Book - Securing Digital Rights for Communities | Chapter 22. DAOs & Community Proposals for SelfFund

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Hello, welcome to this part of the book that we're writing. It's section 22. It's DAOs and

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community proposals for self-funding. So the technology that we've described above allows

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for an opportunity to do actual decentralized neutral funding. And what does that mean? It

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means basically that there's no real strings attached to the funding that's given. The

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funding comes from a decentralized community, so there's no entity or no CEO, no company

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behind it. It's a truly decentralized DAO. Now, a DAO is basically a mechanism through

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which the community votes with stake-weighted vote, and various proposals are made to fund

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projects, and there's a pot of money in the DAO.

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And if the amount of votes on a project reach a certain threshold, then at that point, the

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project is funded, or funds are released to that project. If that is done from a decentralized

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DAO, then you have neutral funding. And what does that mean? It means that the DAO from

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which the funds are being released is a truly neutral DAO.

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Okay.

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It's a neutral, ownerless, CEO-less, foundation-less, company, corporate-less, digital entity that

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doesn't have any individual party that's answerable to it. It's run by the community in a decentralized

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way. What that means is that there's no entity that can issue the funding, there's no entity

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that can be sued, there's no entity that can pursue either, if anything goes wrong with

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that funding. So there's a large element of trust where the community, and the community

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itself, is demonstrating a large element of trust in the entity that's being funded

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because of the fact that it's voted for it and released the funds to that entity.

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And there's various ways that those funds can be controlled. They could be issued by

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milestones. So as milestones are completed, the community makes a judgment on that, and

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then they agree with a decentralized vote and release funds based on completion of milestones.

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Maybe there's a daily rate that's charged on a cost-reimbursable type project, where

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there's ongoing maintenance on work.

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Or if there's ongoing marketing type work, or if there's ongoing development work to

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maintain platforms, that's kind of a constant salaried job. But if there's lump sum work

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or work that can be tied to milestones, you could release based on a milestone being completed.

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You could also allow for bidding against each job. So a community could create a task or

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a project, and then the community could bid against that job.

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Basically, developers could go and see that there's a scope of work written. This is the

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work that's got to be done. I'll bid this much to get these certain milestones completed.

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And then other developers can bid against those pieces of work, and the community can

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then choose its most popular or highly technically skilled developer with the lowest price. So

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it wouldn't necessarily be the lowest price, but it would be the most complicated.

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The community could also have a list of scopes of work or a list of priorities and vote on

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those to determine what items are the most important for the community. And that would

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then give transparency so that you don't get repeat work. You see that the community has

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this task, it's really important, and there's a certain number of bids against it. And those

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bids will be finalized by this time, and then that money will be released to fund that project.

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Which means...

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You don't get multiple people working on the same project in secret or in competition with

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each other when they shouldn't be.

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Decentralized versus VC-backed DAOs. So most DAOs have got venture capitalists backing,

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which ultimately means that it appears decentralized on the surface, but in the background there's

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a couple of VCs that own most of the tokens, and they're directing where the funding goes.

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And of course, those VCs are very important. And they're happy to be part of the fundraising,

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VCs often exist in pro-regulation jurisdictions, and those jurisdictions will apply pressure to those VCs to make sure the DAOs don't fund projects that are contrary to the jurisdictions in which those VCs reside.

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So those are more centralized DAOs.

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There are a few actual decentralized DAOs around.

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Again, they're generally DAOs that don't have CEOs.

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They don't have VC-backed ICO rounds or pre-seed rounds.

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They don't have corporations or companies behind them or a foundation behind them.

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They're just communities of people that raise their tokens neutrally online and distribute to them without any single entity having control over them,

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and certainly without early VC capital being involved.

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Returning value to DAOs.

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So basically the question then is, well, if it's neutral funding and there's no strings attached,

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how does a DAO...

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How does a DAO keep the community that raised the funding for each project accountable if they could run off with the money?

