How to Build a More Sustainable DAO: Incentives, Reputation and Culture - Chance Du

uh hopefully you guys all have a great time in east denver uh this is my probably fourth stand in in east denver or maybe third time um the first time i was here i speak in 2018 and the crowd probably just one fourth of the people today so you can see how much it has been grown crypto in past four years um and uh so just like many of you guys when first time i come to east denver i really love the event it didn't feel like a conference it's more like a festival so i feel like it's fit for a crypto spirit um today my topic um is about dallas i don't know how much you know about dallas so today's talk will be assumed you already know a lot about dao's so i will not do a lot of like basic introductions so most are just my opinions thinking and based on their current um the market of the dow's development to make some suggestions a little bit of self-introduction my name is chance du i'm the founder of bluemond blumann is an early stage crypto fund that we invest in crypto infrastructures and application layers um before bluemound i founded coefficient ventures in 2017 is one of the earliest crypto venture fund we have portfolio companies today uh over um probably 40 percent of our portfolio company you might found one become multi-billion dollar companies back then we invested them most of them are just early stage they sit around startups some of portfolio companies including space mesh um r-wave tara blockchain orbit in numer ai those d5 pioneers um and my crypto recently announced by accreditation for my mask um and recently as bluemont we invested one dollar infrastructure project called panel and some of their larger proof privacy focused startups so that's my background okay let's get started okay so what is dao um i think it's pretty easy for you to find the definition uh just online just simple google search but there is a lot of misunderstanding in definitions because a lot of people will by default think um it's automatic execution of smart contracts it's thinking more advanced level but actually i i think the key word um is two but right now mostly we are more in the stage two which is i defined as the smart contract system could solve specific problems pretty well just like current ai artificial intelligence a lot of people think ai is automatic human intelligence level but the current uh stage of ai is not achieve that just like dow smart contract system we're start very early for dows so right now for current technology and infrastructure it's good to you use it down and smart contract to solve specific problems um in in your your projects for example like maker dao is a very beautiful example for um limited uh smart counter executions um so perfectly with a stablecoin system but we are not in the automatic um execution level of dow yet which means a lot of people imagine you can just pull a group of people together and people just automatically run things smoothly it's not gonna happen um that's we have this ideal imagination in 2016 in zidao but obviously didn't work we failed at the first month even a project before launch so that's my understanding of the dao so to understand the dao we need to understand a bit about history for me i understand things quite in a simple way so by understanding history you can just understanding through multiple projects together so in um in my view i think a bitcoin either first down even they didn't call itself a dow or it didn't have smart contract system but it's the true dow because there is no leader it's just wrong by himself even the neither didn't exist it still runs smoothly and grow bigger and bigger every year so i i think that's the true dial um and then the second is b shares a lot of people maybe don't know it was very old projects trying to build a decentralized e-commerce platform actually maker dao was initially trying to build on big share but it didn't work because their smart contract system is not sophisticated enough so when 2015 ethereum come out um make a dial it's possible so you can see so how important is in our space be infrastructure ready before we can build some validate applications and then obviously very famously a project called zidao just like many of you may be inspired by ethereum or bitcoin for me my personal story for crypto actually was a project called zidao um because when when i've heard about this project i i think it's a fantastic idea could solve the problem of globalization of coordinates of resources and humans so i saw the potentials there so i'm immediately intrigued to crypto space as a whole and i decided to do four four times during crypto in 2017 in next uh projects important in in ethereum um cryptos history it's called maker dao maker dot was actually conceptualized in 2014 but because i think the technology is not already at the time so it eventually launched in 2017 with the dao the dice launch another important project in 2017 of dao's is called gaycon the importance is about gaycon was established a model that um you know encouraged all the entrepreneurs in crypto in dell space that you build application of the use for ecosystem first and then launch token so git coins success validated a model that we will talk about later about how to build a sustainable dial model and obviously a very important dial molecule created by amin but some of the design i don't really fully agree with i will talk about later and then there is a very important in 2020 which we have a very big market crash when the central line the founder funding team decided to launch it dow so which means the founding team will be officially dedicate their centralized power to community um in 2020 which everybody can see today 2020 two years later decentralized still up running and even grow bigger so we can see in some sense its down model uh in some this exists and obviously it's a year of the dow 2021 constitution dial and fwb um and a big granddaughter was just launched recently um is this like speak speed it's a good to understand or should i slower okay thank you um so there are a lot of examples those are just a few that i think many people maybe know sit it out uh trying to put lines on chan um syndicate dao are trying to build an investment platform um protocol dao's private phone um beat dow is launched by big exchange and then assets that recently um those are just the sum of them i think in this year probably the hundreds even thousands now launched but quantity always not mean quality right um okay so in 2021 under 2020 because the infrastructure is mature in some sense so in part a lot of that will be created so a lot of people think the the dow is coming the year of doubt 2021 or 2022 it's not because rendon is because some of the infrastructure is ready uh that's a very universal truth in crypto space um if infrastructure ready and then