DAOs are the future of Web3
The existence — and even awareness — of DAOs has been limited to Web3. This next cycle can change that
Midjourney modified by Blockworks
Over the past few years in Web3, DAOs have gained such popularity that most of the largest and most successful projects operate as a DAO.
Maker was one of the first, but Uniswap, Decentraland, Aave, Ape Coin and many other stalwarts of the space have chosen to decentralize their ownership and governance.
However, until very recently, the existence — and even awareness — of DAOs was mostly limited to the Web3 space. But as the market starts to heat up for what many are predicting is the next macro cycle, DAOs with real-world use cases are beginning to gain traction.
DeSci — the future of research funding?
One of the biggest areas of opportunity for DAOs is in funding for scientific research — an opportunity recently highlighted in the esteemed scientific journal Nature.
Scientific research right now has three big DAO projects: the “flagship” VitaDAO, which focuses on longevity; ValleyDAO, which funds synthetic biology and climate change research; and AthenaDAO, which explores the significantly under-funded field of women’s health.
However, using blockchain to support research, or “DeSci,” was already gaining momentum before the Nature article. PhD researcher and artist Sasha Shilina published a series of pieces in early 2023 highlighting the many opportunities for leveraging blockchain and DAOs in scientific collaboration, including facilitating peer reviews and democratizing ownership of intellectual property.
Read more from our opinion section: We need to decentralize science
Existing tools and models conceived to serve the scientific community are often developed by or funded by large commercial entities. Blockchain and DAOs offer the potential to transform the status quo and give scientists more autonomy over their research.
Making a real-world difference
The practice of using DAOs to fundraise for charities and campaigns first gained prominence in 2022, when UkraineDAO was established following the Russian invasion in February of that year.
However, the practice has now become almost routine during any type of crisis so that people can donate funds in a rapid and targeted way. Charity DAO set up a fund for the earthquake in Turkey and Syria in February 2023, while TemDAO was conceived specifically to protect and support world heritage projects.
Research and donations are two areas where there has been significant interest in DAOs, but we’re also seeing many examples of decentralized organizations being used for other creative use cases. For example, CityDAO is developing a real-world concept for decentralized ownership and governance of an area of real estate in Wyoming. It claims to be the first DAO to have bought land as a registered legal limited company, and citizens are token holders who vote on proposals regarding the land.
Another example is a DAO-owned sports team proposed by the sailing series launched by Oracle’s co-founders, SailGP. The initiative, which began last year, allows wealthy investors to own a share of a sailing team. In the entertainment sector, Creative Vision is a DAO that aims to raise financing for horror movies while offering fans digital assets that tie into the on-screen offering.
DAO ownership gives superfans an opportunity to become more creatively involved with their passion, explore new ways of developing it within Web3, and create new sources of revenue for the endeavor.
DAOs are due a renaissance
The trend for DAO adoption could prove to be interesting at all levels as the coming years play out. Some analysts believe that the sector is taking a hard shift towards traditional finance and enterprise adoption, leaving questions about whether the once-thriving Web3 startup sector can survive. DAO ownership could be one potential solution, providing access to decentralized capital, talent and creativity, and helping to keep liquidity flowing.
On the other side, corporations and enterprises adopting blockchain in any collaborative sense, such as through consortia, could also make use of DAOs as a tool for facilitating governance, automating the allocation of shared funds and raising investment.
Each segment of the blockchain sphere has a renaissance moment, as we saw with the rise of DeFi in 2020 and the craze for NFTs the following year.
I predict that within a year or two, DAOs will have emerged as the next mainstream success to result from blockchain innovation.
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