DAOs and the future of social impact
Decentralized Autonomous Organizations (DAOs) are one of the most exciting developments to come out of the crypto world in recent years, and have experienced rapid growth towards becoming a vital part of the blockchain and crypto ecosystem.
As these organizations have grown, there has been an emerging theme of social impact that has grown with them. Many leaders in the DAO space have recognized that there is a natural harmony between DAOs and social impact, and have capitalized on this relationship to develop DAOs that are contributing to important social causes in new and innovative ways.
Today, we will be focusing on the social use cases of DAOs and our belief that DAOs will be an essential part of the social impact sector moving forward.
What is a DAO?
Before we dive any deeper, it is important to briefly highlight what a DAO is, and some of the key features behind them. There could be whole courses on the more technical components of DAOs and how they work, but for the purposes of this post, we will provide only a basic overview.
Decentralized Autonomous Organizations (DAOs) are organizations created by developers that have no centralized leadership (hence the word decentralized), a horizontal structure that is governed by community members, and a set of automated rules built in to the protocol which enables it to continue functioning without the need for leadership such as a Board. DAOs are open sourced so that all members can contribute to its development and see the rules (built in to the code) behind the DAO.
Central to all DAOs is the importance of community governance, which makes it a natural fit for the social impact sector. Whereas non-profits have traditionally been more centralized in their decision making, more and more are beginning to see value in the importance of community-based decision making, where beneficiary communities make collective decisions about how funds are spent.
The social impact use cases of DAOs
As highlighted above, there is a natural and positive alignment between DAOs and social impact, and as a result, we have seen many impact driven DAOs emerge in recent years.
One of the most obvious social impact use cases of DAOs, is utilizing them as a means for fundraising and providing direct donations to charitable causes. DAOs can be set up to accept membership from anyone interested in supporting the cause, through the purchase of governance tokens, and the group can decide collectively how the funds are dispersed. For example, let’s say 100 individuals purchased $100 of the DAOs token each, granting them membership and voting permissions, and 25% of the value of the tokens goes towards the DAOs charitable fund. The members (token holders) could then vote on which cause they want the $2,500 raised to support, based on a number of projects proposed by community members. As new members join, more funds are added to the pool, which can be paid out to charities at a pre-determined basis with collective input from the community.
Another potential use case for social impact DAOs is establishing decentralized social impact venture funds. In this scenario, members of the DAO could pool money to establish a fund to support impact-driven start-ups. Individuals and collectives could submit project proposals to the DAO, and a vote could take place amongst DAO members to determine which projects to back. The DAOs could be organized around a certain core theme, for example, supporting women-led projects, projects aimed at combatting climate change, or projects built on a certain blockchain. There are many DAOs like this that are already in existence, such as MetaCartel Ventures.
Another potential use case of DAOs, is the development of a social network which publishes content around a certain social justice issue. In this case, members could be rewarded for creating and publishing research around a certain topic, such as the environment or gender equity, and receive tokens for their contributions. In this case, users could provide votes to the research they approve of, which then determines the amount of tokens the researcher receives. This is similar to how Steemit works, where users upload content and receive STEEM tokens based on how much votes their content receives.
These are just a few of many examples of how DAOs could be used to achieve a social impact mission. The open, transparent, and non-hierarchical nature of DAOs make them a perfect vehicle for the delivery of social value, and I am confident that in the not-so-distant future, we will begin seeing all sorts of new DAOs emerge that are impact driven and truly contributing to social good.
Examples of social impact driven DAOs
To wrap things up, I wanted to highlight just a few DAOs currently in existence with a social impact focus. Of course, this list is not exhaustive, and in the future I hope to highlight more DAOs that are having a positive social impact.
Bankless DAO – This DAO has the mission of helping the world go bankless and is a “decentralized community to coordinate and propagate bankless media, culture, and education. Its goal is to drive adoption and awareness of truly bankless money systems like Ethereum, DeFi, and Bitcoin.”
HerStory DAO – “HerStory DAO is an art collective dedicated to preserving and incubating the stories of Black woman creators in NFTs. They became known after bringing Black artists, collectors, and allies together to bid on two NFT art pieces by Black female rapper Latasha and an Ethiopian family of visual artists that go by the name Yatreda.”
Seed Club – Seed Club is a social token incubator, that helps developers launch successful social tokens. “We partner with creators, bringing access and insight from a diverse group of advisors, marketers, token designers and technologists, who all share in the upside of successful projects.”
Conclusion
DAOs are in their infancy but have already achieved so much, and there is limitless potential for them to be a true force for social good. The inherent nature of DAOs as open, decentralized, community-based organizations lends perfectly to the social impact sector, where greater emphasis is being placed on the importance of grassroots and community-level decision making, as opposed to the traditional hierarchical structures of charities and non-profits.
DAOs will be a vital part of the social impact ecosystem in the not-so-distant future, and I, for one, can’t wait to see all of the good that comes from the space.
Check out our podcast episode, DAOs for Social Impact, where we do a deeper dive into the potential use cases of DAOs in disrupting the social impact space.
What do you think about the future of DAOs for social impact? What are the most compelling use cases you can think of? Tweet us at @Crypto_Altruism, we’d love to hear from you!
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