The Precedents for Community DAOs

*Disclaimer: The author of this report is a member of $FWB and may own assets mentioned in the report.

In portending the modern landscape for Community DAOs, social media was an obvious canary within Web 2.0. Twitter and Facebook amplified the growth of digital tribes, but also extracted most of the value of these tribes for themselves. Shifting to Web 3.0, digital communities leveled up by introducing native monetary units: tokens. The first instances of community tokens orbited around popular, eminent personalities (e.g. EDM Artist RAC). Whether it was a ready-built social media platform or a famous career, at first, digital communities required a central mass to build around.

As exciting as superfan clubs may be, they are inherently uni-directional. Members may trade in and out of their RAC tokens for profit. Maybe token holders retain exclusive non-monetary privileges like stage passes or opportunities to collaborate with the artist. Dapper Labs plans to enhance the utility of TopShots clips by integrating them into a fantasy sports game, Hardcourt. But ultimately, in most of these cases, one party creates and the rest follow. The next evolution of community tokens need to be more generative and inclusive, weaving a symbiosis between tokens, members, and creation. Instead of top-down, the model should be bottom-up.

Community DAOs

Community DAOs like Friends with Benefits (FWB), BanklessDAO, and PleasrDAO flip the script. Instead of a parent organization dictating the community’s ethos and capturing the value, community DAOs self-organize, plot their own guiding principles, and generate/capture their own value. Just as children mature into adults, so have digital communities.

The genesis of community DAOs is a further human adaptation to social life in the cloud.

Community DAOs are usually initiated by netizens who share passions, skills, or values — they are cultural Schelling points. Donning a community DAO’s token represents allegiance to a digital tribe and the status that goes along with that. Just as belonging to a country club signals something about its member offline, holding a community token signals something about its holder online. A member of the BanklessDAO is a very different netizen than a member of Friends with Benefits. The former is focused on advocating the growth of DeFi and the Bankless mission while the latter might seek curated culture and exclusive opportunities to socialize offline.