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And there's many, many cases of this in blockchain history where communities have run off with money,

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or entities or teams have run off with money, or a project's remained unfinished,

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or money's been wasted, or not spent as expected by the community.

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And that's really down to the community setting up rigorous measurements as to how funding should be released and paid.

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And having strict controls in place and strict criteria up front as to how those funds should be used.

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And then a very quick way to be able to unelect a project if the community sees that it's using the funds in a way that's different to what were originally agreed.

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So the funding funnel can just be stopped to that project immediately, assuming the community removed their votes from the proposal.

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So how do you return value to these DAOs?

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Basically...

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Basically...

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Take the SPK Network.

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SPK Network is an example where it's built as a side project to Hive.

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Hive is a text-based storage blockchain.

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It's great at storing text.

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SPK Network is funded by Hive's DAO.

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It has no obligation to Hive because there's no way you can make an obligation if you don't have a contractual entity.

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However, SPK Network needs Hive because it needs the social media accounts and the text-based storage.

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So it's a storage side of Hive to store its content references.

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And SPK Network provides storage to the Hive community for off-chain storage.

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Because of course, on-chain you can only store text.

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So for videos, software, images, things like that, the SPK Network will allow Hive community members to store that type of content on behalf of other people in Hive and get incentivized for it.

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You could never do that on the Hive Blockchain directly.

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So it actually benefits Hive to implement this project.

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So in a DAO, that's how you return value to a DAO, to a community.

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The community funds you with trust.

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You build trust over a long period of time.

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You build up your reputation.

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And at a certain point, you'll be able to put in a proposal to do a project that directly benefits the community that's funding it.

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Even though there's no contracts involved, even though there's necessarily no obligations, the people's reputation is at stake.

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So the people who build SPK Network and various other projects on Hive, their reputation is at stake.

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And if they don't fulfill their targets or the things that they've said they're going to be doing, they're not going to be able to do it.

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They're going to be able to build as part of their proposals.

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Then it's likely that the community will stop funding to them and leave them be, leave their projects dead.

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And also, of course, their reputation will take a hit as a result.

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So this is how these decentralized communities can kind of hold to account and receive value from the projects that they're funding.

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The other thing that's interesting about this is if you fund in this way using a DAO,

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so what you do is you find a community that you can provide value to.

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By building them a project, and then you can ask them via proposal if they'll fund your project.

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If the community likes it, then they'll vote for it.

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And once it passes the threshold of votes, funding will be released piecemeal until your project is fully funded.

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And it'll probably be over a period of time, so you'll be building while you're being funded.

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So you might receive a certain amount every month, and you try to burn a little bit less than that, and you constantly try to meet your targets.

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The beauty of that is that if you build projects in that way,

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there was no entity that paid you.

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It was a community that paid you.

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If you build your projects in that way, there's no need for you to raise any ICO capital.

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There's no need for you to raise any venture capital, or VC capital, or do any seed rounds, or ICOs, or pre-mines, or anything like that.

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What it means, therefore, is that the people that get involved in the token of this project that's being built, which is funded by the DAO,

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those entities are all aligned because there's no early venture capital.

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There's just people that worked in the project and earned the token from the start.

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And the project was kickstarted by the decentralized DAO that funded it.

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So there's no entity, there's no corruptible entity behind the project then as a result.

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So now you can keep birthing clean, fair launch projects and keep funding them without having a centralized, corruptible entity behind them.

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So I'm always looking out for projects that are funded by actual decentralized DAOs that don't have communities,

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sorry, that don't have companies or CEOs behind them or venture capital behind them.

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Once you start seeing that, you start to see more pure, clean, fair launch projects that can be funded without having to raise an ICO, which compromises many projects.

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This is a very, very powerful new model and new way of thinking about funding a project.

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And there's very few examples so far in the industry, but there's more and more coming as time goes on.

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Why do you want decentralized neutral funding, Dan?

