Mike Dudas explains why most DAOs are neither decentralized nor autonomous

LinksDAO, a decentralized autonomous organization aspiring to reimagine the idea of the golf country club through global membership, illustrates the complexity that can underpin the red-hot acronym. 

While holding a LinksDAO NFT gives users membership rights, there has been some confusion amongst holders as to the extent of what those rights entail. Mike Dudas, co-founder of LinksDAO and 6th Man Ventures, recently discussed the current landscape in an interview on The Scoop.

As Dudas explained during the interview:

“Today we’re in this in-between world where many things that call themselves DAOs are really corporations but have a participatory governance mechanism. So it looks different than a corporation, but it’s not truly decentralized and autonomous in the spirit of what I believe these organizations can become over the coming decade.”

Indeed, LinksDAO perhaps illustrates the diversity among DAOs today. 

Dudas cited ConstitutionDAO as an example of a “legitimate DAO” since fundraising was both decentralized and anonymous. While ConstitutionDAO was formed to raise funds for a specific auction, not all DAOs’ missions are as straightforward.

In the case of LinksDAO, a corporation named LinksDAO Inc. is responsible for fundraising and business development.

While owners of LinksDAO NFTs are given membership rights to LinksDAO, they do not receive ownership rights to LinksDAO Inc.

“The community is more of an advisory board, so we wouldn’t be definitionally a DAO. We would be like a group of members who act as an advisory board to a C-corp.” This division is a necessary reality because, as Dudas puts it, “in America in 2022 you can’t sell an NFT to the public using Ethereum self-custody wallets without KYC that gives somebody ownership of an asset.

Still, regardless of the structure of a DAO, projects are cropping up to serve them with tools, Dudas noted. 

“Right now there are a number of what are called ‘point solutions.’ Early on in the evolution of any ecosystem, what happens is you have solutions that service the most important and critical functions for a DAO.”

Funds like Bain Capital Crypto are eyeing this opportunity, with DAO service providers being one of the focus points of their recently announced $560 million fund.

During this episode, Chaparro and Dudas also discuss:

  • Crypto payments & the Web3 native economy
  • NFT collecting & NFT brands
  • Why people in the sports industry are flocking to crypto

This episode is brought to you by our sponsors Fireblocks, Coinbase Prime & Chainalysis
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves over 725 financial institutions, has secured the transfer of over $1.5 trillion in digital assets, and has a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

About Coinbase Prime
Coinbase Prime is an integrated solution that provides institutional investors with an advanced trading platform, secure custody, and prime services to manage all their crypto assets in one place. Coinbase Prime fully integrates crypto trading and custody on a single platform, and gives clients the best all-in pricing in their network using their proprietary Smart Order Router and algorithmic execution. For more information, visit www.coinbase.com/prime.

About Chainalysis
Chainalysis is the blockchain data platform. We provide data, software, services, and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in over 60 countries. Our data powers investigation, compliance, and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases and grow consumer access to cryptocurrency safely. Backed by Accel, Addition, Benchmark, Coatue, Paradigm, Ribbit, and other leading firms in venture capital, Chainalysis builds trust in blockchains to promote more financial freedom with less risk. For more information, visit www.chainalysis.com.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.