could enable certain applications to be built upon just like a d5 um booming because there was 19 and 18 there's a lot of layer one be built at that time so after two three years developments those protocols ready to deploy by some application layers just similar to dows so we have discord we have multisig we have snapshot web zoom work from home all the infrastructure that empowers a future of work which um help the form of the daos um so 2021 really become the year that the dao become like the geeks utopia uh become the mainstream um i still remember 2018 i was talking about dao du dao representation a lot of many people interested i think my stage probably just have 20 people there so they don't interest not understand what's going on but 2021 as you can see you can talk to people on the street they might know something about the dao okay so in my view i think dell will go to multiple stages and we are mostly in a stage two median level so first level is very you know basic um i i would say that model applied to most of dallas today basically just pull money together right we buy uh like art right we buy uh constitutions we buy a golf course we buy a sports team so those are very simple just to pour money together it's basically a crowdfunding 2.0 so but the miners is maybe southern such dial launched but what will happen next right because southern team raised more than 10 million dollars what are you gonna use for the money right i would say after three years probably 90 percent of the team or died out you've never heard about them just like 2017 ico crazy area so i think they like two three years for those that raise money it's very crucial the leadership right does your governance model really work right that you really could trust community to govern if all right so reality to us is not always the case um and then the median level is the second level which applies a lot of d5 particles right like um maker dow or curve they do some you know manage for the particle level very core core infrastructure level or further level but still have tremendous involvement of off-chain activities and a centralized entity to govern it right still have a funding team today a lot of people are project called dow but i in my view i i didn't see much difference from tech startups the they are vc funding they are vc backed they have a core team that's from usually from the phone like facebook google those team so when i view them i most view them as star tech startups not really close to whatever you imagined called out so that's the median level i think the next level will get go to the upper level um but i think that level to achievement we need a lot of infrastructure be ready we will talk about next slides so that level will be um i would say in so many dials maker dial is most close to that level they have very decentralized team forming and they have the governance model governing the whole dye stable system and buyback or all the mechanisms works perfectly because actually it's the simple right i think i still believe the word the most important thing is still based on simplicity um so if you try to make governance model extremely complicated i don't think it's gonna work um so and the next final level will be um you know automatic state which where today we're understanding the dow it's in that level but i think that level achievement it's pretty far away from us just like the artificial intelligence right now ai could drive a car could pick up you know amazon packages could assembling cars but if you like ai to go to a date or go to hang out with your friends might have a big trouble there so there's a few category of dials today um there is one name that i put there it's called speak dao spec was in a traditional financial system uh special purpose uh acquisition um vehicles so basically put funds together for sp specific purpose so that i applied for today's some of the dao i call speak dao right um and the first of the grand style grand cell is very widely adopted in most of d5 protocols for example uni swap compound uh most of the d5 protocol have the grand style and adventure dell a lot of people trying to do a decentralized vc by building a venture dial the very famous example is zidao it's i um well i was inspired to um and tr a special mention to trtd dao is uh that i will mention last page that i gotta be active as contributor contribute to to be a decentralized venture now um you know and also there is a very unique um social of its benefits um they're just basically a a community right like people still didn't understand today why community is going to be valuable um i i think it's about people right as long as we have people you can do a lot of things so that's make it a value so it's not about you guided people i think the most difficult part is how could you keep those people engaged like always engaged active engaged or stay there long time it's not about attract people for one week or one day that's that's easy right just issues free tokens but it's difficult part is how do you make them to stay there for one year and actually spend time to work for your doubt that's a hard question but today style have a lot of issues as we can see i point out in the slides so most of dows is basically the cross source and funding so it's not a very sustainable to think about what's the real value behind it right after you buy those arts or constitutions or what are you going to do with it how could this extra data write it for go back to your protocol to you know increase your your protocol values over the long term that's not sure most of it does um and also very low tourist voting system today's style most of those voting system is very naive basically you have how much token you can decide which protocol is going it's just like you know you can imagine united states uh in some sense is true um the the most richest you know people in in the united united states could decide where which com policy this country got an issue that's terrible governance model but that's such reality today many of the governance models that we have um and also for for the lack of repetition protocols i think that's the most crucial part to build a very organic incentive model you need to have a way to track every contributors um how they contribute to your system to quantify them be able to give them token distribution to incentivize them i think there's a lot of team is working on it reputation system but there is not a valid one that is working yet so that's a huge opportunity there for entrepreneurs thinking about to launch infrastructure projects in dallas um and obviously many of them just weren't a coat of dowels not really dials basically it's just a token offering and they trying to use doubt to avoid risks and many founders you can hear today um deferred protocol or many founders they you know they decided to leave the