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Well, first of all, if a corporation is backing you, they're going to want to have a profit.

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So there's going to need to be a business model.

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So you need to come to a point where all the community members have enough skin in the game that matters,

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but not enough skin in the game to where they are reliant upon as the funder of everything.

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Because once you become the funder of everything, you need a way to fund everything.

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And that requires centralization.

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Because you're one person, and you're not going to have a bunch of people willing to work if it's for you.

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We've seen a perfect example of this with Steam.

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Steam had a hired centralized dev team that was paid by the sale of the pre-mined Ninja Mine token.

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Now, there weren't many volunteer devs.

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You can go and look.

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You can see on Chain who made the commission.

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You can see on Mitz.

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Most of them were made by the paid for developers.

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Now, when Hive fought, and there was no Ninja Mine, I.e. owner of the chain,

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and everyone had enough skin in the game, yet no one had enough skin in the game,

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to be the controller, we saw the voluntary actions rise dramatically.

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And I'm talking, it was night and day.

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Because people were working for themselves.

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So, it's tenfold.

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You need decentralized funding, which comes off the backs of everyone, most people,

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who aren't the controllers yet have sufficient skin in the game.

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Once you have that, you don't need a business model.

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You don't have to register a corporation that can then be attacked, regulated, and submitted to.

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Or made to submit to whatever laws they want.

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Decentralized funding is also very important if you're talking about the actual funding

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or the backing of the stablecoin in your network.

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If you have a centralized stablecoin, you can be regulated, stopped, and shut down.

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So, the entire process has to come from a neutral base layer.

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There's no other way to do it.

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If you want to have sufficient censorship-resistant funding throughout,

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of course, that also requires a stablecoin, but we've already gotten into that.

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You know, what a stablecoin is and why a censorship-resistant one is needed.

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VC backs, of course, are always looking for exit liquidity.

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That's one of Matt's favorite terms.

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Well, to use against people is, you know, if you have somebody who invests in the beginning,

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they're going to look for it.

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They're going to look for an exit.

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They're treating it as a business model.

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As opposed to somebody like a Taskmaster who's earned their stake over time

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throughout various price points.

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They're not looking to dump.

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They're not looking to be, you know, they're not looking for exit liquidity.

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They don't have this giant war chest that they got for basically free and they're looking to eventually liquidate.

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And once they liquidate, there's no reason for them to contribute.

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So,

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from a centralized point of view, you fail.

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But you also fail just from a community alignment standpoint.

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Because if you have the largest holders just suddenly exit,

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that's not good for the community.

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Because now you have the largest contributors with the most liquidity used against you.

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And now they don't want anything else to dupe with you because they have a new project they're invested in.

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So you lose the backing as the community.

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A lot of these things earn so much money that they didn't need to learn about scaling.

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That's the funny part about Web 2.5.

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They made so much money they didn't need to scale.

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They could pay the $300 million bill they had.

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I forgot what chain it was.

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Some ridiculous layer 2.

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It was Polyautomatic talking about their $300 million goddamn dollar bill.

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Which is ridiculous.

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Imagine having a bill that large.

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It's an operation bill, right?

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It's an operation bill to keep the lights on.

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Which is crazy. That's exit liquidity.

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It's burning to keep the lights on.

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Hoping that the token will outpace the bills.

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Short term thinking, right?

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Obviously not sustainable.

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So just from that point of view alone,

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you have the largest people looking to exit.

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Where on the opposite side,

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you have the largest people who earned over the years

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looking to build and actually use the protocol.

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But they didn't need to learn to scale.

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That's what I'm saying.

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Because they earned billions.

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That's how it works.

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It just needs to work.

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All of that shit's been hidden.

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The scaling.

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The validators.

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They're like, just Solana.

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Just make that shit work.

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Just be fast.

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And don't ask fucking questions.

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Who cares if we get a $300 million bill?

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Who cares if we have all this?

