How DAOs Will Change The Future of Work
In this article, we dive into the subject of DAOs and investigate how they’re currently changing the working life of early adapters all over the world.
Written by Chidera Anushiem
Technological revolutions over time have transformed how we work as humans. In the medieval ages, the plowing turned hunters into farmers; the power loom turned those farmers into factory workers; computers turned those factory workers into office workers, and the internet has turned office workers into remote workers. Now, there is a new sheriff in town that promises to significantly change how we work: Web3.
The World Wide Web's next iteration is known as Web3. It has a higher degree of decentralization, transparency, and shared ownership and is based on blockchain technology. As Chris Dixon of the venture capital firm Andreesen Horowitz rightly noted: Web1 was read-only (directories), Web2 was read-write (social media), and Web3 is read-write-own.
Work as we know it appears to be changing thanks to Web3, and the vehicle that will drive this charge is decentralized autonomous organization, or DAOs.
What Are DAOs?
DAOs are owned and operated by people who own enough of the DAO’s tokens, which function as a kind of cryptocurrency. There are many variations of DAOs today, some more decentralized than others. DAO operates everything from media organizations to venture capital and grant programs, video games, social media, technology and financial platforms, and philanthropy.
DAOs: More Autonomy Over When, Where, and How We Work
As DAOs proliferate, instead of having just one employer and a 40-hour work week, we will be able to contribute several hours a week to multiple DAOs. This is already typical among early space users. Today's creator economy, with a population of vloggers, bloggers, and podcasters, can give us a glimpse of what the Web3 world of work looks like, with the typical creator earning income from many projects such as writing, coaching, consulting, content creation and monetization on various platforms like SubStack and Patreon.
A New World With Freedom to Do Fulfilling Work
DAOs' emphasis on technology may lead to the automation of simple algorithmic tasks, freeing up contributors to be their most innovative and helpful selves and allowing them to spend more time on high-value activities — the kind that promote the flow state — and less time on repetitive, shallow tasks.
DAOs will provide people more choice to select initiatives whose goals and visions resonate with them, employment that correspond with their abilities, and coworkers who share their values, despite the fact that 85% of the world's workforce is currently disengaged at work. Additionally, this might lessen the stress caused by heavy workloads, work-life conflicts, a lack of autonomy, and office politics.
More Decision-Making Power
DAO contributors will be able to cast votes on important decisions using the native tokens of their DAO. Snapshot, which is effectively a decentralized voting system, allows you to see what kinds of decisions DAO members are already voting on. Having said that, Vitalik Buterin, the co-founder of Ethereum, the open-source blockchain that serves as the structural layer for the bulk of Web3 applications, has questioned the present voting mechanisms. So, it is conceivable that this kind of voting will change over time.
A Paradigm Shift With Different Compensation Structures
The majority of people who contribute to DAOs complete individual tasks, also known as "bounties.” These bounties could be “moderate our Discord community” or "build a messaging app". These bounties exist even though DAOs are likely to have a core group of contributors who may be employed full-time and even receive salaries (at least in the early stages). Work-to-earn (W2E) contributors can produce native tokens, fiat money denominated in USDC, or both.
For example, members of some DAOs can contribute an article and earn its native tokens. These tokens can be traded on exchanges such as PancakeSwap and Uniswap for other tokens or for fiat, and they represent ownership in a DAO — which is limited by the number of tokens in its token pool. Think the total number of shares a corporation is limited by and you’re not too far away.
Token owners could then "stake" their tokens using websites like Yearn. Tokens are effectively deposited into a central liquidity pool through staking, where they are then utilized to verify blockchain transactions. Stakers receive an annual percentage yield (APY), which is essentially interest that, in some situations, can be more than 20%.
A large number of youths in the developing world are already benefiting from the play-to-earn (P2E), a version of the work-to-earn (W2E), paradigm. For instance, players can gather, breed, grow, battle, and trade Axies in the token-based video game Axie Infinity. AXS, the game's native coin, now has a market cap of over $1 billion, down from its over $9 billion all-time high. However, unlike conventional video games where players don't truly own their characters or ancillary items like swords, Axies are owned by players as NFTs (non-fungible tokens), which they can then trade for real money on the game's market.
The average Axie player, usually a teenager from Nigeria or the Philippines, makes between $5 and $20 per day playing the game, roughly equivalent to or higher than the average daily wage for those nations. Axies' prices can rise over time, with some going for as much as $300 ETH, or about $1 million. In 2021, Axie Infinity made $1.3 billion in revenue, which can be attributed to transaction fees on the Axie marketplace and breeding fees.
The learn-to-earn (L2E) model is another variation of this model. RabbitHole is one website that pays you to research Web3 applications. Other variations include use-to-earn (U2E), which involves making comments and using Web3 social networking tools like Minds, as well as create-to-earn (C2E), which involves creating content or creating artwork in exchange for tokens.
Furthermore, token owners have the option to speculate on their tokens, the prices of which may rise over time based on supply and demand, just like traditional shares in a firm.
A New World Where You Can Work From Anywhere
DAOs don't just care where you work; they also don't care when you work or how you look while you're working. In fact, many contributors are only identified by their NFT profile pictures, while many traditional managers with apparent trust issues continue to hide behind the guise of "team bonding" to send everyone back to the office in the wake of the pandemic. In places where only the quality of your work matters, no one cares about how you look.
The majority of DAO contributors will likely work remotely, form relationships in online communities like The Sandbox, and gather in person for a few days or weeks each year for motivational conferences and retreats instead of working from a central office all year and taking two to four weeks off.
Traditional businesses that require employees to spend two to three days a week in the office typically assemble their workers to a single location, typically near a central business district. Companies with such antiquated and mobility-restrictive jobs will probably find it harder and harder to compete for Millennials and, in particular, Gen-Z talent.
Although some would contend that DAOs, like many gig economy businesses, endanger labor rights, DAOs are working to resolve this. For instance, the digital employment cooperative Opolis assists DAO donors and contractors with setting up their 401K retirement plans and health insurance.
With regards to trust and governance, the DAO movement is still in its infancy and faces a variety of unique difficulties. The answers to issues with user experience (UX), security, scalability, and regulatory clarity are necessary for Web3 to be widely adopted. However, given the rate at which new talent is being hired, funds are being raised, and innovative ideas are being developed, mainstream proliferation may occur sooner rather than later.
Ultimately, Web3's central promise is more rewarding work that is outcomes-focused, with a more equitable allocation of ownership and incentives. This is a future worth looking forward to. Most importantly, this is a future worth creating.
This article is written by Chidera Anushiem as a part of enter.blog's bounty program. Do you have an interesting topic, series or subject you think would be fitting for enter.blog?
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PUBLISHED 11TH FEBRUARY 2022
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