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DAO is a company in the crypto world.
Original title: “DAO is eating the world”
Written by: Michael Macaulay
In human history, every major epidemic will change the course of history.
Around 1350 AD, a plague originating from Mongolia swept across Europe, killing tens of millions of people, and reducing the population of Europe by a third.
But in the eyes of historians, this plague gave birth to modern Western civilization.
A large number of young adults died of the plague, the labor force in the countryside dropped sharply, and the shortage of tenant farmers and serfs in the feudal lord manor had shaken the foundation of the feudal tenant farming system.
The demand for labor is in short supply and the labor is expensive, which directly promotes the improvement of tools and technological innovation.
After the plague, many feudal countries in Europe were reborn from devastation and began to move towards a modern society and commercial economy. With these three cornerstones, Western Europe quickly became stronger and became a modern society and commercial economy. The most prosperous region in the world.
Looking back at the end of 2021, what has this new crown epidemic that has plagued mankind for two years changed?
Undoubtedly, the most important thing is that the US dollar has been released. While continuously pushing up the US government’s debt ceiling, it has also pushed the prices of various assets to new highs.
Among them, the biggest winner is Crypto, represented by Bitcoin. Bitcoin has truly become a store of value. It has begun to enter the balance sheets of listed companies such as Tesla and become the legal tender of El Salvador…
The U.S. dollar M0 soared after the epidemic
Second, the isolation caused by the epidemic has also changed the organization of human work to a certain extent. Silicon Valley technology companies have gradually become accustomed to telecommuting.
In addition to retiring the office building, Twitter clearly supports employees to choose remote office after the epidemic. Stripe announced a plan for permanent remote office. Google allows employees to apply for permanent remote office. Coinbase clearly encourages employees to choose the remote mode.
As a result, cloud video conferencing applications such as Zoom took the lead.
Because of the epidemic, people’s energy and passion that cannot be consumed in the real world have begun to turn to the virtual world, and the meta universe has become a new habitat for time and money.
Not only can people play games in the virtual world for fun, but they can also earn a lot of money through Axie Infinity chain games.
All of this truly affects everyone’s destiny and changes the trajectory of their lives.
A high school classmate who used to work as a programmer in Ant Group, often worked overtime, and later resigned before getting married, and chose to write code for a remote part-time job in a Silicon Valley company. He obtained a relatively free working environment, which was convenient for children at home in the future, but his salary did not drop. .
A young man in the Philippines could only make a living by going out to work, but now relying on Axie can earn much higher income.
At the same time, public opinion collectively turned to the left, and people all over the world seemed to start to hate large companies more and more. The former entrepreneurial heroes became capitalists “spurned” by others.
Crypto Fomo, the wave of telecommuting, the rise of the virtual world, and public opinion against big companies… A series of changes have led to the rapid rise of the new organizational form DAO ( Decentralized Autonomous Organization).
It is not a brand-new concept, but under the torrent of the times, it has been pushed to the center of the stage.
Compared with the past company, DAO offers more possibilities: global distribution, online links, benefit sharing… It seems that people can see the dawn and direction of Web3.0.
DAO is eating the world.
In this issue, Deep Wave TechFlow translates and shares this article “DAO is eating the world” by Michael Macaulay. Whether you think DAO is the future or think DAO is a utopia of hype concept, this article is worth reading for you learn.
There is a lot of content, please bear with me.
We have all learned a lot from the pandemic of the new crown epidemic.
The government’s money-printing machine is fully powered, and the current economic environment has more currency than at any time in history, and the situation will only get worse. Millions of people have logically abandoned government-backed fiat currencies and switched to Bitcoin and other cryptocurrencies.
No matter from which point of view, Bitcoin is objectively a better currency than the US dollar. But now there is a more exciting innovation, it is DAO.
DAO is the native company of Crypto
DAO is the abbreviation for decentralized autonomous organization. Because there is no formal leadership, it is decentralized; any member is allowed to make decisions, so it is autonomous. Moreover, it is basically just an organization. The simplest way to understand is to treat DAO as a company. The two have many similarities, such as:
To organize individuals for a cause;
Solve social problems by creating value;
Provide an opportunity to create wealth (both individuals and society as a whole).
In order to better understand this similarity, we need to understand the history of the company system. The social structure of the company is much older than you think.
Early stage company
There are many things that cannot be done by individuals. Even today, we have the tools and technology to provide unlimited leverage, and most individuals still cannot have a lasting impact. Before the industrial revolution, the restrictions imposed on individuals were even greater.
If you want to have real power, you need to use leverage. There are four main ways to leverage leverage:
Labor, capital, media, code.
