Culture and Web3: DAOs and other innovations
Dmitriy Berenzon, Research Partner, 1KX
Dylan Hunzeker, Intrinsic.Capital
Shiv Malik, Founder and CEO, Pool Data
Sean Smyth, Founder and CEO, Pecha Kucha
Dmitriy Berenzon is a Research Partner at 1KX, where he focuses on crypto research & investments. He was previously a Research Partner at Bollinger Investment Group, where he led crypto research & investments, and worked with CoinFund, a crypto-focused investment firm. Prior to this, Dmitriy was an Assistant Vice President with Deutsche Bank Labs, where he engaged with startups, investors, and academia to discover, evaluate, and adopt innovative technologies into the Bank.
Shiv Malik is a Chief Executive Officer at Pool Data. Shiv is the author of two books, the co-founder of the Intergenerational Foundation think tank, an award nominated broadcaster, and a former investigative journalist for the Guardian. After three years advising the Web3 projects, Golem and Streamr, and co-creating a revolutionary framework for monetising personal data, he co-founded Pool in 2021. Shiv fuels Pool’s drive to bring Data Unions to the world and ensure people have control of their data and a genuine stake in the digital economy.
Sean Smyth is co-founder and CEO of PechaKucha, a global social storytelling platform that celebrates people, passion, and creative thought. Sean's expertise lies in business growth and expansion by forging meaningful relationships, partnerships and programs across multiple platforms. Before PechaKucha, Sean was a Global VP and GM at Groupon for eight years and held various strategic marketing roles prior.
Dylan Hunzeker is a managing partner at DOH Investments. Dylan has experience in governmental organizations, NGOs, and start-ups. Dylan is a programmer who has authored seminal papers in the blockchain and cryptocurrency sphere with an understanding of how blockchain applications can be used elsewhere. After her undergraduate studies, Dylan spent time as an associate at Eigen Capital. Dylan eventually became an investment analyst at Iconic Holding which led her to venture capital. She currently holds a research position at the Stanford Future of Digital Currency Lab.
During the panel, the participants defined a DAO, identified some of the DAO sub sectors that have proven to be large initial use cases, shared their opinions on the aggregation of expertise within DAOs, and identified common characteristics of use cases that may be a good fit for a DAO structure.
Defining a DAO
As Dmitriy alluded to, DAOs can be defined in many different ways. One of the broader definitions is
"A group of people with a shared mission and shared bank account."
Inherently this definition needs to be very broad because the use cases for DAOs are an endless list. Among some of the use cases that received the most interest from the panel members were Protocol DAOs, Collector DAOs, Investment DAOs, and Service DAOs.
Protocol DAOs - organizations that collaborate on a specific web3 protocol and typically take part in making collective decisions on the strategy and direction of the protocol.
Collector DAOs - organizations that collaborate and build communities around NFT projects.
Investment DAOs - organizations that collaborate on the management of pooled assets.
Service DAOs - organizations that collaborate in providing specific services to other entities.
Naturally, Dmitriy and Dylan spoke about some of the interesting subversions that Investment DAOs make on the traditional venture capital fund model, In Dylan’s own words:
“With multiparty digital asset management, you’re able to aggregate different sources of deal flow. DAOs do this naturally from the ground up and build bottom up... A scouting program is a good use case, because you can automate payouts.”
This model is almost the exact opposite of the traditional venture capital fund model, where several partners form a highly structured and hierarchical fund that requires a sizable minimum investment from LPs.
Aggregation of Expertise
A common theme explored in the panel was the aggregation of subject matter expertise that DAOs incentivize. As Dylan pointed out, one of the large innovations in the space is that you can suddenly have investment DAOs that wouldn’t have existed thematically because there likely wouldn’t be enough LPs to make high initial investments for very niche theses. As a result, we have seen investment DAOs with theses of supporting women, nonbinary people, and other underrepresented populations in web3, that would have been much less likely to form in traditional investment funds.
However, the concept of crowd sourcing decisions is not novel. Shiv reminded us that we refer to the general accuracy benefit of aggregating many informed participants' decisions as the "wisdom of the crowd" effect, and we see these benefits in markets every day.
The collaboration that is formed in DAOs is one of their most defining attributes. People collaborate on a myriad of goals that tend to be more solitary endeavors outside of the web. This concept was referred to as Multiplayer X by Dmitriy. The thesis is that there is more value in doing just about anything you enjoy when you can share that experience and collaborate with others who are equally passionate about these topics.Through this digital collaboration, DAOs end up concentrating subject matter expertise on a wide set of niche domains.
Shiv summarized this aggregation of niche collaboration very nicely:
“DAOs filter for all of the people with real passion and conviction.”
The aggregation of expertise via digital native collaboration is heavily related to the recent pattern of fractional work that we have seen grow within younger generations. Being a member of a DAO is much more conducive to fractional and flexible work by nature of being a digital first experience. At Decasonic, we believe collaboration drives innovation, and it is one of the reasons we are so excited about DAOs.