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That's on the back end.

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People don't need to know about that shit.

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Because they weren't talking about the $300 million bill

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to raise their goddamn ICO, were they?

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Now, five years later,

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they're talking about, oh, we need more runway.

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We need another fucking pre-seed.

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That's what people don't understand.

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You got the ICO.

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Now people coming after the ICO number two.

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And they just keep on coming at you.

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Like, oh, we got some more tokens.

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We need to sell some people at a cheaper price.

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And then, of course, dump on the market with some pump.

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Because it's like, oh, our product actually works.

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When you look at behind the scenes,

223
00:16:05,420 --> 00:16:07,420
it's like monkeys clanking wrenches.

224
00:16:07,420 --> 00:16:09,420
It's so unscalable.

225
00:16:09,420 --> 00:16:11,420
The big threat there is,

226
00:16:11,420 --> 00:16:13,420
OK, we want a fork.

227
00:16:13,420 --> 00:16:15,420
You dump that,

228
00:16:15,420 --> 00:16:17,420
and monkey is banging wrenches

229
00:16:17,420 --> 00:16:19,420
on the community.

230
00:16:19,420 --> 00:16:21,420
Like, how do we run this thing?

231
00:16:21,420 --> 00:16:23,420
We don't have $300 million to run this thing.

232
00:16:23,420 --> 00:16:25,420
They've built a monster

233
00:16:25,420 --> 00:16:27,420
that can only be run

234
00:16:27,420 --> 00:16:29,420
off of a centralized business model.

235
00:16:29,420 --> 00:16:31,420
They didn't scale.

236
00:16:31,420 --> 00:16:33,420
So that's a side effect

237
00:16:33,420 --> 00:16:35,420
of having centralized funding,

238
00:16:35,420 --> 00:16:37,420
is the fact that they didn't learn to scale.

239
00:16:37,420 --> 00:16:39,420
And I'm not talking,

240
00:16:39,420 --> 00:16:41,420
this is something that's hypothetical.

241
00:16:41,420 --> 00:16:43,420
We've seen it in practice.

242
00:16:43,420 --> 00:16:45,420
Steam had a large fucking bill.

243
00:16:45,420 --> 00:16:47,420
It was millions of dollars

244
00:16:47,420 --> 00:16:49,420
a year to run fucking Steam.

245
00:16:49,420 --> 00:16:51,420
The bill was gigantic.

246
00:16:51,420 --> 00:16:53,420
And when we forked,

247
00:16:53,420 --> 00:16:55,420
the community was like,

248
00:16:55,420 --> 00:16:57,420
a million dollars?

249
00:16:57,420 --> 00:16:59,420
I don't know about that.

250
00:16:59,420 --> 00:17:01,420
And suddenly, magically,

251
00:17:01,420 --> 00:17:03,420
somehow,

252
00:17:03,420 --> 00:17:05,420
some magical intervene

253
00:17:05,420 --> 00:17:07,420
just touched upon the chain,

254
00:17:07,420 --> 00:17:09,420
and it scaled 90%.

255
00:17:09,420 --> 00:17:11,420
We're talking from millions to thousands.

256
00:17:11,420 --> 00:17:13,420
Thousands of dollars.

257
00:17:13,420 --> 00:17:15,420
Not millions, we're talking thousands.

258
00:17:15,420 --> 00:17:17,420
We're talking communities.

259
00:17:17,420 --> 00:17:19,420
We're talking people in Cuba can run this shit now.

260
00:17:19,420 --> 00:17:21,420
Why did that magically happen?

261
00:17:21,420 --> 00:17:23,420
When this motherfucker,

262
00:17:23,420 --> 00:17:25,420
Ned, on Steam,

263
00:17:25,420 --> 00:17:27,420
had a ninja mind that he was dumping on you,

264
00:17:27,420 --> 00:17:29,420
he had infinite free tokens

265
00:17:29,420 --> 00:17:31,420
to dump on your ass,

266
00:17:31,420 --> 00:17:33,420
and he couldn't scale the goddamn chain.

