Dear Bankless Nation 🏴,

While there are thousands of DAOs, very few have solid ways to generate income, relying instead on donations or private investment. In this week’s editorial, links writes about the vision for Bankless Card to help DAOs move away from dependency on borrowed funds and work towards long-term sustainability. Read links’ inspiring piece to find out how Bankless Card plans to capture the revenue generated by traditional banking processes and redirect it to support a positive funding flywheel for DAOs.

At this week’s Community Call, there was a wide-ranging discussion on the state of the DAO’s governance, including the general process for gaining consensus around an idea and taking that through to funding or Snapshot, the possibilities associated with delegate voting, and the concept of Code as Law and whether humans should be part of our governance processes or whether it should be fully onchain. Unfortunately there are no notes and no recording for this week’s call, but you can always hop into the Governance channel in Discord and contribute to the discussion.

Season 8 is rolling on, and as we start to experience the change of season IRL, it’s time to change the BanklessDAO Constitution. If you have not yet reviewed the Forum post for bDIP-09, please do so as the revised document is nearly ready to move to a Snapshot vote.

Have a mediocre week y’all! Nah, just kidding 😄. Have a great one!!

Contributors: links, Melasin, Warrior, MiuMan, d0wnlore, theconfusedcoin, anointingthompson1.eth, Paulito, Trewkat, HiroKennelly

This is an official newsletter of BanklessDAO. To unsubscribe, edit your settings.

✅ Action Items

📜 Vote on the bDIP: BanklessDAO Constitution.

📺 Watch Bankless Card’s new pitch video and sign up for early access!

🏛 Participate as an MC on an upcoming Community Call.

🐦 Engage with the DAO’s social media accounts!

🏛 Governance

Proposals in Discussion

🏴 Appointing ComeBackKid as BanklessDAO Rep to DAO Coalition

This proposal asks the DAO to consider appointing Legal Guild contributor ComeBackKid as a representative of bDAO to the DAO Coalition. DAO Coalition started as an informal working group looking at blockchain advocacy and is now formalizing its membership.

⚡ Snapshot Results

Following the recent Snapshot vote, congratulations are due to the newly elected members of the DAO Vault multisig: Icedcool, senad, jengajojo, links, Above Average Joe, 0xLucas, and Rowan!

The Snapshot vote to deposit fees from the UNIv3 liquidity position to the multisig has passed, with 96.12% approval.

Bankless Card Charges Forward

Author: links

Despite being in the depths of a bear market, DAOs continue to proliferate and grow. DeepDAO.io reports 12,764 DAOs operating, more than double the number at this time last year. During this same period, the number of people in the space has more than tripled to ~7M.

People come to DAOs for different reasons, but whatever brings them here, they tend to find fulfillment not available in traditional organizations. DAOs are more than just workplaces; they are communities. They are collections of individuals that become more than the sum of their parts through their shared purpose.

Shared purpose is powerful. So powerful, in fact, that many DAO contributors would jump at the chance to work on their DAOs full-time…except that most DAOs have neither the funding nor revenue to employ full-time contributors.

Bankless Card could change that. By harnessing payment card interchange revenue for communities, Bankless Card could allow any DAO to fund itself through community building.

Purpose Has a Price

Of the 12,764 DAOs mentioned above, a very small number (likely <1%) have sustainable revenue models. This shouldn’t be surprising; most DAOs are founded through member donations towards some shared purpose. Others have private investment from VCs to chase some future revenue model. Either way, the money that is funding the DAO ecosystem is borrowed, not earned.

The state of DAO funding makes sense when you look at the big picture. We’re still early in the technology adoption lifecycle and DAOs are just one more wave of blockchain adoption. We’re in the awkward phase where the excitement for the future exceeds the present reality.

This leaves DAOs in a place where they have to scramble for funding. This is particularly hard for purpose-driven organizations who want to build things that are good for society, and not just for revenue. As a result, web3 grant programs have become a mad dash for funding. The last Gitcoin Grants round disbursed $4.4M to ~3,361 communities — that’s an average of $1,300/community. You can’t run an organization on that amount.

The worst part? This environment has focused DAOs towards grant writing rather than pursuing their purpose. DAOs are vehicles for community building, but instead of focusing on that strength, many are forced to lean on a weakness: capital generation.

Luckily, there is a better way.

The Secret Sauce: Interchange Revenues

It’s no secret that banks make their money by charging individuals fees, and in most cases these fees are unavoidable. One such fee is the “interchange fee”.

Every time you use a debit or credit card, the network operator (i.e. VISA, MasterCard) charges the merchant a small fee (usually 1-2% of the purchase price). The network operator keeps a very small portion of that fee, and gives the rest to the card issuer and payment processor (typically banks).

This is a huge revenue driver for banks. In fact these fees provide hundreds of billions of dollars of revenue worldwide.

What if we could take a piece of that revenue and direct it towards DAOs?

Bankless Card: Feeding the Flywheel

Borrowed from mechanics, the concept of a flywheel is used extensively in the blockchain industry. Put simply: it takes a lot of energy to get a flywheel moving, but once it’s moving, it continues to do so because of its virtuous cycle.

As an example, here’s Amazon’s renowned flywheel:

In this example, you can see how customer experience is the key driver to draw in customers, which attracts more sellers, who create more selection, which increases customer experience. This is the virtuous cycle. More buyers = more sellers = more selection = better experience = growth. But this flywheel needed something to get it moving: lower prices. Amazon raised a ton of money, and it funneled that money into creating cost savings (and outright subsidies) for customers. The result is the company you see today.

