Inside City DAO, Community-Governed City on the Blockchain
Plus top DAO trends and shifts
In July, 2021 City DAO made history by becoming the first to own land on the blockchain and to govern it through DAO, boasting a treasury size of $8.5 million. This move was sparked by the landmark DAO law passed in Wyoming in 2021, which recognized DAOs as legal entities.
Notably, Vitalik Buterin and Brian Armstrong are among the early citizens of City DAO, having made their citizenship official through the purchase of Citizen NFTs.
This also made City DAO as the first to experiment with the Network State concept for the future world.
Two years on, how has the City DAO experiment unfolded?
I spoke with Eric, an active citizen of City DAO and podcast host about the decentralized governance, learnings, and the next steps that includes acquiring more land.
The podcast below is an immersive tour into City DAO and the network state future.
As a DAO veteran, Eric also outlines the top trends and shifts taking place across the DAO landscape.
Timestamped notes from the show:
The Q&A below is an excerpt from the podcast, edited for clarity.
Deepa: How did you get into DAOs
Eric: I started deep into the tech world around 2020 during covid and lockdown year. And that led me to discovering my first DAO and learning about its principles. And I thought, "Wow, this is really interesting."
It led me, because that opened up my eyes to the concept of the network state. And in a short version to anyone that's not aware, the network state is the concept of basically a future where the world runs on decentralized networks.
I'm talking about cities, countries voting, all politics done in a decentralized ground up, people first manner. And you really have to think and digest to what that means. It means a complete change of all politics we see on the planet today. And I thought, this is something like Bitcoin, where Bitcoin makes better money for the world. The concept of the network state and the principles in a DAO can mean better politics for the world.
And I just latched onto this concept with City DAO back in late 2021. And that led me down the journey where I'm now, supporting Kraus House, Bankless and LinksDAO and a whole bunch of other really cool DAOs that are out there.
So that's really my journey. I've been in this space for a little bit now and. Working with a lot of contributors, doing a lot of podcasting, a lot of Twitter spaces, a lot of building. We're building DAO tooling right now with our startup. We have a couple grants that are approved and this is my life and it's pretty cool to be here.Â
Deepa: How did City DAO get started? And what's your role in City DAO?
Eric: I discovered City DAO in late 2021 when it was already in the process of formation, and I have been deeply involved ever since. To understand how it was formed, we have to go back to the passing of the DAO Act, also known as Bill 38, by the Wyoming State legislation.
In July the new legislation came into effect, granting the DAO LLC legally enforceable rights in Wyoming, recognizing it as a decentralized autonomous organization.
This was significant because the LLC structure ensured there was no board of directors, CEO, or single individual responsible or liable for the organization. It truly embraced a decentralized framework, which was revolutionary.
At that time, Scott Fitsimones, inspired by the legislation, tweeted about buying land and transferring ownership to a DAO LLC, with governance implemented through NFTs.
The tweet gained traction due to Scott's popularity and connections. Momentum started building, and a generous individual, not necessarily an angel investor but someone with capital, supported the experiment and made it possible by providing funds.
With that funding, a small piece of non-functional land, about 40 acres, was purchased in Wyoming. This physical land exists in the real world, and anyone can visit and experience it. The purchase of the land and the remaining treasury funds were transferred to the DAO LLC corp. This generated excitement and caught the attention of the media.
City DAO ultimately embraced the direct democracy route, for better or worse, through early discussions and the core team's involvement. This means that everyone is equal and involved in decision-making. This takes us back to July, August, and September when the land was purchased, and there was a lot of buzz surrounding an NFT sale.
We released 10,000 NFTs, priced at 0.25 ETH at the time, and they sold out. Some NFTs were held back, but the majority were sold. This raised capital and led to questions about the next steps, such as what to buy and what to do next.
City DAO has explored various directions and established guilds focusing on education, operations, mission, media research, and grants.
