The Disrupt Weekend

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“Nine years ago, Buterin dreamed up Ethereum as a way to leverage the blockchain technology underlying Bitcoin for all sorts of uses beyond currency. Since then, it has emerged as the bedrock layer of what advocates say will be a new, open-source, decentralized internet. Ether, the platform’s native currency, has become the second biggest cryptocurrency behind Bitcoin, powering a trillion-dollar ecosystem that rivals Visa in terms of the money it moves. Ethereum has brought thousands of unbanked people around the world into financial systems, allowed capital to flow unencumbered across borders, and provided the infrastructure for entrepreneurs to build all sorts of new products, from payment systems to prediction markets, digital swap meets to medical-research hubs.

But even as crypto has soared in value and volume, Buterin has watched the world he created evolve with a mixture of pride and dread.

Crypto itself has a lot of dystopian potential if implemented wrong.

Buterin worries about the dangers to overeager investors, the soaring transaction fees, and the shameless displays of wealth that have come to dominate public perception of crypto.The peril is you have these $3 million monkeys and it becomes a different kind of gambling,’ he says, referring to the Bored Ape Yacht Club, an überpopular NFT collection of garish primate cartoons that has become a digital-age status symbol for millionaires including Jimmy Fallon and Paris Hilton, and which have traded for more than $1 million a pop. ‘There definitely are lots of people that are just buying yachts and Lambos.’

Buterin hopes Ethereum will become the launchpad for all sorts of sociopolitical experimentation: fairer voting systems, urban planning, universal basic income, public-works projects. Above all, he wants the platform to be a counterweight to authoritarian governments and to upend Silicon Valley’s stranglehold over our digital lives. But he acknowledges that his vision for the transformative power of Ethereum is at risk of being overtaken by greed.

If we don’t exercise our voice, the only things that get built are the things that are immediately profitable. And those are often far from what’s actually the best for the world.

I would love to have an ecosystem that has lots of good crazy and bad crazy. Bad crazy is when there’s just huge amounts of money being drained and all it’s doing is subsidizing the hacker industry. Good crazy is when there’s tech work and research and development and public goods coming out of the other end. So there’s this battle. And we have to be intentional, and make sure more of the right things happen.”

“In crypto quarters, DAOs have been called the “most important innovation” and the “future of work”. DAOs, at their essence, enable people on a mass scale to coordinate, invest and work with economic certainty, thanks to the immutable and open-source nature of blockchains.

Today I want to position DAOs within the historical development of the modern capitalist firm to better appreciate what these new social organizations are capable of on a logistical and economic scale.

The weakness of the traditional U-shaped firm stemmed from its concentration of decision-making power in the hands of a few top men, making it too slow and cumbersome to adapt as the firm grew. Managing the firm in one’s home market may have been easy, but proved too difficult in different regions due to different market conditions, supply chains, cultural phenomena, and more.

Over time, this led the U-shaped firm to spontaneously innovate and decentralize into the multidivisional M-shaped structure. This saw corporations entrusting decision-making into lower-level divisions that oversaw different products or geographical areas of the business.

Enabled by blockchains, DAOs are the next iteration in the continued decentralization of the modern capitalist firm.

What sets DAOs apart from all previous organizational forms is their flat, decentralized structures and absence of central planning. DAOs share a treasury and raise equity capital through the issuance of their own token, attracting anonymous investors and workers who believe in its mission.

The decentralized ownership of DAOs lets anyone holding its native token exercise an active vote. Even if not all members vote, the fact that organizational decisions can be publicly accessible and scrutinized by more active members is a dramatic improvement from traditional corporations where decisions are shrouded in secrecy.

The economic marvel of DAOs lies in how it so superbly aligns the incentives between work and reward. Rock pioneered the private limited partnership model that compensated upper management and junior employees with stock options, later becoming synonymous with Silicon Valley’s equity culture. With Fairchild, Rock ensured that key scientists and engineers who were integral to the success of the firm received stock options. This model of “liberation capital” introduced high-powered incentives for workers and unlocked human talent.

DAOs extend this economic logic to every worker. Like gig economy workers, most DAOs offer a flexible “pay for work” model. Unlike gig economy workers, however, DAO workers are paid in native tokens (equity). DAOs, therefore, empower workers with the best of both worlds: flexibility and stakeholdership. This gives them an even further vested interest in seeing the DAO organization grow.

DAOs are still in their nascent stage, but the technological innovation of blockchains upon which it sits promises to solve coordination problems on an unprecedented scale.”

“On Monday, some people (like me) were struck by a brief note published by Zoltan Pozsar, Credit Suisse’s short-term interest rate strategist, about a new world monetary order. Pozsar sees the ‘birth of Bretton Woods III – a new world (monetary) order centered around commodity-based currencies in the East that will likely weaken the eurodollar system and also contribute to inflationary forces in the West.’

Russia is one of the world’s largest commodities exporters, and because of the sanctions, Russian commodities are less desirable than commodities from other countries. The People’s Bank of China, which has massive amounts of now seizable, U.S.-based inside money, could defensively sell Treasurys to fund the purchase of “subprime” Russian commodities. In addition to giving China control over inflation, such action could lead to commodity shortages and a recession in the West.

This shouldn’t be taken lightly. Although Russia has sold U.S. dollar assets for gold the past few years, the foundation of Bretton Woods II has splintered.

Tack on Russia’s partial banning from SWIFT and we could be looking at the beginning of a new monetary regime, a “Bretton Woods III.” Now, we are facing a world where there may be a sharper focus on outside money, like gold and other commodities as countries boost their reserves. Or they may turn to bitcoin (BTC).

Connecting Consumer Goods to NFTs

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