The Pomp Podcast - #814 Understanding DAOs w/ Yury Lifshits

Starting point is 00:00:00 What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now, let's kick this thing off. Yuri Lifshitz is the CEO and founder of SuperDAO. SuperDAO is an operating system for DAOs, decentralized autonomous organizations. In this conversation, we talk about what DAOs are, why they're important, how that space is evolving, what it means to build an operating system to help more people more efficiently actually build and manage DAOs, and also why this is going to become a hot sector in the crypto industry. I really enjoyed this conversation with Yuri, and I hope you do as well. Before we get into this episode, though, I want to quickly

Starting point is 00:00:42 talk about our sponsors. Today's episode is brought to you by Exodus, the world's leading desktop, mobile, and hardware crypto wallet. They offer beautiful, user-friendly blockchain products that sync across all of your devices, making it easier to send, receive, and exchange over 150 or more crypto assets in one place and with world-class customer service available to you 24 7 exodus always has your back but the fun doesn't stop with staking and trading they recently launched a new nft marketplace where you can buy and sell your favorite nfts on the network by partnering with the popular nft platform magic eat it they're offering the full monty on verified collections with more added every single day ready to check it out

Starting point is 00:01:22 for yourself? Run, don't walk. Over to Exodus.com slash Pomp for your free download today. Again, if you want the world's leading desktop mobile and hardware crypto wallet, go to Exodus.com slash Pomp today. Today's episode is brought to you by Arculus. Cryptocurrencies offer boundless potential, but how will you protect your crypto? Arculus is the next generation crypto cold storage wallet that combines the world's strongest security protocols on the Arculus key card with an easy-to-use Arculus Wallet app. With over 20 years of experience developing leading-edge secure payment technologies,

Starting point is 00:01:54 Composerve created Arculus to give you the power to protect your financial future. You can buy, store, swap, send, and receive your crypto with a simple tap of your Arculus key card to your mobile device. Your private keys are encrypted on the Arculus key card and they never leave it. Stay safe from hackers with no cords,

Starting point is 00:02:13 no charging, no Bluetooth. The only person accessing your crypto is you. Buy yours today at GetArculus.com. Today's episode is brought to you by Coinbase Wallet, your key to the world of crypto. Crypto isn't made to just buy, sell, and hold. With Coinbase Wallet, you can do so much more. You can collect more NFTs, earn more with DeFi, and trade more than 4,000 tokens. Whether you're looking to play, stake, spend, or just explore a trending new protocol,

Starting point is 00:02:38 Coinbase Wallet is your key to more. Long-time holders already know that wallets are a must-have if you want complete control of your crypto. That's why Coinbase Wallet makes self-custody simple while providing the safety and security of the most trusted name in crypto. Visit Coinbase.com slash wallet to learn more. Again, Coinbase.com slash wallet to learn more. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions

Starting point is 00:03:06 and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Let's just start real basic. What the hell is a DAO? Everyone is excited about DAOs.

Starting point is 00:03:28 You're going to give me an education here. What is a DAO? Yeah, so there is actually two definitions. There was an old one and a new one. The old one is Decentralized Autonomous Organization. That means something that is on a blockchain, it uses smart contract instead of bylaws, but describes how everything works. And that smart contract overrides any human decisions.

Starting point is 00:03:52 So code trumps kind of human relationship. And it's also decentralized. That means, you know, no one controls it. People have just tokens in it and whatnot. So now there is a much more broad definition, which is basically as long as you use blockchain as a system of record of ownership, it can be adopted. So it can be centralized and it can have human governance versus smart contract governance. So right now, it's basically any blockchain company is a DAO.