The oldest form of leverage is labor, and we have been using it for thousands of years. Specifically, we use the lever of labor by inventing the government system, which helps to coordinate and organize a large amount of manpower to complete a common cause. This also largely explains why we have not seen innovation for most of the history. But until one day, everything changed.
The British founded the East India Company in 1600 AD. It was one of the earliest joint-stock companies and changed the world.
Why did it change the world?
Investors can buy the company’s stock, and the stock represents ownership. If the company makes a lot of money, they can use these shares in exchange for profits, and they don’t need to do any work themselves. At the same time, this is also a good thing for the founders. Without the help of investors, it will only be more difficult for companies to get started.
In practice, the corporate system combines the leverage of labor and capital. The company has become the most powerful entity in the world, and it explains to a large extent why the British Empire, an early adopter of this new organization method, once owned a quarter-sized colony of the entire planet.
At first, the British colonial behavior was not carried out through military force, but through colonies sponsored by the company. The military occupation only happened after the locals rebelled. The East India Company disintegrated in 1873. But the concept of a company that combines labor and capital still exists and has become the cornerstone of our lives.
People have set up millions of companies since the 16th century. Companies continue to exist because they successfully coordinate a large number of individuals.
For example, Amazon has nearly 1 million workers, and it provides a convenient way to deliver goods to consumers. The entire company operates quickly, like a well-oiled machine. You ordered a book from Amazon tonight, and it will arrive in less than a week.
The company system is the foundation of our modern society. Do you work for a company or own a company yourself? What is your position in the company? Where do you buy products from? Which companies do you have contact with in your free time?
We deal with various companies every day. The overall concept of the company originated in the 16th century. It combines capital and labor levers, which is a time-tested practice that has not died yet.
Today, the most powerful companies are using new forms of leverage: media and codes.
Companies in the 16th century combined labor and capital, which was an innovation at the time. But in the past 200 years, the most successful companies have used the advantages of media and code to gain more leverage.
We continue to take Amazon as an example. It effectively uses various forms of leverage: using capital to start new projects, using labor to build and keep the entire company running, using code to enable anyone to order everything online, and use The media releases information.
After all, software is eating the world because software companies effectively combine various forms of leverage. These companies create a lot of wealth, but they also have drawbacks.
The company is a strong social structure. But they have many big problems, the most urgent of which are the following three:
Upside for investors
Barriers to Entry
Upside for investors
The company has created two types of people: those who own the company and those who make it operate. Company owners can be divided into two categories: investors or co-founders.
Investors buy the company’s stock and expect a return on investment, and the co-founders help to build the company, usually with partial ownership.
The only goal of the company is to produce capital, so all parts of the company are consumable. Unfortunately, the scope of this consumption also includes the people who make the company operate, that is, the workers.
The company pays workers the minimum amount of money to allow them to complete their work. As the population increases and farming methods become more effective, developed countries have never really lacked labor, which has led to the phenomenon of low wages for workers.
This mechanism creates a sharp contrast between the person who owns the company and the person who makes it operate. You can work for the most profitable company on the planet, but its upside (the wealth generated by the company) is limited to the owner class. .
Amazon is a perfect example. This company is very valuable, using various forms of leverage and generating an amazing amount of wealth. However, all surplus value is occupied by the owner class, and it is common for Amazon workers to live in poverty.
In the United States, Amazon is the largest employer of SNAP recipients. The wages of Amazon workers are very low, low enough to qualify for government benefits.
This is hardly a new problem. The most popular communism of the 20th century tried to completely end the private company system, but the movement failed to produce a coherent alternative. This means that we are living in a world where the communist opposition has won, and many of the criticisms of communism against them are still real.
In the decades after the collapse of the Soviet Union, we still could not fully resolve the obvious differences between business owners and the working class.
Barriers to Entry
People are logically motivated to become company owners, and accepting alternatives docilely makes them succumb to an environment in their lives beyond their control.
Everyone understands that it is better to be a business owner than a worker, and the worst little boss has a higher status than the most well paid worker. But the initial stage of creating a company is extremely difficult. Here are the reasons why most people fail to create a successful company:
Lack of education
Lack of a financial safety net (a business failure may lead to financial bankruptcy).
Legal difficulties (companies often need the entire legal department).
Lack of geographical opportunities (difficult to acquire talents or customers)
Having expertise in a stagnant industry (if not impossible, it is impossible to succeed).
The education prescribed by the state does not teach any knowledge about business. The consequence is that company ownership has become a privilege limited to a small group of people in society.
A company exists to generate profit, nothing more, nothing is more important than profit.
This profit drive often leads to improper resource allocation and price fraud.
