“Everyone on Web3 has been awesome and we could not have asked for a more warm welcome,” said Kimbal Musk (pictured, bottom center), the brother of Elon Musk who also sits on the board of both Tesla and SpaceX.
He was introducing the Green DAO, a non profit that seemingly aims to get people into gardening.
“Growing food improves your nutrition security and mental health, gets you into nature, and opens your eyes to the weather volatility created by climate change,” the non profit said in a lite paper.
It also gives you tax free food, or indeed awesome wine, with goods that you grow yourself not counting as income. The problem often being that people don’t quite have any land to grow anything on, or lack the time.
The DAO could potentially help with both. Fundamentally the structure is simple. Donations in, that is money you give for free with tax deductible benefits, then we have the DAO that organizes the money out part in grants.
Donors get a vote on what grants their money will go to, and only the donors. We can’t just buy a token. Above them sits an executive committee that has to effectuate the vote by approving funds distribution. The latter means they can, if they wanted to, not approve.
So rather than decentralized, this is a hybrid traditional and digital structure. It’s a mix of centralized decision making and digital polls. Its chief benefit being that you know where the money is going to exactly, especially if the grants are paid in eth.
The grantee then will have to transfer them to fiat if he/she wants to do anything, at which point we’re back to more traditional avenues, unless some joke about gardening being yield farming does laughingly manage to sneak through, in which case we could see fully, from end to end, where the eth is going.
Transparency here extends to donors themself. They have to provide ID so as to claim the tax deduction, and even if they don’t want to claim it, they have to provide ID for sybil resistance.
“A high donation threshold and KYC verification disincentivizes a sybil attack by making its cost increasingly prohibitive,” they say.
This so being another sign that we’re dealing with something a bit traditional because not many in this space would try and protect themselves from being given money for free. In fact, we’d be very happy to see anyone sybil attack our donation addresses in the footer below with bitcoin or eth.
Their worry seemingly being someone would take over the DAO with too many donations, taking over the votes. Well if that person cares so much, it is free money we’re talking about, and there is an executive committee. The worst that could happen is you have to copy paste the DAO code and launch a new one, the sybil can then keep his. Now if he comes here as well, then maybe you’ve invented something amazing, a way to trigger rich people into donating their money for nice stuff. So copy paste again and turn all America into gardeners.
With this being just America and limited to it, because they’re of course too poor to afford seeds. But one useful direction for this DAO could be, especially in deprived areas where they have commie blocks, to grant donation to buy farm land in the vicinity so that the community can farm on it.
Something like that kind of exists in UK anyway, commons plots. The problem so being chiefly that people don’t have time and those who do, probably can afford some $3 seeds and a bit of water.
So this DAO doesn’t quite explain what it will actually do. It just says it will take money to give it in grants for gardening. It doesn’t say why gardening needs such grants or what sort of grants there might be. But it’s the public that has to put forward proposals and donors from the public have to approve them.
So one thing that could happen here is this becoming more about innovation in gardening. A way to invest in startups that are focused on gardening.
Because although these are grants, nothing stops the grantee from saying: ‘and as a thank you we’ll give 10% of the profits to the DAO,’ with the profit motive doing the rest.
Maybe the executive board will stop it, but once you’re playing with kids, the grandpas have no say anymore because the kids will just copy paste you out of it.
It might lose its charity status however, but is anyone really into charity for gardening, in the world’s richest country? Giving seeds to grandmas in Africa, or even Lebanon nowadays, sure. ‘Donating’ to ‘educate’ on gardening in the Youtube country though?
“Big Green DAO’s initial governance protocol will be premised on an ERC-20 token contract, for minting and distribution of fungible $GARDEN tokens. Each token is identical in value and voting weight and the contract policy will remain open so that tokens can be minted or burned as necessary. These tokens, will be made non-transferable by default to prevent their accruing of value.”
Yeah that will have to go too. Not the token part, that’s the whole point, but you can’t transfer it? Maybe in grandpa county, but hopefully this is for young people to garden because grandpas garden already.
So, some of these points are maybe why Elon Musk, Kimbal’s brother, said: “Web3 sounds like bs.” That’s after Kimbal twitted his gardening.
Web3, Out VC-ing VCs
That was in reply to Sam Altman, the former Y Combinator guy who rode the investment prohibitions wave, after stating:
“Prediction: average venture returns for investments made in the 2020s are going to be much worse than those from the 2010s.
There’s a flood of capital, and I have never heard so many price-setting VCs openly say they’re willing to accept much lower return targets.
Also, let me just simp for a second and suggest that web3 might still have 2010s-like returns. (But most VCs will miss it).”
His, potentially very simplistic point, is that while previously family offices and even pension funds did not play with startup investing, some of them are starting to and VC capital has reached half a trillion.
He then engages in supply and demand to suggest there will be more competition so VCs have to take less of a share from entrepreneurs, and thus returns will be lower. By lower here he probably means rather than 10,000x, it will be 1,000x.
We don’t necessarily disagree because it’s a prediction about something we don’t know as it hasn’t happened, but we can argue that unlike bitcoin, there is no fixed limit here. Both supply and demand can change.
