🌻What are Impact DAOs?
🌻What are Impact DAOs?
What is (and isn’t) an Impact DAO? Defining D, A, O, MVP and the future
DAO stands for Decentralized Autonomous Organization, a new type of internet-first organization that exists only because technology can now allow anyone to collaborate seamlessly.
Impact DAOs are DAOs focused on making a positive impact on people and the planet. Think of them as internet-native nonprofits and social impact organizations.
Web3 tools like blockchains, smart contracts, decentralized apps (Dapps) along with group video and chat platforms have enabled transparency amongst strangers and collective decision-making. And DAOs are built on top of these very tools.
DNA of an Impact DAO
Impact DAOs operate on the principles of decentralized power, collective decision-making, and transparency.
Key characteristics of Impact DAOs are
Internet native communities
Distributed teams
Decentralized governance
Sovereign individuals and entities
Transparent
Other features of organizing as a DAO
No bosses; everyone is a leader
Co-creation and co-ownership are at the heart of it
Flat, concentric structure vs. top-down, hierarchical system
Decentralized decision-making vs. centralized
Financial sustainability via tokens
Transparent operations and transactions
No physical office; organized online on a dedicated platform
Organized around work streams and pods
Contributors instead of employees
Self-driven, permission-less, entrepreneurial mindset
DAO spelled out
D: Distributed teams + decentralized governance
A: Autonomous as in sovereign entities + individuals
O: Online organized group with a common purpose
How do Impact DAOs start and an MVP
An initiator(s) floats the idea for an Impact DAO on the internet. Twitter is the platform of choice (hence the term “crypto twitter”) since everyone who is in crypto is on Twitter.
People galvanize around the idea. As a first step, they either start a Telegram chat or set up a Discord server to collaborate. The group defines its mission and values and gets started with identifying its activities.
They have at least one full-time contributor who drives the work forward. They could also be all part-time contributors with a couple of people taking the lead in moving the mission forward.
A digital wallet on the blockchain, aka multi-sig wallet, is set up for fund management. The multi-sig wallet is akin to a bank account with multiple signatories. This is a crucial part of the DAO to help build operational trust amongst strangers.
The Impact DAO Wave is Inevitable
Brief History
Impact DAO ecosystem is nascent but fast-growing. The first Impact DAO can be traced back to June 2020 with Elimu.ai setting up as a DAO.
Elimu.ai is an open-source project on Github developing AI-powered learning apps for kids in need and the first one to become a DAO.
Because the purpose of the elimu.ai Community (providing every child with access to quality basic education) transcends geography or political borders, it makes perfect sense for us to be a DAO to organize ourselves. - Nya, Founder Elimu.ai
Mid 2021 is when the next wave of Impact DAOs came around - Gitcoin DAO, Human DAO, Pact DAO, Big Green DAO, Dream DAO are some of the ones launched during this period.
2022 has been the year of DAO explosion, with an estimated 500 DAOs that started out this year. We believe many social impact organizations will launch as DAO first in the future. And the ones that are not DAOs will transition into one.
DAO Transition
There are many instances of nonprofits that have transitioned into a DAO model. They begin by decentralizing slowly, one function at a time.
1. Kimbal Musk's Big Green, a US 501c3 nonprofit founded in 2011, launched Big Green DAO in November 2021 to democratize grant-making. The DAO is controlled by frontline food activists, grantees and donors
2. Civics Unplugged, a US 501c3 nonprofit founded in 2019, ventured into web3 by starting Dream DAO. The DAO is the subset of the nonprofit aimed at onboarding high schoolers into web3
3. Pact DAO, a US 501c3 nonprofit founded in 2020 to provide mutual support in NYC, completely transitioned into a DAO in 2021. Pact DAO has gone a step further to be the first to amend their bylaws to be DAO friendly
4. Gitcoin, a web3 crowdfunding platform that started out as a traditional tech company in 2017, transitioned into a DAO in May 2021.
DAO Advantages
The DAO way of doing things has many advantages for social good practitioners. The web3 ethos and technology provide higher moral ground and the ability to scale coordination and impact.
Ukraine DAO started three days before Russia attacked Ukraine on February 24th, 2022. They raised 8 million dollars in 5 days. The DAO used a blockchain multi-sig wallet for receiving, storing, and managing funds, Non-Fungible Token (NFT) to fundraise, Telegram and Discord to collaborate, and Twitter and Twitter Spaces to communicate.
They had contributors from all over the world. The blockchain provided transparency, with every single transaction viewable and immutable. Ukraine DAO remained uncensored while Patreon suspended the Ukraine nonprofit Come Back Alive from its fundraising platform.
DAOs and web3 provide a new model of organizing that’s humane and inclusive. The model is best suited for our current internet-governed lives. It's easier to meet and collaborate with people on the internet than in real life. Besides, one gets to work with people from anywhere and everywhere. This kind of global collaboration helps bring diverse perspectives to problem-solving. In the end, it builds a kind world that learns to work together despite differences.
Some of the Key DAO Advantages
They are borderless and open. Anyone from anywhere can participate.
Fast, permissionless set-up
Transparent organizations operating in public
Access to global expertise
Collective ownership and decision-making
Built-in incentive for aligned actions. The community decides on the activities and rewards people for actions that create value.
Tokenomics to fund operations and impact without reliance on donors
Peer to peer transactions eliminates middlemen
Radical transparency with the use of blockchain, every transaction is accounted for and viewable publicly
Engaged Donors, volunteers and other stakeholders through DAO governance
Internet-level scale and speed
Fast, easy and low cost crypto fundraising
Censorship resistant
Bullish on Impact DAOs
Impact DAOs are the future of building the better world we know is possible. In the future, DAOs will become the most natural way to organize for causes big and small.
Just like the open-source code of the early internet gave rise to a new way of organizing and doing business, the core primitives of web3 will change how we work together to facilitate solving our most pressing problems. These developments will allow Impact DAOs to become a mainstream medium for building a better world.
Onwards 🚀✌️
If you have any questions reach out on Twitter.
Special thanks to the Impact DAO community members that came together on Twitter Spaces to help define Impact DAOs.
This post is part of a series on the Impact DAOs Research + Book project. This project is by Impact DAO Media, a collective of folks in web3 + impact + media. The team members on Twitter are @tranimal, @katerinabohlec, @Abeers123, @Poplinecreation, @crystaldstreet, @0xSardius, @karanth_harsha, @actThreeCC, @0xSiddhearta, @Value_Strat, @zaldarren, @astrocruz_s, @ashisharora27, @pop_timism, @alkohlmist, @ikonoklast, @bjuglas, @BlockchangeSol1, @sandeepdas9179, @happyplace888 + Kim on LI
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