Today, the number of vacant houses exceeds the number of homeless people. While the poor are starving, the company has abandoned millions of calories of food. Companies will destroy their own products, artificially reduce supply and trigger price increases. These actions are carried out in the name of profit.
Companies are not charities, they are profit-making enterprises. The best example of price drive up comes from the medical industry in the United States. Americans pay more for medical care than all other developed countries.
The price is so high, but Americans get the worst treatment-the cost of an ambulance call is more than a month’s salary, medical expenses trigger 62% of bankruptcies, and about 30% of the medical expenses are entirely waste money.
All these problems stem from the inherent structure of the company. They destroy their own products or charge US$20,000 for the treatment of heart disease, all just to obtain higher profits.
The company system has existed for 400 years. If we have not solved these problems, it is unreasonable to expect these problems to be solved one day.
I think it must be clarified that I will not blame the boss of the company for these problems. They are doing their best to play this game, and the company makes them more powerful.
The problem with the company system lies in the design of the rules of the game, not the players in the game. Fortunately, DAO provides a better game rule and creates a game that can fully solve all the problems of the company’s system.
DAO is a better company
DAO has countless advantages over traditional companies. It has no formal role or hierarchy, and its decisions are determined by community opinions. DAO relies on voluntary labor. People provide value in DAO because of their voluntary choice, and the quality of labor has doubled.
The minimum work of clocking in to work and engaging in passion projects are simply not comparable.
The best example is the comparison between UniswaUniswap and Coinbase, both of which provide the ability to trade Crypto.
Coinbase is a public company with thousands of employees, and Uniswap is a DAO with about 20 core engineers.
Although the amount of labor is different, the workloads handled by the two are similar. In some time periods, Uniswap’s workload will be even higher. So which of the two sounds like a better investment object?
The difference between Uniswap and Coinbase reflects the difference between DAO and company, and DAO also solves the three most pressing problems facing companies today.
Upside for investors
In a traditional company, investors own the company, and all the value obtained by the company is directly owned by them, and workers can only get the minimum remuneration. But DAO is owned by the community, and all the value captured by DAO will enter the entire DAO. This process is mainly done through native tokens.
Is Uniswap profitable? Then every token will increase in value. Whether you have established a smart contract or wrote a copy on the website, the method is not important, you can get as much value. The only way to become a community member is to own tokens, which ensures that each member is financially motivated to contribute their best labor to the DAO. In time, DAO will replace every company, and that’s why.
Barriers to Entry
Traditional corporate ownership is a privilege, few people understand it, and there are too many barriers to entry. But anyone can start DAO, and the only barrier to entry for DAO is willpower.
This means that there will be fierce competition between DAOs, and only the strongest DAO will rise to the top. They will attract the best labor, capital and members. Once they become part of the DAO, each of them is related to the success of the DAO.
A similar mechanism has been formed between Hollywood and YouTube. Hollywood’s operation is basically the same as that of a company. It has a huge barrier to entry, even higher than the threshold for starting a company. This has led to decades of stagnation, remakes and bad movies.
YouTube allows anyone to become a video creator. Suddenly, there was fierce competition among millions of independent creators to provide entertainment content to the world. DAO is not just a mild improvement, it is an efficiency revolution.
Today, movies are a pastime to watch occasionally. At the same time, YouTube is highly entertaining and addictive. Removing barriers to entry will double the quality of competition, and similar mechanisms will play a role in DAO.
Profit is the only goal of the company, and resource allocation and human life rank second. This was the case in the past, and it will be the same in the future.
DAO is task-driven. Its main goal is to solve a problem or create value. Profits rank second and are a by-product of creating value.
If DAO puts profit before its company mission, some members will leave because profit is not the purpose of their joining. In addition, the competitor DAO can position itself as a better choice to attract these members and create a better public perception.
Let’s imagine Uniswap’s transition to profitability, for example, they charge a 25% fee for all transactions. If there is such a thing, Uniswap’s users will be greatly reduced, and they will quickly turn to competitors. But we also have to admit that this kind of thing will never happen anyway.
The community will make collective decisions in the best interests of the DAO, and a majority of Uniswap members are required to vote for it. So in theory this kind of thing may happen, but once it happens, it will be used by competitors.
Corporate systems play an important role in our modern society, and they have a history of 400 years. It is a useful social structure that combines different forms of leverage to create a rich human civilization in our eyes.
But the company system is an outdated tool. It has caused many problems that plague our society, caused extreme wealth inequality, prevented competition, and sacrificed everything for profit.
And DAO solves all the above-mentioned problems, and even solves other problems. DAO is more efficient, encourages competition, and emphasizes company mission rather than profit. Therefore, DAO may replace traditional companies in our lifetime. Its structural efficiency is extremely powerful and cannot be ignored.
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