267
00:17:33,420 --> 00:17:35,420
The reason he couldn't scale

268
00:17:35,420 --> 00:17:37,420
is because he wasn't there for the future.

269
00:17:37,420 --> 00:17:39,420
These self-funded,

270
00:17:39,420 --> 00:17:41,420
PC people aren't here for the future.

271
00:17:41,420 --> 00:17:43,420
They build short-term tech

272
00:17:43,420 --> 00:17:45,420
that's fast and flashy and catches

273
00:17:45,420 --> 00:17:47,420
what, oh, NFTs, oh, this, that.

274
00:17:47,420 --> 00:17:49,420
They catch whatever narrative's in the moment.

275
00:17:49,420 --> 00:17:51,420
They build that narrative

276
00:17:51,420 --> 00:17:53,420
like a business hawk,

277
00:17:53,420 --> 00:17:55,420
and they don't care about the future funding.

278
00:17:55,420 --> 00:17:57,420
They hide the scaling. They shield it.

279
00:17:57,420 --> 00:17:59,420
They run it off their centralized machine,

280
00:17:59,420 --> 00:18:01,420
eating those costs,

281
00:18:01,420 --> 00:18:03,420
hoping that their token sales

282
00:18:03,420 --> 00:18:05,420
outpace the cost of their centralized

283
00:18:05,420 --> 00:18:07,420
infrastructure.

284
00:18:07,420 --> 00:18:09,420
So,

285
00:18:09,420 --> 00:18:11,420
the community of Hive

286
00:18:11,420 --> 00:18:13,420
actually had to run it.

287
00:18:13,420 --> 00:18:15,420
I'm talking a real community.

288
00:18:15,420 --> 00:18:17,420
We're looking at each other,

289
00:18:17,420 --> 00:18:19,420
and we gotta run it,

290
00:18:19,420 --> 00:18:21,420
because we don't have some centralized VC money.

291
00:18:21,420 --> 00:18:23,420
We don't have some fucking pre-mine.

292
00:18:23,420 --> 00:18:25,420
We literally have to run it.

293
00:18:25,420 --> 00:18:27,420
The thing scaled overnight.

294
00:18:27,420 --> 00:18:29,420
It scaled literally overnight.

295
00:18:29,420 --> 00:18:31,420
They're like, look, we don't need this.

296
00:18:31,420 --> 00:18:33,420
We don't need that.

297
00:18:33,420 --> 00:18:35,420
Actually, we can throw this out.

298
00:18:35,420 --> 00:18:37,420
We can throw that.

299
00:18:37,420 --> 00:18:39,420
It took over, and we forked.

300
00:18:39,420 --> 00:18:41,420
There was too much weight on the plane,

301
00:18:41,420 --> 00:18:43,420
and the plane was going down.

302
00:18:43,420 --> 00:18:45,420
We were frantically throwing out things

303
00:18:45,420 --> 00:18:47,420
that weren't needed.

304
00:18:47,420 --> 00:18:49,420
We don't need that. We don't need this.

305
00:18:49,420 --> 00:18:51,420
We don't need that.

306
00:18:51,420 --> 00:18:53,420
We stripped it to the bare fucking minimum,

307
00:18:53,420 --> 00:18:55,420
and the plane started to fly again.

308
00:18:55,420 --> 00:18:57,420
It was light enough

309
00:18:57,420 --> 00:18:59,420
to where it did its job.

310
00:18:59,420 --> 00:19:01,420
It flies.

311
00:19:01,420 --> 00:19:03,420
It's what it needs to fucking do.

312
00:19:03,420 --> 00:19:05,420
You can build your airports.

313
00:19:05,420 --> 00:19:07,420
You can build your cities. You can do whatever the fuck you want.

