is the way, padawan.
The DAOism #1: DAC Economy
In 2021 many DAOs began to emerge from a global digital renaissance led by blockchain technology. And already a new DAO apparatus is emerging from the Ethereum Layer 2 network MetisDAO — a Decentralized Autonomous Company, or #DAC. Before we dive into this new revolutionary way of organizing work, business, and value, let’s familiarize ourselves with Metis.
Metis
Metis, in Greek mythology, was the wife of Zeus and the symbol of wisdom. The Layer 2 blockchain Metis is an Optimistic Rollup technology and currently the fastest and cheapest L2 on Ethereum. Transactions are almost instant and only cost a few cents. Metis is also the most decentralized L2 and is striving to be completely decentralized in terms of tech and organizational management. Current Metis token holders can vote every week to decide on which projects the MetisDAO team will partner with and sponsor.
Metis is building the hub of Web3 — the DAC Economy. But to understand DACs and the DAC Economy, we must first familiarize ourselves with what a DAO is.
What is a DAO?
A #DAO is a decentralized autonomous organization. This means it has no central authority — no CEO. It is collectively owned and operated on a blockchain with a set of rules for governance and voting coded on a smart contract. Members are responsible for decision-making, contributions, and organizational management.
Are DAOs Actually Decentralized and Autonomous?
Generally, DAO is used as an umbrella term for both profit and nonprofit organizations that use blockchain technology to run their decentralized operation, although Vitalik originally bifurcated nonprofit and for profit blockchain entities as DAO and DAC respectively.
However, DAOs that use governance tokens are not truly decentralized since those who can purchase more tokens can gain more voting power leading to the social structure we are trying to overturn, plutocracy — the centralization of power through the accumulation of money.
On the other hand, DAOs that do not allot more voting power based on the amount of governance tokens owned or on the amount of time a member has been part of a DAO produces an unfair equality of voting power. But isn’t equality always fair? No. (Equity is fair, but that is a conversation for another day.) A brand new member with just one token can have the same amount of voting power as a long-time member of a DAO who owns many tokens.
Furthermore, governance tokens can be dumped and traded on the market no longer representing the value of an individual’s voting power, commitment, or contributions to a DAO. Their individual track record (or value) and their voting power do not stay with them. So in the current Web3 economy, decentralization is threatened by plutocracy and the absence of a container for an individual’s value within the Web3 economy.
Additionally, managerial and administrative tasks have not been fully automated enough to make DAOs operate as efficiently as they could.
This is where MetisDAO comes in with its DAC Economy infrastructure. So now let’s take a deeper dive into DACs.
What is a DAC?
A Decentralized Autonomous Company is a DAO that pays dividends, not rewards like in a nonprofit DAO. Moreover, a DAC is an individual-centric entity that automates an organization’s daily operations including payroll, task management, and other administrative duties which no longer need to be performed by humans. But what does individual-centric mean?
Individual-Centric
Individual-centric means that the organization and its tokens are no longer the containers of value, but rather the individual is the container of value. Individual-centric value is generative value as opposed to money — which is an imaginary zero-sum value that is amassed by only a small minority of people. This unequal accumulation of money also leads to an unequal accumulation of power. Centralized power is the primary product of our money economy.
To overcome the threats of money, plutocracy, and centralization, DACs will operate within a system that tracks individual-centric value through Reputation Power.
Reputation Power
Reputation Power (RP) within the DAC Economy is a generative, non-extractive, real value. In a DAC, the value created by the contributions of an individual do not remain only with the DAC but with the individual through the RP mechanism, which is recorded on a continuously programmable NFT. Recording one’s personal attributes and RP on this NFT make it the key to unlock unlimited possibilities for collaboration between the many individual-constituted worlds that live within the DAC Economy.
“A world where many worlds fit.” — Zapatistas
Trust
RP also allows for a trackable, immutable mechanism of trust that can open up more opportunities for collaboration.
Staking in a DAC is also used as a way to earn reputation points and increase a member’s voting power in the system. It ensures that members have something to lose if they harm the community or default on a collaboration.
Hence, RP is an emerging means to capture real value that is created through collaborations within DACs moving us beyond the limited, centralized, zero-sum value mechanism of money that our traditional economy is centered on.
The DAC Economy
Ultimately, Metis’ vision is to build a fair, transparent, and universal infrastructure to empower community members to collaborate in Web3 without worries. From funds management to governance and incentives, everything can be handled within a DAC in an autonomous and automated way. Metis has already previewed its framework to easily deploy a DAC, mint the DAC’s token, and start onboarding participants and orchestrating the day-to-day operations of the community.
Official release of its full DAC Economy infrastructure is on its way.
“It is time for blockchain to stop trying to be the next version of money, but surpassing money to be the manifestation of real value. It is time for blockchain to stop trying to be the next web (web 3) or Internet of dopamine exploitation, but becoming the true internet of connected individual minds.” — DAC Economy
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