Corporations accumulate capital, while DAOs accumulate participation and focus on returning benefits to all participants.

When scarcity is the dominant economic model, capital accumulation is paramount: this is the current status quo. In our current model, the most successful vehicle for accumulating and allocating capital ever is the corporation. Corporations, companies, represent the bulk of the private sector. But what happens if capital is no longer scarce? Do we need corporations or should we look for something different and better?

Not many things are always scarce, but human attention ranks first. Decentralized Autonomous Organizations (DAOs) and cooperatives may be better tools for accumulating attention and engagement. In DAOs, cooperatives, and staking systems, members make key decisions for the benefit of the members, and the rewards for participation flow back to members in proportion to their engagement and constructive participation.

There has been a lot of discussion about the lack of clear, proactive rules to pave the way for the crypto ecosystem to resume growth. These are essential to bringing in good actors. We don’t need a lot of new rules about what’s not allowed, because almost all the bad things that happened in 2022 are already illegal. Borrowing customer deposits without consent? Not illegal. Pumping and dumping tokens? Not illegal. Borrowing multiple times against the same asset? Not illegal.

The good news is that there already exists a legal framework and organizational structure that DAOs can use to establish their real-world credentials: the cooperative. Cooperatives (co-ops) have been around for a long time. While the traditional corporate sector is roughly five to seven times larger, the top 300 co-ops in the world still have a combined revenue of over $1 trillion.

DAOs and cooperatives fight predatory digital monopolies

Cooperatives are member-owned, and unlike corporations, key decisions are made on a one-member, one-vote basis. However, profits are distributed among members based on participation, so those who contribute the most also reap the most.

Cooperatives solve what I believe is the biggest problem of the Web 2.0 era: the creation of so-called predatory digital monopolies. The story of many Web 2 businesses goes something like this: a smart entrepreneur comes up with an application that connects buyers and sellers in a digital marketplace. They invest heavily over many years to develop the digital infrastructure that coordinates information, products, and payments in the ecosystem. They invest in sophisticated analytics, reputation management systems, and community engagement growth.

All of this is fine. No one can deny that massive investments are required to build the infrastructure that makes everything from online auctions to ride-sharing to consumer shopping a frictionless digital experience. The problem comes with success, because these systems resemble natural monopolies. As they become dominant, they begin to raise prices and slowly but surely shift from adding value to the ecosystem to extracting value from that ecosystem.

We need policies and approaches that anticipate our future. That future is rich.

Now imagine if all of these big players were cooperatives instead of corporations. Imagine if these cooperatives, after paying off their initial investment with a good return, started distributing excess profits to network participants.

That sounds great, but if there’s a flaw in this vision of future abundance, it’s that we’re always approaching this end state and never arriving. Some things, like real estate and human attention, may never be infinite. Zero marginal cost is not the same as zero average cost. Zero interest rates don’t mean you can walk into a bank for any reason and walk out with a ton of money. Good ideas still need teams, investors, customers, and profits.

The good news is that cooperatives may be a good fit here. A recent white paper from law firm Orrick, Herrington & Sutcliffe explores whether cooperatives are DAOs.

The ideal legal model for a digital ecosystem also outlines how cooperatives can work with for-profit businesses to accumulate capital and provide investors with exit opportunities. Cooperatives can take a stake in or even fully own a for-profit business. They can also sell these stakes, allowing for-profit investors to exit without giving them near-total control of the digital ecosystem, while alleviating the pressure to permanently extract more value from the community.

From B Corps to cooperatives to DAOs, the future of business is one that harnesses the power of communities, builds attention and engagement, and uses it for the public good. We need more policies and systems to make this happen.

DroneLinkDAO

The community governance policy is aimed at the business scope controlled by smart contracts. All operations can only be executed after the DRONE holder initiates a proposal and is approved. The implementation details can be referred to the DroneLink business white paper. Smart contract + DAO + AI (open API interface) frees your hands and ensures the efficiency and fairness of DAO operations.