Coinbase’s first employee: why DAO is the second biggest breakthrough in blockchain

Recently, Ethereum founder “V God” Vitalik Buterin talked about decentralized autonomous organizations (DAO), decentralized governance, and DeFi. DAO exists in the form of smart contracts on the Ethereum blockchain, enabling people to collaborate in a non-hierarchical organization, and has begun to emerge in recent months.

At the end of April, the Wyoming State Assembly formally approved the Decentralized Autonomous Organization Act and has been signed by the governor. This means that the Decentralized Autonomous Organization can be registered as a limited liability company in the state, and the bill will come into effect on July 1. This move may pave the way for other states in the United States to follow suit. The Wyoming State Act will allow states and the federal government to expand the scope of recognition of decentralized autonomous organizations, similar to the recognition enjoyed by other companies. Caitlin Long, CEO of Avanti, a digital asset bank, pointed out that if a decentralized autonomous organization is treated as a general partnership by the court, then all participants in the decentralized autonomous organization will be jointly and severally liable. The key to this bill is that unlike ordinary limited liability companies, the Secretary of State of Wyoming can remove liability protection for decentralized autonomous organizations that engage in fraud or illegal activities (unlike ordinary limited liability companies). Therefore, this law can only be used and consulted in valid projects, and it is useless for invalid projects.

Olaf Carlson-Wee, the founder and CEO of San Francisco venture capital firm Polychain, founded the venture capital firm Polychain in 2016, which has nearly $600 million in assets under management. Olaf Carlson-Wee was only 26 years old at the time and was also the first employee of Coinbase. He believed that the first breakthrough in blockchain technology was the creation of “digital currency”, and the second breakthrough was the decentralized autonomous organization. -DAO. It can be said that the concept of decentralized autonomous organizations fascinated Olaf Carlson-Wee. When many people did not realize the importance of decentralized autonomous organizations, he was already in the process of decentralized financial income farming and initial token issuance. I have seen how capital is coordinated, and I have also seen why the market can change so quickly.

Decentralized autonomous organizations use automated decision-making processes and Ethereum smart contracts to implement real-world organizational governance. These organizations include traditional companies led by the board of directors or companies led by other shareholders. Anyone who holds the tokens of related projects can participate in project decisions, such as how to construct the protocol structure and how to spend the internal expenses of the organization. Nowadays, some decentralized autonomous organizations control billions of dollars in funds.

Olaf Carlson-Wee, as the founder of Polychain, has been paying attention to the development of the current decentralized financial industry. About a year and a half ago, the scale of funds raised by decentralized autonomous organizations was only about 1 billion U.S. dollars, but today, the scale of funds raised by decentralized autonomous organizations has reached about 75 billion U.S. dollars. The growth rate of financing has even surpassed the two largest cryptocurrencies by market capitalization: Bitcoin and Ethereum.

In fact, the scale of funds raised by decentralized autonomous organizations is even larger than that of IPOs. Olaf Carlson-Wee predicts that the total amount of funds raised by decentralized autonomous organizations in the next year will exceed $1 trillion. Not only that, Olaf Carlson-Wee also predicts that as decentralized autonomous organizations become more and more complex, the challenges that can be addressed will also become more extensive. This is because as the scope of applications managed by decentralized autonomous organizations continues to expand, it will promote the emergence of more platforms that support scalability, and developers will also have the opportunity to explore more platforms with more complex logic. The applications managed by decentralized autonomous organizations are more like traditional web applications, websites or file sharing and storage applications.

Although compared to traditional governance systems, governance platforms running on software will be more attractive, especially many traditional governance systems will be constrained by “judicial institutions,” but Olaf Carlson-Wee admitted frankly that decentralized autonomous organizations at this stage There are still some problems. For example, it is difficult to figure out how decentralized autonomous organizations allocate funds. Therefore, we should see more “DAO experimental models” in the next few years. For example, some profit-oriented companies will seek With the financial support of centralized autonomous organizations, they will also act as “contract parties” for decentralized autonomous organizations, so that they can learn something beneficial from for-profit companies.

At present, the scale of funds managed by decentralized autonomous organizations is about 75 billion U.S. dollars, and Olaf Carlson-Wee is optimistic that this number will soon reach 1 trillion. I believe that time will prove everything. The future of decentralized autonomous organizations is expected. While achieving the vision of integration with the traditional financial sector, it will also form the latest organizational changes in the world.