Lisbon Surfaced The Evolution of DAOs, Solarpunks vs. Lunarpunks and Web3 Social Media

As people from all over the world gathered in Lisbon, “gm’s” turned to “bd’s” and the metaverse met in meatspace for a week of events and fanfare kicking off with LISCON.  Whether it was in the compact hilly cobblestones that lined the city streets or the rooftops overlooking the Pombaline skyline, there was a certain…

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Lisbon Surfaced The Evolution of DAOs, Solarpunks vs. Lunarpunks and Web3 Social Media

As people from all over the world gathered in Lisbon, “gm’s” turned to “bd’s” and the metaverse met in meatspace for a week of events and fanfare kicking off with LISCON.

Whether it was in the compact hilly cobblestones that lined the city streets or the rooftops overlooking the Pombaline skyline, there was a certain electricity in the air. Leaders from all over the Ethereum community and beyond came together to bring attention to developments happening with DAOs, DeFi and NFTs, and most importantly, communicate the narratives and memes shaping the direction of the space as a whole.

Although he was not in attendance, Ethereum co-founder Vitalik Buterin’s influence was apparent as initiatives to build native Web3 social media as well as create new governance models beyond coin voting were brought to attention.

Liscon attendants waiting for session to start.

Web1 to Web2 to Web3

During his speech, Steven Waterhouse of Orchid Labs gave a stark reminder to everyone in the room of what the foundation of Web3 is laid upon — the cyberpunk ethos of enfranchising people through transformational technology that overcomes systems of oppression.

That spirit was the driving force that filled the hearts and minds of the online communities who populated the Web1 era of the 1990s. As Web2 emerged in the 2000s, a new social contract was signed between users and the platforms in which users exchanged their data in order to use these platforms without charge. Yet over time, this social contract became heavily unbalanced and an internet once filled with the potential of digital liberation became a failed utopian experiment. A new system of extraction materialized in Web2 where platforms would capture immense amounts of intrusive information about individuals, leading to an Orwellian digital surveillance state hidden in plain site that is constantly pillaging data from its users without abandon. Yet over the past decade, the internet of information that defined the last two epochs made way for the internet of value that is at the core of Web3, which ultimately reimagines the humanity stack that is rooted in the dreams of Web1 but is crafted through novel incentive models and coordination games.

A New Type of Social Media

Aave founder Stani Kulechov presented his vision for how social media exists on Web3 in his presentation at Liscon. Instead of entities capturing data from their users, he flips the model on its head by empowering users to own their data. Fundamentally, Kulechov views a Web3 native social media as a simple way to broadcast relationships, in addition to a tool for users to understand their social graphs, done by mapping connections with NFT ownership, DAO membership, DeFi interactions and more.

As new social media platforms such as the one that Aave is developing come into being, the “metaverse funnel,” which assimilates users in the Web3 world, will continue to take shape.

Launching Into the Metaverse

In its current state, how people are onboarded into the crypto metaverse depends on a variety of factors such as location, access to capital and usability preferences, among other things

NFTs have become a primary vehicle by which individuals begin to interact with Web3. Although, the pool of people is still relatively small. Currently, less than 600k registered addresses have made at least one transaction on OpenSea but there’s also surging interest. When Coinbase announced their waitlist for their own NFT platform, over 1 million people signed up on the first day alone.

While marketplaces remain the top of the funnel for the NFT and greater metaverse ecosystem, individual projects can utilize them as well for their own initiatives. For example, during his talk at Liscon, Gitcoin founder Kevin Owocki announced “The Greatest LARP,” an interactive game that is meant to educate players on the concept of Moloch and rewards those who participate fully in it with NFTs. Moloch is the Caanite God of Child Sacrifice which represents humanity’s failure to coordinate and is derived from Slate Star Codex’s piece Meditations on Moloch which would later become Moloch DAO’s namesake.

Meanwhile, for many in developing countries, the top of the metaverse funnel are play-to-earn games which serve as an alternative employment opportunity for individuals to support themselves and their families. The most popular play-to-earn game is Axie Infinity where 2 million monthly active users breed and fight Axie creatures (which are NFTs) and complete side quests and farm resources within the Axie universe.

The Philippines alone is home to 40% of all Axie players and the game has had such an effect on the archipelago nation that stores are now accepting Smooth Love Potion, Axie’s in-game currency, as payment.The government also recently announced plans to tax players (which caused a slight panic throughout the community).

DAO Participation

After NFTs and play-to-earn games, the second step in the metaverse funnel is becoming an active participant in a DAO.

As the individuals become more and more adjusted to the world of Web3, it is only natural that they join associations that align with their interest in the same way they would outside of it. DAOs themselves are reminiscent of a phenomenon that 1800s French civil servant and aristocrat Alexis de Tocqueville noticed while touring America — that individuals of the new nation would form voluntary associations of all kinds. And they believed that associations strengthen democracy and extend it beyond the scope of public offices by bringing it down to people who share a common interest with each other. DAOs are the modern incarnation of Tocqueville’s observations.

There are all kinds of DAOs that exist today and a cambrian explosion of them have formed, including social DAOs, venture DAOs, impact DAOs and more. As more people join DAOs, tools need to be created to both coordinate efficiently within the DAO and facilitate DAO to DAO, DAO to consumer or DAO to sovereign entity communication.

In terms of external DAO communications, The DAOist is an organization whose goal is to bridge those in the crypto community to those outside of it and serve as a resource for DAO education. Convinced that DAOs can be the trojan horse of legitimate acceptance, DAOist founder Felipe Duarte, better known as Elementary Complexity, made the point that if 15% of a nation are employed by DAOs, then it will be much harder for governments and regulators to take action against them and alienate their constituents.