314
00:19:07,420 --> 00:19:09,420
You don't build the city on the plane,

315
00:19:09,420 --> 00:19:11,420
which is what a lot of people did,

316
00:19:11,420 --> 00:19:13,420
and people don't realize they're floating in the ocean

317
00:19:13,420 --> 00:19:15,420
when they think they're flying.

318
00:19:15,420 --> 00:19:17,420
It's like, dude, you're dead.

319
00:19:17,420 --> 00:19:19,420
You're lost.

320
00:19:19,420 --> 00:19:21,420
You have no idea what's going on behind the curtains.

321
00:19:21,420 --> 00:19:23,420
If they were to dump that on you,

322
00:19:23,420 --> 00:19:25,420
it would be like dumping the Black Plague on people.

323
00:19:25,420 --> 00:19:27,420
People don't understand how horrible

324
00:19:27,420 --> 00:19:29,420
these things have scaled.

325
00:19:29,420 --> 00:19:31,420
This long-winded issue is

326
00:19:31,420 --> 00:19:33,420
the side effect is

327
00:19:33,420 --> 00:19:35,420
you fork, and you can't run it.

328
00:19:35,420 --> 00:19:37,420
We were lucky and fortunate enough

329
00:19:37,420 --> 00:19:39,420
on Steam, when we forked the Hive,

330
00:19:39,420 --> 00:19:41,420
that we were able to do it.

331
00:19:41,420 --> 00:19:43,420
Because we might not have been able to.

332
00:19:43,420 --> 00:19:45,420
It might have been too damn expensive.

333
00:19:45,420 --> 00:19:47,420
But just so fucking happened,

334
00:19:47,420 --> 00:19:49,420
which is very eerie,

335
00:19:49,420 --> 00:19:51,420
of all the chains that forked,

336
00:19:51,420 --> 00:19:53,420
it happened to be the text layer.

337
00:19:53,420 --> 00:19:55,420
The one that could actually scale.

338
00:19:55,420 --> 00:19:57,420
Because if you tried to fork

339
00:19:57,420 --> 00:19:59,420
fucking one of these Ethereums,

340
00:19:59,420 --> 00:20:01,420
or one of these smart contract layer one machines,

341
00:20:01,420 --> 00:20:03,420
and run it as a community,

342
00:20:03,420 --> 00:20:05,420
you see it fails every time.

343
00:20:05,420 --> 00:20:07,420
Point to one layer one,

344
00:20:07,420 --> 00:20:09,420
that is running,

345
00:20:09,420 --> 00:20:11,420
that didn't have some kind of sketchy pre-mine,

346
00:20:11,420 --> 00:20:13,420
that didn't have some kind of sketchy DC funding.

347
00:20:13,420 --> 00:20:15,420
I don't want to name names.

348
00:20:15,420 --> 00:20:17,420
I know somebody might be able to name a few.

349
00:20:17,420 --> 00:20:19,420
But the point is, they're in the low

350
00:20:19,420 --> 00:20:21,420
single percents.

351
00:20:21,420 --> 00:20:23,420
Because most of them are DC running

352
00:20:23,420 --> 00:20:25,420
because they're expensive as fuck,

353
00:20:25,420 --> 00:20:27,420
if they actually get usage.

354
00:20:27,420 --> 00:20:29,420
So, at the time,

355
00:20:29,420 --> 00:20:31,420
people had to realize,

356
00:20:31,420 --> 00:20:33,420
we weren't forking a vacant chain.

357
00:20:33,420 --> 00:20:35,420
We were forking a chain that was top five

358
00:20:35,420 --> 00:20:37,420
in transactions in the entire world

359
00:20:37,420 --> 00:20:39,420
of all these going on,

360
00:20:39,420 --> 00:20:41,420
competing against centralized chains.

361
00:20:41,420 --> 00:20:43,420
So, there was forking

362
00:20:43,420 --> 00:20:45,420
a fucking highway

363
00:20:45,420 --> 00:20:47,420
with a lot of traffic.

