Week in Review - Crypto-democracy and DAOs

Saturday, September 25, 2021 • By Lucas Matney

Hello friends, and welcome back to Week in Review!

Last week, I wrote about how Apple was facing the GoPro problem with its new hardware. This week, we’re talking a little bit about how crypto acolytes want to remake venture capital (and democracy).

Thanks for joining in — follow my tweets @lucasmtny for more.

the big thing

This week was TechCrunch’s big annual event — TechCrunch Disrupt — and I had the opportunity to have some very cool conversations onstage about a handful of topics related to the burgeoning world of crypto. I talked to the CEO of the startup behind NBA Top Shot about all things NFTs, I discussed some hot regulation topics with one of the heads of Andreessen Horowitz’s crypto arm, and I had a fascinating panel discussion with a pair of investors about something called a DAO.

Now, if you’re pretty deep in the crypto world, DAOs might be something you’ve run across. DAO stands for Decentralized Autonomous Organization and it’s basically a type of organization that can be run in a “trustless” manner on a blockchain. Members of the group don’t need to know who anyone else is, but they can collectively work together to make choices on how to proceed as a singular unit.

Now, if you’re outside the crypto world, that probably sounds very, very niche.

But crypto acolytes see DAOs as a better way to run society, using technology to help groups make decisions in a more honest and distributed way. While seemingly every crypto vertical is a balance of high-minded ideals of the future and quick-flowing present day dollars, DAOs seem to be less visible at the moment.

Right now, DAOs are used for a handful of things. Crypto startups or protocols use them as a way of governing certain decisions they make, and they’re a nice way for them to give some agency to their users. Investors have also shown interest, creating little pseudo venture capital firms using the structures to propose investments and vote on where to deploy capital as a singular unit.

I’m generally pretty intrigued by the wider possibilities of allowing anyone to turn into a partner at their own VC firm. A couple of weeks ago, I got the chance to speak with the Ian Lee and Will Papper, the founders of a startup called Syndicate which is basically creating a protocol and tools to help people build their own DAOs. They had just raised a $20 million Series A from Andreessen Horowitz.

“We believe that the world of investing is in a multi-decade transformation towards being more decentralized and democratized,” Lee told me.

Syndicate helped Manasi Vora, who I spoke with on my Disrupt panel this week, build her DAO called Komorebi Collective, which I covered back when it launched. She told me this week that DAOs take down most of the institutional barriers towards raising a fund and Syndicate enabled her to raise and launch a DAO-based fund within days.

“Investing is an expression of values,” Syndicate’s Papper told me. “Our goal is community driven investing.”

Robinhood and its contemporaries are at the forefront of breaking open financial institutions and allowing everyday investors to access faster moving public money markets. There are (obviously) a lot of risks at play there, but there’s also plenty of previously gatekept reward.

Meanwhile, crypto, which has seen pretty scant regulation to date, was born in the image of pure democratized access. The issue has more been making that access simpler from a technical standpoint, which platforms like Coinbase have made strides toward.

In the end, all these exchanges do is offer a way for people to buy stocks and coins as an individual, just as structures like equity crowdfunding might allow a person to invest in startups as an individual. DAOs offer something more fascinating — an opportunity for investors to access a different type of capital market as part of a community that can move as a singular unit and decide how to direct itself.

Group investing is an interesting starting point, but DAOs could go anywhere from here.

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other things

Here are the TechCrunch news stories that especially caught my eye this week:

China bans cryptocurrency transactions
Crypto prices took a dive Friday as China announced that cryptocurrency transactions were now illegal in the country. The broader crypto world seemed to take the admission in stride as China has been increasingly hostile towards the industry in recent months.

Facebook CTO steps down
One of the executives closest to Zuck stepped down this week after 13 years at Facebook. CTO Mike Schroepfer announced he’ll be leaving the company, with Facebook confirming that AR/VR head Andrew Bosworth will be replacing him in the role.

The EU isn’t a big fan of Facebook’s Ray-Ban glasses
This week, an EU privacy regulator took issue with the low-key nature of the LED indicator on the Facebook Ray-Ban glasses which lets people know that the user is recording a video.

Apple wallet vaccination cards are coming
Vaccine cards are being required at more establishments and Apple is looking to standardize the experience a bit with a vaccine card inside the Wallet app. No details on when exactly, but the new feature will arrive in a future iOS update.

Nintendo is making a star-studded Mario movie
Here’s a fun one. In the week’s most unexpected news, during a Nintendo Direct, the company announced that there will be an animated Mario movie with a hilariously star-studded cast. As someone who recently re-watched the classically bad live action film, I have high hopes that they can at least outdo the previous film.

Image Credits: Surrogate.tv

extra things

Some of my favorite reads from our Extra Crunch subscription service this week:

Seth Rogen talks weed
“…Rogen explained the problem faced by every cannabis company. ‘How do you convey your message in a highly regulated industry and have the audience not perceive that you are jumping through a million regulatory hoops while conveying that message,’ he said….”

Peloton CEO talks connected fitness
“…But the past few years haven’t been all smooth sailing for the company. From increased competition and early supply chain struggles to a treadmill recall that shook up the industry, there have been several recent roadblocks on the company’s climb…“

Ryan Reynolds talks ‘authentic marketing’
“…At TechCrunch Disrupt 2021 this week, we sat down with Reynolds to discuss how startups can use “fast-vertising” (a term Reynolds coined), which involves treating real-time cultural moments as a springboard, to build their own brand buzz…”