Starting point is 00:04:16 Got it. And so when you think about this new version, like what's changed from the old version in terms of how you think about DAOs today? You know, 100 times more people got excited about, you know, starting a DAO. And not all of them want to have it decentralized from day one. Not all of them want to have it like fully governed by smart contracts. And what people are excited about is, one, is fast path to liquidity. So not waiting seven years to go to NASDAQ, but instead going to Uniswap or being traded on Coinbase or FTX. And ability to be outside of national borders, bring people together as contributors and team members,

Starting point is 00:04:56 kind of simplified employment or alternative employment or like the role of contributor instead of the employee. And also investor interest. So there is a lot of investment capital available for DAOs or projects who look like DAOs, who are eventually going towards token-based liquidity and not public stock market-based liquidity. And so because there's so much money flying around and the valuations for DAOs are basically 10x what they are for traditional startups, every smart person I know is thinking very hard, why am I not starting a DAO if those projects at the same level of traction are valued 10 times higher? All right. So let's talk about like what happens in a DAO, right? If I joined a DAO today, like what would I do? Do I just hang out on Discord all day or what do I do? Yeah, there are four things. One is governance. So you can make decisions, vote on things. There might be like elections. So you can vote for individual roles like treasurer. You can decide on funding allocation, like grant making, things like that. Um, so governance is one number two is a shared asset ownership. So you just can own things together.

Starting point is 00:06:00 So you can own real estate together or tokens or NFT art or physical art or wallets or like, you know, venture, venture equity, whatever. Number three would be, uh, um, uh, token gated, uh, content. It's kind of, you know, uh, anything that is for members only. So if you, if you're part of that, you can go to private events, physical online, read private information, uh, have access to private deal flow. Um, and, uh, let's see. So governance content, um, yeah. And the fourth one is just building things together. So it can be, you know, a service that like thou that actually builds

Starting point is 00:06:36 the product together. So you actually, you know, write code, design things, uh, build, uh, virtual universes, uh, like metaverse cities together, things like that. Got it. Now talk to me about regulations. This legal, like how's this work and does the U S treat it differently than international or what, how do you look at that? Yeah, three things are legal. The fourth thing is questionable. So the following things are legal. One is selling NFT memberships that clearly represent utility. So if you have like a social club where it's like, you know, everyone who has an NFT can go to the concert and read the private folder with like cool investment opportunities only you guys are seeing privately. That's legal because it's an NFT. They have access to content and deal flow, but it doesn't have the expectation of rising in price.

Starting point is 00:07:19 So it can be a tradable NFT, but you're not promising anyone that it will go like 10X or whatever. So utility-based, utility-oriented NFT memberships are legal. Then the second thing that is legal is raising through promises of future tokens from private accredited investors.

Starting point is 00:07:39 So if you create like, you know, traditional Delversi Corp with token warrants or softs, promises of future tokens, and you go only to funds like Andreessen Horowitz, it's, again, it's legal because the investment, it's a private transaction, so you're not publicly promoted. Yeah, it can be seen as a security, who knows, but it's a private transaction with a credit investor. So even if it is a security, you're still in the clear. The other thing is you can also give NFTs for core early contributors. Again, if it's just one NFT contributor, more like, you know, VIP tier kind of founding member. And again, utility oriented kind of NFT based, not say compensation, it's more like, you know, it's like giving, you know, when you build a university and put the name of a donor on the building.

Starting point is 00:08:25 So that's kind of OK. And then another thing is OK is giving also private token, non-tradable, non-transferable locked tokens to early employees and maybe a participant in your marketplace if you're building like a marketplace. So this is all legal. The final step, which is, you know, token liquidity, when you put the token on exchange, either decentralized like Uniswap or centralized like Coinbase, and say, hey, now you can trade for the token, that's a big question mark. by that time and most new DAOs, they delay that for, you know, anywhere between six months and three years. It can be perceived as a security. And then, but by that time you have so much liquidity, sorry, utility built in. So you, you provide for token holders, some sort of utility as well. So if you feel like you're a 90% utility by that time, you probably can risk even like being present in the United States. Other than that, you, yeah, you exclude United States when your token becomes publicly traded on exchanges and say, yeah, we don't know if it's security

Starting point is 00:09:20 your TLC or both, but just to be safe, we just exclude US. But only the last step you need to exclude US when you have this publicly traded. Got it. And then talk to me about how somebody goes through actually launching one of these things. Is it just like you click a couple buttons and all of a sudden you got a DAO or is it similar to setting up like a corporation or like how does this work? Yeah. So basically you need two pieces. One is smart contract and second is interface. So smart contract is a code on the blockchain that describes in the programming language how your organization works so like who has the nfts or tokens who has the rights who can make decisions can this contract be upgraded uh who can make changes can you uh print more nfts