If you look at the blockchain industry as a whole, the flywheel looks like this:

The virtuous cycle you see is, like Amazon, centered around user experience. Better experience leads to more users. More users create market opportunities (i.e. demand), which entices builders to create products which increase experience.

Grants and VC funding are providing the lever to get the flywheel moving, but this is a web2 approach to web3. If we truly want to create a new paradigm in web3, we need a new approach to funding. What if, instead of seeking external capital to fund new communities, there was a way for communities to fund themselves?

Bankless Card will enable any community to fund itself using the interchange revenue generated by its members.

Communities will ask their members to use Bankless Card for their spending, and the interchange revenue that would have gone to a bank will instead be directed to their favourite DAOs.

For the average North American, interchange revenues will amount to $5-10/month. Imagine a 1000-person community having $10,000/month to fund their mission. Imagine what we could build when our biggest stakeholders are our community members.

Realizing Web3’s True Value

Blockchain is more than just cryptocurrency, it’s a fundamental change in the concept of ownership. The traditional startup ecosystem created world-changing organizations, but web2 startups have suffered by not including users as owners. They inevitably must prioritize profit over user experience, resulting in degradation of the platform for the very users that made it successful. This is a process Cory Doctrow has called enshittification.

In a way, you could say this is web3’s true promise: to create more resilient organizations by giving ALL stakeholders a seat at the table. But this can only be true when you leverage web3’s strengths: community, transparency, and incentive alignment.

In addition to supporting their favourite causes, users of Bankless Card can accumulate DAO social tokens in exchange for their interchange revenue. The more you contribute, the more tokens you get. These tokens can be used to govern your favourite DAO, finally giving users and members a say in how their organizations are run.

Speaking of which, if you’d like to have a say in how Bankless Card runs, you’re welcome to join us. We’re a DAO, and as such we share ownership with our users, contributors, and investors. Sign up for our pre-launch list or come find us on Discord.

This article was originally published by Bankless Card. You can show your support for Bankless Card, a BanklessDAO project, by minting the post on Mirror.

👀 In Case You Missed It

📑 Topics for the Community Call Roundtable Discussion

As you know, each week during the Community Call there is a roundtable discussion concerning some hot issue within the DAO. If you have an idea for the roundtable discussion, please fill out this form so that we can consider your suggestion while deciding on the next topic! If you have a question about the CC, please send a message in the ⁠community-call-workstream.

👨🏽‍💻 Dev Guild Knowledge Sessions

The Dev Guild wants to help budding devs level up their skills and knowledge by running interactive knowledge sessions with experienced devs in the DAO. If you’re interested, join the chat in dev-general to find out details!

🗓 Set A Reminder

🛡️ Wallet/Security Knowledge Session

Understanding wallet mechanics and safety are fundamental in the web3 ecosystem to ensure the safety of your funds. If you want to learn more about web3 wallets, join the Education Department on Wednesday, June 7 at 13:45 UTC.

⛳ Nation3 Demo

Nation3 is aiming to build the internet's legal system, enforced by a judicial court and powered by open-source legal agreements. Users can create and enter agreements with anyone in the world in seconds.

Join this demo in the Amphitheater on Wednesday, June 7 at 18:30 UTC to learn more.

🌴 Palmera Demo

Palmera is a DAO orchestration tool that enables more efficient and flexible operations. The tool is built around the Safe ecosystem (previously known as Gnosis Safe) and is designed to extend its functionalities through the on-chain module. With Palmera, organizers can manage safes, integrations, automations, and credentials in one place.

To learn more, join this demo in the Amphitheater on Wednesday, June 7 at 19:15 UTC.

🇳🇬 The BlockchainUNN Conference 2.0 in Nigeria!

BlockchainUNN is set to hold the largest crypto conference in Southeast Nigeria this month!

The BlockchainUNN Conference 2.0 will be held June 23rd and 24th at EKPO Ref Hall, at the University of Nigeria, Nsukka, Enugu state, Nigeria. Themed “Blockchain and Beyond; the Future of Blockchain Technology”, the conference will explore the latest innovations and trends in blockchain.

Experts will be on hand to discuss topics like crypto trading, blockchain content writing, design, balancing your tech career with your academics, and so much more. Asides from the keynote speeches, there will be a workshop session to equip participants with practical knowledge that will enable them to become builders and contributors within the space. Topics covered will include technical writing, software development, UI/UX design, visual design, blockchain development, and smart contracts.

To register, visit https://blockchainunn.org/event.

🇨🇦 BanklessDAO x ETHGlobal Waterloo

The next in-person ETHGlobal hackathon is coming up this month between June 23-25! Taking place in the startup and student tech hub of Waterloo, Canada, ETHGlobal will be returning to where it all started in 2017. Here’s what to expect:

• An appearance from Vitalik as the keynote speaker.

• $175,000 in prizes.

• 24/7 access to the Lazaridis School of Business during the hackathon.

• Delicious food and plenty of workshops and support from ecosystem champions such as Gnosis Chain, Polgyon, Worldcoin, Airstack, Lit Protocol, Uniswap Foundation, and many more!

• A chance to improve the Ethereum ecosystem with new and experienced builders from around the globe.

Applications are being accepted until June 19. A few bDAO members will be attending as well, so make sure to say hi! Apply today!

🍔 Grab It While It’s Hot

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🌏 Bankless Africa Newsletter

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