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By Benjamin Gabay, Chief Marketing Officer and Co-Founder of CrunchDAO
The advent of Web3 technology led to the long-awaited realization of the Decentralized Autonomous Organization or DAO. A DAO is essentially a distributed online community that works towards shared, community-driven goals. But these organizations are not just another forum or message board; they have the capacity for real remuneration and complex governance; a microcosm of societies in the physical world. This capacity for meaningful, organized coordination makes them the ideal medium for a new way of working that could benefit all parties involved.
Why do we need a new style of work?
The average person will spend one third of their life at work. It is an integral part of many people’s identity. For generations past, all manner of work was enough to provide for a family or purchase a house, and before the advent of many digital technologies there was a clear boundary between one’s work and their personal time. Today, stagnant wages and the inability to disconnect are causing millennials and Gen Z workers to reevaluate the relationship with work.
If compensation isn’t adequate, the work has to at least be fulfilling; and so many of these younger generations have turned to freelancing as an alternative to salaried work at a company. On paper, being one’s own boss should give you the freedom to pursue only the projects that interest you, and the flexibility to work only when and where you need to. But the reality is that working at your own pace like this can make it challenging to realize enough growth to maintain a secure income.
Companies developed the way they did for a reason. There are limits to what can be done as a one-man operation. Humans have only come as far as we have by cooperation with each other, leveraging the skills of others to compliment our own, and embracing a multitude of opinions and inputs to further objectives of the community. But, mirroring human society, a king hoarding all the wealth breeds discontent among the serfs who labor for the kingdom. Companies try to avoid this problem through various bonus and profit sharing schemes, but realistically, salaried workers still have very little say in the management of a company and the distribution of its profits.
Finding the middle ground in a DAO
A new work style is emerging that can upend this binary between salaried employment for a company and freelance work, pulling advantages from both. Leveraging DAOs to create working cooperative, like-minded individuals are able to pool their skills and work towards a common goal, while retaining the freedom and flexibility to only work when and from where they like. In this way, DAOs offer the freedom espoused by the younger generations while also affording the benefits of a collective, such as scalability and long-term profitability and growth.
In terms of remuneration, the token economies of DAOs mean participants are the owners of their work. This offers two advantages: payment for their hard work, and governance power to steer the direction of the organization. What’s more, the administration that usually comes with this kind of power is divided amongst the token holders, who vote to make decisions. This takes pressure off individuals, which can create a single point of failure, and makes the organization agile enough to respond to changing conditions.
Another advantage offered by DAOs is the remote nature of the work. While fully remote work became the standard for many during the pandemic, more and more companies have been rolling back work-from-home policies and calling employees back to the office for at least some of the work week. The inherently decentralized nature of DAOs ensures remote work is here to stay for those embracing this form of organizing.
Great for the worker, but how about the business?
You might think that anything that makes employees happy must be a sacrifice for the business; but studies have shown that a happy workforce can lead to greater productivity and performance for companies overall. Workers contributing to a DAO are paid in tokens based on their performance, making them active stakeholders in the project. This ensures everyone involved has aligned interests and a greater incentive to succeed. Furthermore, every token holder becomes a de facto brand ambassador for the DAO. What’s more, paying people in tokens leads to dramatic reduction in administrative costs.
Another boon for business: the distributed nature of DAOs means the work force can come from anywhere in the world. Not just cities, as might be the case with companies that have centralized headquarters or office infrastructure, but rural areas as well. This gives DAOs an edge when it comes to harnessing a diversity of ideas that weeds out groupthink and spurs innovation.
Surely it can’t all be good
On paper, the DAO model appears to benefit everyone. So, what’s the catch? One piece of the pie missing is oversight; ensuring the social and employment protections—such as maternity leave, sick leave, unemployment benefits—that have been hard won by workers remain in place for the vulnerable who need them. While these rights could be implemented by DAOs if they so choose, and that may even enhance their competitiveness for attracting new members, they were not handed out willingly by companies out of the kindness of their hearts. Just like with traditional companies, countries would have a responsibility to mandate certain levels of protection and security for DAO members to prevent a race to the bottom and ensure a fair labor market.
Another potential shortcoming of DAOs is governance. As with any democracy, giving everyone a say doesn’t inherently lead to positive results for the wider group. Some splinter groups might try to seize power and redirect the DAOs resources elsewhere, or members’ whose interests change and fall out of alignment may feel the need to leave for greener pastures. However, these issues are nothing new; and characteristic of democracies in general. Governing a collective is a complex matter that requires a robust constitution, with problem solving mechanisms that satisfy the community as a whole.
While they have only taken shape in recent years, the concept of DAOs has existed since the 90s. As with any new technology, a DAO is unlikely to become a panacea for the social issues plaguing today’s workers. The DAO structure is probably not going to replace the traditional company, especially for such industries as manufacturing, and it may not even replace freelancing. But the inherent structure of DAOs provides another viable option, giving people more choices to navigate their own career futures, giving them ownership of their work, and bridging the gap between their labor and its value.
About Benjamin Gabay
Benjamin Gabay is Chief Marketing Officer and Co-Founder of CrunchDAO, a research team of data scientists leveraging the power of collective intelligence and Web3 to produce next-generation predictive financial insights. Ben is a seasoned entrepreneur with an exit in the marketing industry and experience across Europe and the Middle East. He is also currently an Adjunct Professor of Marketing at HEC Paris. He holds a double degree in French and German Law from the Paris Panthéon-Sorbonne University and Cologne University and a Master’s in Political Sciences from Saint Joseph University, Lebanon.
About CrunchDAO
CrunchDAO is a research team of data scientists leveraging the power of collective intelligence and Web3 to produce and sell next-generation predictive financial insights. Named as one of 2022’s most promising start-ups in STATION F’s Future 40, the community seeks profit from patterns in the stock market, using a democratic reward-driven tournament model to produce and sell trading signals that generate returns, regardless of market conditions, to top-tier investment firms and hedge funds.
The CrunchDAO tournament brings decentralized scientific innovation (DeSci) to the world of finance. Over 2,000 data scientists and 400 PHDs compete to accurately predict the stock market, earning rewards for their predictions based on the performance of live financial data.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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