Starting point is 00:09:59 or extra tokens and uh if you do you own any wallets do you have any agreements with off-chain entities things like that so basically it's a smart contract it contains the the regulation for your entity is similar to bylaws it's similar to what you file in delaware but it is written in programming language not in the english language now the second part is all kinds of interfaces so interface is um basically a way for a human to number one uh you know generate a smart contract and deploy it on the blockchain number two see who the members are or you know send information to them as a kind of investor update so you know nft holder update or token update uh you can uh see all your wallets kind of treasury dashboard uh and things like that yeah you can connect this

Starting point is 00:10:44 port you can also make this port only available for the token holders or nft holders and things like that so essentially you can think one smart contract and there are many operating uh interfaces that can interact with with a smart contract kind of basically checking hey who are the current members of the daos what privileges do they have what roles tiers and so on so uh i'm actually a founder of a company called super dao and we help with both so we help for new daos to generate their smart contract and we also uh provide out of the gate kind of building interface for a member directory and use the pressure dashboard and dashboard, which is kind of kind of job board for your DAO. But our smart contracts are on the chain, you know, very clear kind of standard. So

Starting point is 00:11:25 the other apps and interfaces can interact with our smart contracts as well. Got it. And so when you think about this, help me understand in terms of like, what's an example of a DAO that you're like, yeah, they're doing things the right way. That one seems to be working and is successful. Yeah, so there are two generations of DAOs. There is what we call classic DAOs and modern DAOs. The classic DAOs were all for crypto-native kind of insiders of crypto economy. So they were for DeFi and protocols. So those are DAOs that manage any protocol or DeFi protocol.

Starting point is 00:11:58 I would say 1inch or Threshold Network have a very functional DAOs with very clear management system and so on. um and uh the modern dao is the dao is that the more like maybe centralized at this at the start and decentralized over time and um um have called some you know off-chain assets together things like that so this uh so many so many so many verticals there are investment daos like blizzard dao flamingo dao the lao there are um property daos that own big property together or aspire to own big property together, like, you know, Constitution DAO that everyone heard of, but also Krauss House that aspire to own an NBA team and Lynx DAO that wants to own a golf course and many others.

Starting point is 00:12:42 There's upcoming Ski DAO that wants, you know, own skiing slopes and things like that. And then another one is Learning DAOs. There are people, it's more like a membership club where people come together to learn more about things and they basically buy NFT to have access to the shared learning experience. Things like Odyssey and Invisible College, there are a few more. And then another category would be almost like the reinvention of union or freelancer guild, where people get together and brand themselves as very special professionals in their field and then say, hey, come to our DAO and we'll find an individual contributor

Starting point is 00:13:17 who can work for your project. So they can do talent representation in a way. So there are vector DAO for designers and there is developer DAO for developers. And there is also upcoming DAO for salespeople. Got it. And then when you start to think about something like governance, one thing that I always go back to is if there's 100,000 people trying to make decisions, usually no decision gets made, right? And like in like kind of legacy world without DAOs, et cetera. How do you think about whether you can technically coordinate 100,000 people to make a decision or not?

Starting point is 00:13:46 Like, is that good for an organization? Is there tradeoffs that you think about in terms of democratization of decision making versus the downside? What do you think there? Yeah, yeah. There are so many lessons in history that can be reapplied for DAOs. So first of all, like, let's look at the national governance system. So we had, you know, absolute dictatorship, and then we have, you know, monarchy or constitutional monarchy, and then we have, you know, parliamentary republic, and then we have, you know, direct

Starting point is 00:14:12 democracy with elected president and so on. So the same can be in DAO. So you can elect the executive director, you can elect representatives, you can vote for individual roles you can vote for annual budget uh you can delegate your vote to other people to vote on your behalf called liquid democracy uh so all kind of schemes are available because it's very programmable governance system and uh much more than programmable than you know real world uh so i think we will start with copying a lot of stuff that was in politics and then we'll go even beyond that um so the thing that on a practical level the things that we've

Starting point is 00:14:49 seen are number one is uh limit uh community governance do decision uh decision-based governance not proposal-based governance so proposal-based that means you know anyone can write any kind of proposal people vote and then it's you know a DAO has to follow that's too much and maybe probably too much as you said that may be too chaotic and too powerful for most DAOs not for all and then what people do instead is they they specify the specific type of decision that can be made like hey it's an investment DAO we just vote on deals do we want to invest in this deal do one like let's say it's a form down and people can vote on next speaker to go live on your show and they can only approve or disapprove the speakers and that's that's the limit of their

