Our last DAO article was read by many people!
I'm happy to have played a part in raising the level of understanding of DAO in Japan, and leaving the overview of DAO to that article, I'd like to dig a little deeper into the ideological aspect this time.
It is true that blockchain technology, which tends to be described in terms of cryptocurrency, started to attract attention due to its half-speculative projects such as ICOs in the past and now DeFi and (Art) NFT.
However, I personally believe that it is more important to deepen our thinking about the potential of the core concept of "ownership" that realizes the system, rather than looking at it from a short-term perspective, for its essential and long-term development.
In thinking about the future, it is always effective to learn from the past, and in thinking about the transition from web2 to web3, I think the same analogy can be made with the origins of capitalism, and this time I would like to look back at the past a little and think about the future.
■Table of Contents
・Capitalism came with the end of absolute monarchy.
・The monopoly of giant tech companies is, so to speak, the absolute monarchy of the ・Middle Ages itself.
・Appropriate incentives create motivation.
・Companies in the web2 era that are incompatible with the token economy will peak out in the future.
・Challenge: Can extrinsic motivation through tokens be sustainable? Question.
I think one of the reasons why we are able to enjoy affluent days now is that the prevailing ideology in the world is capitalism.
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. wikipedia even defines it as a system that spread with the end of absolute monarchy in the 18th century, represented by the French Revolution, and took root with the Industrial Revolution.
This system was realized by extending the "right of private property," and it was revolutionary to be able to earn returns based on one's own efforts, which is commonplace today, but at the time, "equal returns depending on one's actions through ingenuity" was something revolutionary.
Until the Middle Ages, the world had many restrictions that neutralized the bloody efforts of individuals, such as land extortion, monopolization of patents by the state, and the guild system, and there was no structural mechanism to motivate people. By its very design, it was almost impossible for anyone to have the concept that hard work would yield monetary returns.
Later, with the assurance of "owning assets" obtained through the revolution, the capitalism that continues to this day has emerged, and as of 2022, it has reached an extreme level, with one company having a market capitalization of 340 trillion yen, and now the problem of monopoly and concentration of wealth in the private sector has become apparent.
And now, a few of these tech giants have become so powerful that they transcend national boundaries and hold the data of people all over the world in their hands. This is because data is the source of wealth, and monopoly is the advantage.
The behavioral data, content, and even identities that we generate every day through our online accounts are donations to these companies, and we are voluntarily supporting their commercial activities. Their essential ownership is not in our hands.
Isn't this structure exactly the same as the monarchy/feudalism of the Middle Ages?
There are many things we can learn from history, but this ideological shift from feudalism to capitalism seems to overlap with the current trend from the web2 era to web3.
People were not afraid of deprivation and restriction by the monarch, and they had incentives to invest their wealth to get returns, which motivated them to invent and improve their productivity, thus creating the capitalism we know today.
Imagine this. Unlike the Middle Ages, which was stagnant for more than 1,000 years, the world in which capitalism has taken hold has become an overwhelmingly better place in just 100 years or so.
If we can freely reinvest our online wealth of data (content) in our own ideas without restriction, we can at least create a better Internet than the one we have today.
Incentives are an important concept. The world today, so to speak, is a system that follows a common incentive protocol that says, "If you work hard, you can make money," and it works to bring about this wealth.
Tokens in web3 are the protocol that incentivizes all our activities. Tokens are like shares of stock in the digital world, guaranteeing ownership to individuals, but they also mean a world where appropriate efforts are rewarded, not only in the real world, but also in the anonymous digital one.
While there have been individuals such as YouTubers and TikTokers who have made efforts and gained influence in accordance with the platform's intentions (algorithms) and earned monetary returns, a world where people can earn returns by contributing in their own way will probably be a more diverse and livable world.
The creator economy is a zero-sum game between creators to see how they can take away the finite attention of the real audience, and I don't think the current system is sustainable in conjunction with the gig economy trend.