364
00:20:47,420 --> 00:20:49,420
And to be able to do that as a community,

365
00:20:49,420 --> 00:20:51,420
and then self-scale,

366
00:20:51,420 --> 00:20:53,420
is such an achievement.

367
00:20:53,420 --> 00:20:55,420
So, yeah, you get into DAOs,

368
00:20:55,420 --> 00:20:57,420
you need the self-funding.

369
00:20:57,420 --> 00:20:59,420
The self-funding then makes it,

370
00:20:59,420 --> 00:21:01,420
as a byproduct, a scalable chain

371
00:21:01,420 --> 00:21:03,420
that can be held to an account.

372
00:21:03,420 --> 00:21:05,420
Because if you have a chain,

373
00:21:05,420 --> 00:21:07,420
you can run a full node,

374
00:21:07,420 --> 00:21:09,420
now it's like, fuck around and find out.

375
00:21:09,420 --> 00:21:11,420
Because we can fork, and we'll be everywhere.

376
00:21:11,420 --> 00:21:13,420
If you have a fucking Ethereum,

377
00:21:13,420 --> 00:21:15,420
or one of these fat nodes,

378
00:21:15,420 --> 00:21:17,420
and they're like, ha ha ha,

379
00:21:17,420 --> 00:21:19,420
we did some stupid shit,

380
00:21:19,420 --> 00:21:21,420
and you try to fork, they're gonna laugh at you.

381
00:21:21,420 --> 00:21:23,420
Because you're gonna fall right on your face.

382
00:21:23,420 --> 00:21:25,420
It's that simple.

383
00:21:25,420 --> 00:21:27,420
That's a great explanation of why

384
00:21:27,420 --> 00:21:29,420
neutral funding is important.

385
00:21:29,420 --> 00:21:31,420
Actually, when I did this the first pass,

386
00:21:31,420 --> 00:21:33,420
it was much quicker than that.

387
00:21:33,420 --> 00:21:35,420
I think you can't underestimate the passion

388
00:21:35,420 --> 00:21:37,420
behind it.

389
00:21:37,420 --> 00:21:39,420
You can't even come close to scraping the surface

390
00:21:39,420 --> 00:21:41,420
on how important neutral funding is.

391
00:21:41,420 --> 00:21:43,420
A quick section on what a DAO is.

392
00:21:43,420 --> 00:21:45,420
I mean, I discussed this in the last section as well,

393
00:21:45,420 --> 00:21:47,420
but very briefly.

394
00:21:47,420 --> 00:21:49,420
It's an account

395
00:21:49,420 --> 00:21:51,420
that has money from the chain,

396
00:21:51,420 --> 00:21:53,420
probably funded by inflation from the chain.

397
00:21:53,420 --> 00:21:55,420
Ideally, it's neutral.

398
00:21:55,420 --> 00:21:57,420
It's a neutral chain that's decentralized.

399
00:21:57,420 --> 00:21:59,420
No CEO, no pre-mine,

400
00:21:59,420 --> 00:22:01,420
no venture capital behind it.

401
00:22:01,420 --> 00:22:03,420
No company behind it.

402
00:22:03,420 --> 00:22:05,420
It has a way,

403
00:22:05,420 --> 00:22:07,420
and there's various different mechanisms

404
00:22:07,420 --> 00:22:09,420
that you could do this,

405
00:22:09,420 --> 00:22:11,420
but a basic one is where you can make proposals,

406
00:22:11,420 --> 00:22:13,420
and then if the community votes with their stake

407
00:22:13,420 --> 00:22:15,420
on that proposal,

408
00:22:15,420 --> 00:22:17,420
and it reaches a certain threshold,

409
00:22:17,420 --> 00:22:19,420
then funding is released to fund that project.

410
00:22:19,420 --> 00:22:21,420
You need various ways for the community

411
00:22:21,420 --> 00:22:23,420
to be able to hold that project to account,

412
00:22:23,420 --> 00:22:25,420
to remove the funding if the project becomes corrupted.