Starting point is 00:15:26 power uh and uh maybe i'll get voted out of the stage tomorrow yeah you can maybe maybe you pick the speakers and like if people vote against them you have to immediately take them off air or something yeah i don't know so yeah is your thought process that every organization could be a DAO or will become a DAO over time? Or is it just for specific types of organizations? Yeah. So if you use this broad, modern definition of a DAO, which is basically any on-chain organization that doing something on-chain with money together, then I would say everyone will be a DAO. Like there will be no exception. Like 100% of organizations will be a DAO because as simple of a thing as like owning a wallet for a business is basically make you a

Starting point is 00:16:08 DAO. Because now there is a single wallet that owns by your organization. So you are on-chain organization because you have on-chain assets. So if you start paying money out of it for, you know, crypto freelancers or, you know, holding more tokens because you use them to spend for, you know, gas fees and whatnot, you're on-chain organization. So you kind of end up. So basically you can be a DAO without a DAO style governance because you have a DAO style asset management, or you have a DAO style employment, or you have a DAO style private resource sharing. Yeah. It's fascinating when you start to think about how this plays out. And so in terms of right now in the United States, people have to sell these in the private market to

Starting point is 00:16:47 accredited investors. And then once they become liquidly traded, they're supposed to block out U.S. investors. Is that going to hamper kind of the success of some of these assets or these DAOs as we move forward? Yeah. So essentially, I think what happens is that more DAOs are getting created they eventually become yeah reached to the point when they have a publicly traded token let's say primarily on the outside of the united states and then they're under pressure to maybe move most of the operations on outside of the united states or things like that and eventually it creates a pressure uh against the uh you know governing bodies of uh united states to consider whether you can continue to outlaw uh publicly traded dows or you create some sort of uh

Starting point is 00:17:35 meaningful regulation so essentially maybe you create a new concept which is not the same as uh publicly traded uh securities on on nasdaq you create a subclass i don't know called it crypto asset or crypto security or crypto or something crypto equity i don't know to create a new sub class of things and you regulate it but not as tightly or a little bit more flexibly than traditional equity and therefore you kind of legalize uh dallas back in the united states so the hope is basically for scenarios similar to uber and um and airbnb so i think the the the heart of the security law is to protect the retail investors so protect retail investors who might be a little less educated on the matters and might be victim to you know too aggressive of a marketing

Starting point is 00:18:20 of dow style securities uh so the question is can dallas be traded while still protect the interest of retail investors and i hope the the solution can be found the problem though is the United States is under no pressure to do it soon. So because of that, basically DAOs getting traded primarily outside of US for now, but as more and more of DAOs created, the total volume of, you know, DAO equity grows, there would be eventually more reason

Starting point is 00:18:46 for the United States to legalize rather than continue to outlaw. John, what questions you got? Hey, Yuri, thanks for joining us. My question is around just, what are the financial incentives for people to join a DAO besides the governance part of it?

Starting point is 00:18:59 Yeah. So what kind of utility the DAO can give to members? So let's see. So typically, a few things. One is governance. Number two is access. So access to private events, private content, deal flow, ability to go on an opening night to an NBA team owned by a DAO, kind of VIP tickets, some kind of private lounge type of stuff. number three would be um let's see uh access uh governance and then uh services of a DAO so every DAO has services like oh not every but many DAOs so if it's a DAO building you know a hotel you know using the you know staying at the hotel if it's a if it's a NBA franchise going in if it is a golf course going playing golf so basically access to uh to the services that DAO provides that's very special for individual DAOs it's a learning DAO like taking classes from that DAO so and so on and uh and then yeah i guess those those three kind of primary services content governance um yeah and then what are the different ways to show your participation in a dow

Starting point is 00:20:08 yeah so we we're definitely heading to the thing people call on-chain resume so essentially very much like your wallet currently holds the the nfds you own it will hold the the dows you part of as as well as special role or level or tier you have there. So essentially, and that would be on-chain, hopefully shared standard across all the services. So if someone participated in 10 DAOs and SuperDAO, my company, and then the 5 DAOs formed elsewhere