DAOs are still in a nascent stage, but many in the industry bet that they will become the primary employment vehicle of those active in the Web3 world.

Kevin Owocki presenting at Liscon

The Evolution of DAO

The term DAO has evolved greatly since the early days of Ethereum.

Kei Kreutler of Gnosis Guild explained in an interview that around the time of The DAO hack, the term was more synonymous with a more traditional corporate structure. After the infamous The DAO hack came a DAO winter, a time where DAOs had to do some soul-searching to find a schelling point to once again rally around.

The real turning point for DAOs — that is nearly universally agreed upon — was the rise of Moloch DAO, a grant-giving organization which solved a fundamental fundraising issue through the ragequit function. Moloch DAO’s model has been forked a number of times and summoned several other DAOs including MetaCartel Ventures and Marketing DAO. Not to mention, the narrative of “defeating Moloch” has been a persistent meme in the Ethereum community. Kreutler notes that over time, DAOs have evolved to have a larger spirit of good-will for solving coordination problems and stalemates.

As Kevin Owocki stated “DAOs are about reengineering the laws of economic gravity to favor coordination over defecting to Moloch.”

From this perspective, Kei speculates that in the future, new token standards will be created that better serve mandates of DAOs to better reflect the emerging laws of economic gravity Owocki mentioned. For example, a token standard could be created whose value is determined by the outcome of an event or frequency of participation. What makes these standards possible to exist is the liquidity that can be provided to them in AMMs that are similar to Uniswap that instead of being ERC-20 based are “ERC-2000 based”.

In terms of communicating within DAOs, Kei theorizes that in the future, DAOs will become more adaptable organizations with granular governance processes that go beyond just simple token voting. Sub-DAOs can exist within DAOs that have their own ways of coming to decisions such as proof of personhood, proof of participation, or others, and then come to the main DAO with their decisions.

More Punks

Two narrative frameworks that were apparent at LISCON were two forks of the cyberpunk philosophy, solarpunk and lunarpunk. And these actually complement each other more than most people realize..

For example, both ideological frameworks are in complete agreement that DeFi and DAOs are ideal bottom-up organized systems that empower individuals from the ground up and both would like to see a world where data is owned by individuals rather than extracted by ominous organizations. In addition, both concur that the ultimate goal of Web3 is to build parallel systems that individuals can enter and be viable alternatives to current power structures.

While there is a difference of opinion in how to execute said goals, the diversity of opinion allows for wider experimentation in different areas of the humanity stack.

DarkFi Rising

Representing the mindset of the lunarpunks is Amir Taaki and his team at DarkFi, an anonymous DeFi network that utilizes zero-knowledge proofs that create a network of private money legos.

With intellectual groundwork rooted in agorism, lunarpunks hold anonymity not only in the highest regard, but absolutely necessary in order to protect individuals and DAOs from overbearing and hostile actors. Taaki contends that DeFi will inevitably split into two. Regulated Finance or RegFi is a severely water-down version of DeFi that is not much different than TradFi today. And then those who want sovereignty in their interactions will be forced into the darkness.

He states that the biggest issue facing the crypto community today is that the internet of value does not fully live up to its revolutionary potential because it bends too much towards the current incumbents of capital and power and the pressure to conform largely comes from those who benefit from the currently dominated fiat-based system.

Although DarkFi has been in development for four years, the meme of DarkFi has recently come into the conversation on Twitter with notable accounts such as Cobie and Crypto McKenna tweeting the term to their followers.

DarkFi ad at Liscon

Private Play-to-Earn

Just as there is a metaverse funnel being created to onboard people into Web3, a ‘dark metaverse funnel’ will be created as well. A challenge that Taaki and his team have to overcome is “How do we bridge this financial power that is gained within Web3 to the local economic sphere of a local economic community and then after that economic power is realized how can it be bridged to the political sphere to enact meaningful change?”

A possible solution to this is the creation of privacy-based play-to-earn games similar to Axie Infinity into DarkFi that helps bring in local communities in developing countries who Taaki sees as vital in empowering and he concludes from this dynamic, a new technological class can emerge.

Open-Source Maximalism

Gitcoin’s Owocki describes himself as slightly more solarpunk than cyberpunk (or lunarpunk for that matter) and approaches building solutions in Web3 from the perspective of how we can better solve coordination problems.

He calls himself an “open-source maximalist” and states that Gitcoin’s primary mission is to be an incubator in coordination experimentation with quadratic funding coming out as one of its first major successes. Owocki thinks solving these coordination problems could also mean solving bigger problems, such as climate change, infrastructure development and the funding public goods, He sees the challenge to overcome coordination failure as a massive ‘choose your own adventure game’ that ultimately defines the metaverse, and it is up to people to decide how to play it.

The choices players have in this game are between optimizing coordination in order to make a better world or defecting into private utopias that are walled gardens.

Through DAOs, Owocki states that there is now a better mechanism to communicate in a transparent and immutable way in order to build a more open financial system. Because of this, we have a much stronger foundation for coordinating the distribution of goods than ever existed before. In this system, he believes that solarpunks and cyberpunks can work together to build a world that aligns with their vision of empowerment to as many individuals as possible.

As attendees return back home and continue their journey into the crypto metaverse, these conversations on what DAOs are and how to build the Web3 stack will carry on. Many factors, including inside crypto and outside, such as what narratives people rally around, regulation, and more will play into what results are seen. Web3 will continue to be an increasing force in the daily lives of significant portions of the global population.