In a panel with the leading crypto-lawyers Irina Heaver and Gordon Einstein, the two industrial giants speak about the emerging nature of DAOs, their potential and how to build one. Drawing from both historical fact as well as frontier developments in the legislative and operational aspects of these novel forms of governance and project-structuring, the panel provided deep insight into the present and possible near future of DAOs.
Actual practical steps in building DAOs
After introducing herself and her co-speaker, Irina opened up the discussion with an elaboration on the ecosystem as a whole.
With so many communities being built right now in a decentralized manner such as gamefi projects, Metaverses and DeFi projects, the questions that we get all the time is “how do we build a DAO? How do we actually do that?” There’s so many people out there saying that they are a decentralized autonomous organization, but what does that actually mean?”
Gordon elaborated by noting how the question on “how to build a DAO” contained a second but equally important component; “how do you get to a true DAO.”
“It’s not just a neat sounding acronym. I would argue that there’s three components but this is open to interpretation.”
Starting with the last one first, the “O” (organization) in DAO, Gordon stated that it’s not simply a smart contract, community or market that operates on the Blockchain that constitutes a DAO. This type of entity is formed by a group of individuals or entities that operate together over time and space to produce a certain outcome.
Moving towards the next prominent trait, Gordon then illustrated how decentralization was a fundamental aspect of this new entity.
Decentralized implies that they don’t have this sort of vertical management structure, that is not necessarily authorized by the state and that the access to them is somewhat democratized.
Finally, the autonomous nature of a DAO comes from the presence of its own internal economy to allow members to pay or get paid. Unless the entity has this capability, it could not be autonomous in any meaningful sense.
Gordon Einstein and Irina Heaver are spearheading the next-generation of crypto adoption both as lawyers and as investors.
Seeing the future in the past: From equity to DAOs
Irina then contributed by reflecting on the historical evolution of legal entities.
People have been pooling resources, time and assets together to achieve a commercial outcome for centuries. They started forming into what are now known as companies or corporations around 100 plus years ago. Shipping companies were being set up like this;
“I buy a share, you buy a share and then we go on a voyage and hopefully make some money.”
Then the railway companies started in this matter. A whole bunch of people will pool resources together and build a railway. At that time, it was an absolutely crazy idea that you can own a little bit of a company.
She noted that the capabilities of these entities to decentralize governance empowered them in ways that previous iterations of private ownership could not.
Gordon noted that linguistics revealed more than most would expect when it comes to the internal mechanics of DAOs.
“I like to tease out language. You say you own a company but you’re part of a DAO. There’s a fundamental paradigm shift in language when you think about it. It’s a fundamentally different role…Being part of a DAO implies that you’re more than just cashing your checks but you’re actively participating in governance and in management.”
The panel continued by elaborating on the legal aspects of DAOs in different jurisdictions, how a start-up may want to approach its path towards becoming a DAO, the potential for future DAOs to appoint executive leaders and therefore hybridizing between centralized leadership and decentralized governance or managements. For more enlightening keynotes and panels on Deep Tech, check out our YouTube Channel or stay tuned for our next Summit in Toronto.
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