Starting point is 00:20:34 and then start their own DAO and so on, they can have on-chain the resume that contains all those achievements in one. It's kind of distributed LinkedIn in a way. Yuri, explain SuperDAO in terms of building the infrastructure. Is your thought process that you can basically make it

Starting point is 00:20:49 With a couple of clicks, somebody can create it, somebody can manage it, could shut it down, do whatever they want in terms of the infrastructure you're building? I absolutely love the question about shutting it down. I really love that because that's a part of our roadmap. And I think I have not met yet another DAO company, DAO formation company, that thinks about this solution. I think it's very important. So the simplest terms, we're Shopify for DAOs. Shopify made it easy to start an online store. We make it easy to start a DAO.

Starting point is 00:21:17 We help with two parts. The first part is smart contracts. So it's basically writing the regulation and description of your DAO on chain. So where basically it's a code that describes how you have a membership that's based on NFTs. So is it based on token or both? Who can get the tokens and NFTs? How many? Who can override or extend, expand the smart contract? Is there a governance system in place or not just yet? Is there shared assets like wallets and off-chain property? Are there any agreement with third party vendors or representation outside and so on? So we help any DAO to form a smart contract. We do it two ways.

Starting point is 00:21:53 One is kind of more manual. It's like, you know, you call me, like, or telegram me, whatever. So we start working on that. Number two, eventually there will be a bunch of drop-down kind of forms. We'll just click a bunch of checkboxes and we generate a smart contract based on the needs. Number two is we give interface. Yeah, so our operating system, operating interface from SuperDAO has four major parts, which are member directory, treasury dashboard, news feed, and dashboard.

Starting point is 00:22:20 So those are the four primary things that we need to basically employ people, see the assets that you have, inform people about the new stuff and deliver content, as well as see who else is in DAO. But we're also eventually building an app store for DAO extensions, so bringing more DAO tooling in the system so that DAO creators can use third-party tools as well. Got it. If you look out over the next 10 years, what's your kind of best hope for DAOs in terms of like what this grows into? Yeah, I would say let's employ 100 million people. So let's more people work for DAOs. Let's all the smart kids work for DAOs. Because in DAOs, you can be anonymous. In DAOs, you can work for 10,000 parallel. In DAOs, you can work for one DAO for one week and here in three weeks and here what.

Starting point is 00:23:05 and you can do like you know you do the grant application here you did successfully now you're in the core team now in the three core teams now you have an agency that you know serves out the dao so kind of faster careers i want more economic opportunities globally so more you know kids from all kinds of countries to participate in dao economy i want dao ecosystem to be more compliant and more kind of meeting halfway so regulation adapting to dao's and dao's adapting to regulation so i think we need new legal language very much like with gig economy hopefully in a more friendly way for both parts, because I think there are a lot of questions, question marks about, you know, regulation of gig economy. Yeah. I want to see a million DAOs. So the mission of SuperDAO is

Starting point is 00:23:44 help launch a million DAOs. I love it. Where can we send people to find you on the internet or find out more about SuperDAO? Yeah. So Twitter is the best. So SuperDAO underscore COO, or my personal URL, it's in one word. Yeah. Follow us on Twitter. We also host a bunch of private workshops, like helping creators to figure out how to plan their specific DAOs. Just DM me

Starting point is 00:24:07 for more details. Amazing. Thank you so much for taking the time to do this. I feel like people have no clue what DAOs are

Starting point is 00:24:15 so this is super helpful. Thanks for you to helping us educate more people and bring more people to DAO economy. You got it, man. All right.

Starting point is 00:24:22 Talk soon. Thanks, Yuri. Thank you, guys. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one.

Starting point is 00:24:28 Make sure you're subscribed on Apple, Spotify or your favorite podcast player. and if you're looking to try to transition to get a new job in the bitcoin or crypto industry we've got you covered head over to palmscryptocourse.com we've developed a curriculum with the top teams across the industry it's a three-week intensive training program with over 50 events packed into that three-week time period go to palmscryptocourse.com to learn more and i'll meet you guys for the next episode

The Pomp Podcast - #814 Understanding DAOs w/ Yury Lifshits

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.