projects without actually building a very reliable system or governance model for for for the project and then left that's not really a doubt and then they just quite doubt it i i think those behavior it's not gonna be sustainable in our space people will tell later on uh when when you call it down and then really you just give up the projects i don't want to name some of them projects so i think everybody will know so what it really leads down i think that the later still didn't change even we have this fancy name of dao it's simply just a tool for entrepreneurs to use the fundamental steel in the world universal works model is you find out problems and you find solutions and you build the solution to solve that problem that's worked for traditional startups that also work for crypto so it's not because you call it dow so it automatically you can solve everything so still focus on final problems in the crypto ecosystem or in a real world they're trying to use all the tools available to solve it that's how a great data be built so fundamentally human nature is still the same um people che you know looking for fearless looking for trust looking for inclusive and looking for opportunities that's why so many immigrants come to america because they come to find opportunities that's also why the last few decades the rise of united states because attract the the thailand coming here so i think there's a lot of things dao could learn from the government the model the history that how could create openness platform to attract um thailand from over the world that provide them a fair fearless trust and inclusive so that would be help create your organic our culture so why doubt matters because um i think it could make a tremendous impact to the world it can democratize opportunities given my personal story i was grew up in china um i think i have to make where i am today be become to states but i think the dao our future of dao in next five to ten years could enable a lot of kids or young um or you know talented people over the world without commenting states could access capital could access opportunities today there's could be there's a kid in africa know how to code they can directly work for unisrap or compound all the top tier tech startups in the crypto world without coming to silicon valley so i think that's very powerful and also i've many of you get i can say all of you have been through the terrible killer 19 situation um by watching the news i felt strongly that because right now all this southern state was um thinking their own you know um own positions they didn't really think in a aligned human perspective so by by because of boundary and those sovereign states um dividends so make it very hard to align human together to solve a same human trouble so i i can see here in the next few years it's possible to create a dao that to organize to representing the human uh perspective not just representing americans or chinese or any others so i i can say that a tremendous potential there for dallas and also i think next few decades we are facing uh increasingly you know slow economic growth trouble um which i think when you you know in regional growth is very limited so it's time to call like restructuring globally right to eliminate those artificial boundaries set by sovereign states to coordinate human resources capital resources together to build companies and startups dows that solve different world problems so i think that will be serve important economic growth in next few decades so we need a sustainable model um today a lot of dallas was very happy the team is very happy with party because they raise tons of money and the current market cap is super high but doesn't mean it still be in that way in next year and d560s in 2021 and 2020 you can see um if i do solve some problems because so many token holders that they have the leads to trade those tokens to provide liquidity due to the yield so they find a problem to solve in the markets that's why d5 could be arrived okay so i'm going to go just real quick because i'm a little bit out of time so those are successful culture models and also some successful governance models so i think we still could learn from a lot of from the today's successful tech startups or government or even religions how did you the culture generate the positive or organic culture or how they govern internally a gradation so when you coded web3 doesn't mean you gave up all the human experience that you generated past decades in building six startups successful countries we can still learn from that big building dows for legal there is no way that to avoid legal risk but there is two very important successful models by by far is the only probably primary most cases those two bitcoin ether was not judged as security so for people creating doubts by starting those examples it's more better to study other protocols that might my you don't know it's going to be investigated in next few years or not so by investigating the bitcoin ether how they structure this resolution will be give you a better sense for legal risk of doubts sorry i didn't you know manage time well today a lot of content have to pass through um i have prepared a lot of case studies i think it should be pretty easy for you to just research online how it works each dose and i think there's a tremendous opportunity in dow infrastructure space a lot of people building dial tools but a lot of people building are not the right tools or overlapping tools so very obvious one reputation system ap voting system which means you have the same token but maybe certain tokens have different power voting power in that way you can kind of like today it's a lot of stock market public markets um the fails usually have the much 10 times higher voting power even they have the same amount of shares and decentralized collaboration tools decentralized discord and uh as you know today we use a lot of zoom or discord those are rape too so i think there's a lot of opportunity to create a more decentralized version of those endowed protocols i think the governance model not going to apply for everything i think it gets specific industry got to build their own governance particles um like venture dell will be different and the d5 dial will be different mft that will be different so a lot of vertical um governance protocol opportunity there so those are two projects i'm gonna have it involved in next year or two um we're gonna launch in 2022. um the first is the venture dial um is my uh pay attribute or inspiration for the dao so i call it the return of the dao and then there another the film down so i think the best way to nerd out is building a dow so that's why i'm doing it and my talk special thanks for those people i get those opinions great resource to learn some of the projects i mentioned on the slide side are investment thank you [Applause]