413
00:22:25,420 --> 00:22:27,420
But the whole point is

414
00:22:27,420 --> 00:22:29,420
that if you're gaining your funding

415
00:22:29,420 --> 00:22:31,420
from a neutral DAO,

416
00:22:31,420 --> 00:22:33,420
you are funding

417
00:22:33,420 --> 00:22:35,420
a neutral project.

418
00:22:35,420 --> 00:22:37,420
The downsides are that there's no strings attached

419
00:22:37,420 --> 00:22:39,420
so the people could run off with the money.

420
00:22:39,420 --> 00:22:41,420
But as long as there's strict regulation

421
00:22:41,420 --> 00:22:43,420
on how the money's issued,

422
00:22:43,420 --> 00:22:45,420
against milestones or a certain amount each month

423
00:22:45,420 --> 00:22:47,420
that the community can unvote if they decide

424
00:22:47,420 --> 00:22:49,420
the project's no longer productive,

425
00:22:49,420 --> 00:22:51,420
then there's only so much money that someone can run away with.

426
00:22:51,420 --> 00:22:53,420
And because

427
00:22:53,420 --> 00:22:55,420
there's no strings attached, the idea is that the project

428
00:22:55,420 --> 00:22:57,420
that's being built benefits the DAO,

429
00:22:57,420 --> 00:22:59,420
and so that DAO can

430
00:22:59,420 --> 00:23:01,420
benefit from

431
00:23:01,420 --> 00:23:03,420
funding a project far more than the funding

432
00:23:03,420 --> 00:23:05,420
was

433
00:23:05,420 --> 00:23:07,420
dedicated to the project itself.

434
00:23:07,420 --> 00:23:09,420
So, you know, maybe the project costs

435
00:23:09,420 --> 00:23:11,420
three quarters of a million to build,

436
00:23:11,420 --> 00:23:13,420
but the value it creates is several million.

437
00:23:15,420 --> 00:23:17,420
So that's what a DAO is,

438
00:23:17,420 --> 00:23:19,420
really.

439
00:23:19,420 --> 00:23:21,420
Many, many DAOs, most DAOs

440
00:23:21,420 --> 00:23:23,420
are centralized because they're backed by

441
00:23:23,420 --> 00:23:25,420
VC funding, and that VC funding is in

442
00:23:25,420 --> 00:23:27,420
regulated jurisdictions, and they will comply

443
00:23:27,420 --> 00:23:29,420
to the regulation, whatever that be.

444
00:23:29,420 --> 00:23:31,420
Even if there's no regulation, it will come in a veil

445
00:23:31,420 --> 00:23:33,420
It will be some kind of deal cut

446
00:23:33,420 --> 00:23:35,420
with the local authorities, and so

447
00:23:35,420 --> 00:23:37,420
those DAOs will be restricted in what they can fund and how

448
00:23:37,420 --> 00:23:39,420
they can fund it. And then the projects

449
00:23:39,420 --> 00:23:41,420
that fall out of those DAOs, because they're funded by

450
00:23:41,420 --> 00:23:43,420
those DAOs, will also fall under that type of restriction.

451
00:23:43,420 --> 00:23:45,420
So if you can find projects

452
00:23:45,420 --> 00:23:47,420
that actually are decentralized, that have their own DAOs,

453
00:23:47,420 --> 00:23:49,420
and serve those projects to build them something

454
00:23:49,420 --> 00:23:51,420
that's useful for them, that they would want to fund,

455
00:23:51,420 --> 00:23:53,420
then you have decentralized funded

456
00:23:53,420 --> 00:23:55,420
projects, and now you have the maximum chance of

457
00:23:55,420 --> 00:23:57,420
having a neutral project that Damage is describing.

458
00:24:01,420 --> 00:24:03,420
Thank you.