[Web3 study notes] #1. DAO model derivation

I have been paying attention to the related derivative technologies based on Blockchain for a while. Recently, I took the opportunity of participating in the online study group organized by Matters to sort out my thoughts.

As this week's keynote speaker @张杰平( shared content Google Slides ) said at the beginning, Distributed Autonomous Organization is not a new concept: a small loan organization aiming at rural cooperation, raising funds to buy investment housing, no central leader Social movements, etc., can be considered as a DAO; and the establishment of DAO on the blockchain is to provide potential technical support for the quantification and distribution of public resources, so that every participant can gain value in this organization.

I would like to put these abstract concepts aside and use the organizational model of ride-hailing (a service like Uber) to deduce the feasibility and possible constraints of a DAO.

When we discuss organizational types, there are always two elements: participants and platforms . Platform is a very broad concept here, referring to any way to bring participants together. In the examples below, our hypothetical platform is a system that finds temporary mobility scooters in time for people who need to travel. Participants include both passenger and driver roles. They are involved in the system because it, as a platform, solves these two problems:

• Increase market supply : more possibilities for drivers and passengers to match
• Provide credible intermediaries to avoid disputes between supply and demand sides

Before the advent of online car-hailing, the platforms that solved these two problems were taxi companies. Taxi companies have deep pockets to buy enough vehicles and hire enough drivers to take turns driving. Taxi companies also need to apply for a business license from the government, provide good customer service, and establish a reputation in order to gain their credibility. Because of the large amount of entrepreneurial investment, taxi companies have absolute decision-making power: how many hours a driver works every day and how much performance must be completed, these are the company's final say.

Coupled with the dependence of the taxi industry on capital and government relations, a city usually has only one or two taxi companies monopolizing the market, so both passengers and drivers have limited bargaining power. Company owners and shareholders are at the center of this network of riders and drivers, a very hierarchical relationship that goes against the DAO.

The emergence of online car-hailing broke the monopoly of taxi companies at the beginning. On the basis of satisfying supply and credibility, it provides passengers and drivers with a choice of price transparency and vehicle source/customer source visualization. At the same time, because the online car-hailing platform does not have its own fleet, the investment cost of tangible assets is reduced, and there is no need to arrange and coordinate staff attendance time, nor to monitor the performance of drivers, which reduces management costs. To some extent, car-hailing platforms have delegated the management of physical asset maintenance costs and driver performance to each individual who registers a private car with the car-hailing platform. The more you want to run, the more money you can earn. In other words, the online car-hailing platform has withdrawn from the existence of the driver's employer, and only serves as an intermediary platform for the source of vehicles and the source of passengers, which is a big step forward in decentralization.

Here I want to emphasize a concept: decentralization is a gradual process, not an either-or judgment. There is no absolute distributed/distributed organization in the world, nor an absolute central hierarchical organization. Even an extremely hierarchical organization—decisions are made from the top down and subordinates must obey superiors (such as the military)—if it is to perform its mission successfully, it needs mechanisms for subordinates to provide feedback to superiors and grassroots to influence decision-making. Vice versa, even in an organization where almost everyone is equal (such as a community mutual aid group), if it wants to run successfully, it needs a few people who are willing to take responsibility to organize volunteers and build a certain level of relationship. Therefore, from taxis to online car-hailing is a decentralized process. Looking forward to the future from car-hailing, there should be further decentralized organizational forms.

In the process of decentralization, the problem that the car-hailing platform has not yet solved is: decentralized management does not mean decentralized profit distribution . The success of the car-hailing platform relies on the participation of a large number of car owners and passengers to form a scale effect; however, car owners and passengers do not participate in profit sharing, and may even become victims of platform expansion.

For example, the residual value earned by the platform from this network of car owners and passengers can be used to develop self-driving scooters, gradually squeezing the profit margins of car owners. Self-driving cars are certainly technological advances, but car owners who initially joined the car-hailing platform to earn residual value for them not only did not receive the benefits of technological progress, but were gradually replaced in this game of capital accumulation and technological iteration.

It is very common for such platforms to squeeze co-creation participants. Platforms such as QQ Games, Apple Store, Spotify, etc., were originally established to allow participants to independently publish their own games/Apps/music and make profits, but it can not only set up various agreements to limit the interests of participants ( The terms set by the Apple Store for developers), you can even invest in the development of your own platform products (QQ games plagiarize popular games on your own platform), use the platform’s golden port to promote your own products (Podcasts invested by Spotify), This will expel the first participants to accumulate scale effects for the platform.

I think the problem that blockchain can solve here is to distribute high-value tokens to early participants, acting like options or equity. Assuming that car owners who participate in online car-hailing not only earn running expenses, but also get tokens that represent their activity level, will they be more able to participate in company decision-making at the juncture of technological innovation and become active venture capitalists instead of What about passively accepting the fate of participants being eliminated from the platform?

 The first study notes, it took almost a week to write here. There are many ideas that I think I have thought clearly when I read other people's articles, but it is difficult to write them down. Sorting out, outputting, and updating your own thoughts, this may be the meaning of writing. There will be another week of online learning tomorrow. I hope I can write more smoothly next week. 🤪