We recently bought another piece of land in Colorado and are deliberating on our next project. However, the market downturn affected our treasury. We are also considering opportunities in Turkey and exploring interesting prospects with one of the consulates in El Salvador. There's also a strong interest in buying more land in the United States, and the decision-making process is open for anyone to participate.
As for my role, I joined a few months after the initial launch and have been actively involved since then. I'm part of the media guild and contribute to various initiatives. I'm currently working on a grant for an infrastructure project in the DAO tooling space, which is my primary focus.
City DAO is undergoing significant governance revisions and exploring ways to become more efficient moving forward. That's where City DAO stands today.
Deepa: I have a question regarding the initial NFT buyers of the 10,000 NFTs. What motivated them to purchase the NFT? Was it mainly for the Wyoming land, even though it's currently barren? Were they hoping for future development or any potential return on investment?
Eric: Firstly, it's crucial to understand that the NFT doesn't represent ownership at all. It doesn't grant any ownership of the land or the treasury. The purpose of the NFT is solely to participate in the voting and decision-making process regarding the treasury and the land.
It's essential to differentiate between ownership and governance. Therefore, there is no return on investment associated with the NFT.
When I bought my NFT, I essentially donated money to a remarkable cause and secured a voting position to influence the future direction of City DAO.
In many ways, the initial purpose and benefit of the land have already been achieved. We successfully completed the purchase, registered the court, raised funds, and established relationships with Wyoming senators. Now, we are looking ahead to what's next. This is where the real excitement begins.
I encourage anyone who has been involved since day one to explore the homeland project and join the discussions. This new piece of land presents different possibilities. It could become a co-working space, an event center, or even host a large-scale hackathon with substantial sponsorship. There are numerous options, and collectively we get to decide the future direction.
The Wyoming land has served its purpose by bringing us to this point, and now we are eager to finalize our plans for the next amazing project.
Deepa: What DAO trends are you seeing?
One of the big ones is that in 2020 and 2021, you can say the big focus seemed like direct democracy. Every single decision an organization made was put to a vote, right from the very bottom. It's an empowering concept.
The shift from being overly centralized to becoming excessively decentralized is a cycle humans have experienced numerous times in various places. It happened again in 2021 with DAOs. Everything had to be non-centralized and completely decentralized. We discovered yet again that you can't put every single matter to a vote and remain productive simultaneously. It morphs from direct democracy to a vetocracy.
A simple example would be, let's say we want to conduct a vote to run a podcast. Okay, great. When is the vote going to take place? Perhaps we should vote on when the vote will occur. But then, we need to vote on who will conduct the vote. Then we need to vote on who will manage the voting process for the upcoming vote.
Afterward, we have to decide which software to use and which to avoid, but then we need to vote on when to vote on the software to use. It culminates in a complete vetocracy, where you simply can't get anything done. There has to be a certain level of centralization.
I think many DAOs have realized that neither the direct democracy way nor direct centralization is the solution. So, what's the balance?
Currently, the trend I'm seeing is a movement away from direct democracy and towards exploring what's worked in the past. For example, what types of representative democracies could work, and how can we introduce measures into representative democracy that would be more effective than what we see today?
This concept of liquid democracy, moving away from direct democracy, seems to be the direction DAOs are heading.
Another trend is that there has been so much wheel-spinning and red tape emerging with DAO tooling and governance discussions. In my opinion, there hasn't been enough focus on simply getting things done and being productive.
As a solo bootstrapped founder who started with no capital, no support, and no connections, I had to get shit done on a daily basis every single day or die. That was the reality.Â
Many DAOs I'm part of spend weeks or even months deliberating over the most basic fundamental things before anything even happens.
I think there's a trend, and you could say, a pressing need, to focus more on how we just get more done in the shortest amount of time in the fairest way possible.
To listen to the full interview tune into Spotify, Apple Podcasts or impactdaos.xyz
This post is part of a series on our second Impact DAOs Research + Book update.
If you have any question reach out to me on Twitter or leave a comment below.