The increase in available capital for fundraising can also mean an increase in entrepreneurs and a potential reduction in tech monopolies with the returns potentially translating to the same, but more distributed.
So for VCs in particular, they will get more competition including from this space, but where startup investing is concerned, arguably there isn’t much evidence to suggest there would be lower returns holistically speaking, all else being equal.
One thing that is not equal is the acceleration in innovation. In some industries, it is more concrete. Cars can fly or gene sequencing might lead to a breakthrough or you have the proper raw stuff of hydro or fusion power.
In this industry it is less concrete, but it is in some ways like innovating on oil, with the oil here being money itself or finance which lubricates all other industries.
Web3 is a way to bring that oil to the web in a native manner. This is an old term, for this space, revived now for unclear reasons except it’s a wider term than defi.
A simple definition of Web3 would be a publicly owned web/website based on decentralization and/or tokenization.
Coinbase, for example, is Web2. Andreessen Horowitz invested $20 million in Coinbase in 2013 and has turned that into $11 billion now in 2021. You invested nothing because Coinbase never gave you the choice so in some ways Horowitz engaged in rent seeking from the public by charging them fees to use Coinbase while not allowing them to participate in its venture.
Uniswap is Web3. The public could buy it from the get go and choose whether to participate or not from the early stages, and that means you’re not paying fees on Uniswap if you choose so by having their token which translates to your fees effectively being returned.
What Coinbase does is ultimately determined by Horowitz we’ll say in a very simplified manner, or was until public listing. Nowadays it is public, but without new shares. Regardless, again in a very simplified way, it is fundamentally things like JP Morgan and other banks that determine what Coinbase does now because they custody and in some cases hold the greatest percentage of shares.
It is not quite a coincidence that out of all investors, it is JP Morgan that Musk the elder is now fighting in court for his 2018 tweet that rekt the shorters.
Uniswap does what we want it to do, what the public wants it to do. JP Morgan could however get a significant percentage of Uni tokens, but we, or rather kids, could also copy paste JP Morgan out of the platform entirely if desired.
So Web3 is public ownership in two ways: forking, which is what decentralization means fundamentally, and token based decision making. It has other elements, bots can roam free and so on, but that’s the fundamental part that has people excited for it because it brings back the capital in capitalism to the society as a whole. A society that until now has been a spectator in watching things like Facebook grow while VCs made billions from that public using it, with the public getting farmed effectively in return, instead of getting rich. Now that public, at least the ones that want to, are not just passive spectators or consumers, but active participants in deciding both what to fund and how it should develop from the get go, not once they’re mighty giants and even then beholden to the likes of JP Morgan that gives the public IoU shares while doing with the actual shares whatever they want to the point pension funds had to sue them to stop them from lending their shares to short sellers, but how do you really enforce that really?
DAO-ing The World
Tesla, this is something we can’t copy paste and that’s where things like DAOs come in. The DAO, in its more interesting form and when it’s standalone rather than a component of running defi or web3 projects, is basically an investment vehicle in ‘physical’ innovation or startups.
SEC said that’s illegal, but this was in ancient time as far as this space is concerned and ultimately no one really cares about SEC except when thinking how to checkmate them because the law is ofcourse applicable only by general consent.
The devs can go Nakamoto if absolutely necessary, or to Europe and firewall USA with the original DAO devs being Europeans. And it is that original DAO why we don’t quite have a standalone DAO now, rather than SEC or anything else.
After that whole spectacle in 2016, a most beautiful one, this space needed time to attempt something like it again, with the question of course being whether it is now time.
Things like the Constitutional DAO, and maybe even this Green DAO if it develops into funding innovation rather than dull and boring ‘charity’ for rich grandmas, could open the cracks to lay the foundations for a bigger theme that could develop.
Since you can’t go wrong with predictions, we could say the groundwork might be laid now with the actual show starting in the next halvening, but since that is more about sentiment or about how loudly it would happen, it might suggest it is perhaps time to start considering the opening or liberalization of investment in the wider economy and industry which necessarily would probably happen through a DAO.
That’s a revolution of sorts, but no one reads these pages so keep it hush because VCs won’t like it, the SEC won’t like it, old banksters will hate it, but young bankers will love it, Europe should love it, coders will have a field day, and the public, both left and right, should be at least excited because they’ll all become CEOs, at least the ones that want to participate.
And this is coming, with a lot of failure but never forget that the boom which the 1933 Act uses as justification for investment prohibitions gave us things like cars, the TV, airplanes, electricity itself, fridges, washing machines, and all the good things.
The public certainly needs to be educated if it wants to participate, diversify, but while we had investment prohibitions we still had a bust in 2008 and what we got out of it?
If we’re gone have busts anyway, we might as well take some of those billions that these VCs keep grabbing during the boom while at the same time being left with whatever innovation comes out of it.
It’s time thus to end the investment prohibitions in the entire economy, and if some grandma KYC-ed charity DAO with an executive board is a step towards it, then whatever. Not least because we’re experts at CTRL + V or Save As.