Platforms are creating a situation where all creators have to not only build but also maintain their own audience while constantly publishing new content. It's exhausting, and it's also causing mental problems, which I'll get into in more detail below.
※Currently, only the Japanese version is available.
As you can see in the article, this sarcasm from @LiJing, a prominent VC who was one of the earliest advocates of the creator economy concept, is really strong lol.
The biggest impact of the web2Internet may be the creators who do not exist because there is no business model, and the works that were never created.
With the right incentive protocols in place through blockchain technology, individuals will be able to directly connect with the world in their own unique way and have an unparalleled opportunity for upside return (through tokens). And it will come through the community of DAO.
As we become a decentralized society, web2 companies (especially tech giants like GAFAM) will hypothetically become less dominant and less influential (of course, they won't disappear, but they will fill in the gaps in web3).
I feel that we are at the peak of growth in 2022, and that there will be no more companies with market capitalization and no more individuals with assets in the future when DAO takes hold (the world will still grow, but its ubiquity will be corrected and the long tail will be more bottom-up). (The world will still grow, but its ubiquity will be corrected and the long tail will be more bottom-up.) (The world will still grow, but its ubiquity will be corrected and the long tail will be more bottom-up.
There are advantages and disadvantages to both working as an employee of a company and working with ownership of a project and guaranteed returns, but I think it is an irreversible trend that a certain percentage of people will shift to the latter. Of course, the former also has upside if you own shares or have an SO, but compared to tokens, I can't help but feel that the complexity of the process and the liquidity are prehistoric.
And just like the innovation dilemma itself, the larger the company, the more difficult it is to take a web3 approach (such as issuing tokens).
With existing users, employees, partners, and shareholders, creating a stakeholder community by issuing tokens similar to shares is an act of resetting the relationships that have been built up so far (e.g., losing the trust of old contributors), and it is an almost impossible option.
Discord's mere suggestion of the possibility of adding a cryptocurrency wallet feature was met with tremendous criticism. If you are reading this article, you are special, and cryptocurrency is still perceived as a minority and "suspicious" by the majority.
The bigger the company, the weaker it becomes in the web3 world, and the weaker it becomes compared to token native organizations. This is why the DAO, the organizational form of the web3 era, is said to be a reinvention of the stock company because such a shift can happen.
What will be created by a token-native community that believes in the future of cryptography may be a more open, flat, diverse, and friendly world for all; there will no longer be giant tech companies like in the web2 era, but there will be more human ways of living.
A society where people can earn a return on their contributions regardless of race, location, or education will undoubtedly bring great opportunities and wealth to people in developing countries. It's exciting to see the light shining on big ideas that have yet to be introduced to the world.
On the other hand, this concept is still in its infancy and many DAOs (=projects/products) are being created every day around the world.
In particular, our community would like to focus on the question of whether the extrinsic motivation of tokens can create a sustainable contribution to the project? This is the question we would like to focus on.
On a macro level, as mentioned above, the development of capitalism may provide the answer, but we need to focus on the operation of the DAO. Tokens are just a means of incentive, but the essential thing is the internal motivation for the mission of the DAO.
The ideal DAO is one where the community is aligned with one's own mission and incentives, where one can act autonomously without the need for permission from the members, and where one's own actions are tied to those of the community. This may be the ideal form, but there are still very few DAOs (even in their infancy) where such a win-win operation works completely and continuously.
In the next article, I would like to discuss how to increase the audience (awareness) of a project, increase engagement, and draw out retention (continuous contribution).
I'll be posting about the process on Twitter as well, so please follow me.
In the web3 world, your wallet will be open, and the tokens in it will be your credit and your assets.
How much have you contributed to which projects so far? What kind of projects do you believe in and invest in? How should we live in a world where our accumulated activities can be visualized in token numbers?
The future is now, when we can release the constraints of the real world and live in a community-first world where we can be ourselves. Please join us in the Discord community for a more substantive discussion.
I also have a podcast, which I update about twice a week. Please follow me on Twitter.