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For decades, individuals have collaborated and ensured trust between parties by creating companies and signing legal contracts. While this system has been successful, it has shown its limits, favoring security over flexibility and centralized guidance over individual initiative in a period when employees are reinventing themselves and looking for new opportunities at work.

As power shifts from organizations to people, we need new solutions that enable individuals to be flexible, while having the right tools to easily collaborate and create trust with each other.

Social tokens are a complete paradigm shift in the way people collaborate, and DAOs are leveraging them to give power back to individuals worldwide. The next generation of workers might start their professional career in a DAO, starting by simply vibing into these tokenized communities, helping to grow the projects they love, getting paid for having fun, and ending up never working for traditional companies.

As our society is changing, Social Tokens seem to be the right path to reach this future of work and seem to be a growing primitive for enabling collective effort.

1 - What problems do companies have?

Collaboration has always been key in innovation. It is well known: “if you want to go fast, go alone, but if you want to go far, go together.” There have, however, always been major challenges in collaborating because there is only so much you can trust someone you don't know.

Overcoming the barrier to trust is one of the reasons people started to create companies. It was easier to collaborate with someone in the long term by hiring them and signing proper contracts, ensuring this person wouldn't reveal the company's secrets. It was also easier to raise and allocate capital when the company limited risk and liability to shareholders.

Over time, the model of signing working contracts with traditional companies has shown its limits. Deciding to work for a company in the long term means saying no to hundreds of other exciting projects, losing flexibility, and limiting incentivizes for salaried workers to do their best work.

The current model of traditional big tech companies prevents employees from making decisions over future strategic plans, lacks employee ownership, and incentivizes companies to stay in a closed environment, not encouraging partnership with others.

Today, we're seeing the unbundling of traditional employment where the individual is now the atomic unit. Individuals worldwide crave more flexibility, autonomy, and companies still struggle to evolve quickly enough to keep up with those changes.

We're leaning toward a more fluid way of working, where individuals will follow their interests, collaborate on multiple projects simultaneously, and not have the constraints of working at a single company. At the same time, these individuals often need to collaborate with others to achieve their goals and don't want to work independently for the rest of their lives.

To deal with these problems, we need new solutions that enable individuals to be flexible while having the right tools to collaborate and create trust with each other. Social Tokens might be the key to the future of work.

2 - How do Social tokens and DAOs solve these problems?

2.1 - Social tokens as a way to create trust

Social Tokens create trust. I don't think they will completely replace what we use today to create trust at work, such as legal contracts or fiat payments, but they are a way to start projects more quickly than with traditional legal status.

One way to create trust through tokens and crypto mechanisms is to create a multi-signature wallet (multi-sig). A multi-sig is a crypto wallet that allows you to manage your community crypto assets (tokens), with the option to require a predefined number of signatures to confirm transactions. As it is necessary to have multiple team members to execute every transaction, it prevents unauthorized access to the funds in this wallet. No one can leave with all the money as it would require the authorization of the majority of other members.

Social Tokens also create trust when splitting the benefits through smart contracts. A smart contract is code that only accepts the transaction when all the conditions have been met. Instead of having to trust that someone will share the benefits with you, we could imagine a smart contract that would say, "if the item we've collectively created has been sold, then the benefits of the sale will be shared equally between the following crypto addresses." As the smart contract is deployed on the blockchain, it is impossible to make changes to it, ensuring trust between parties from the beginning.

Some projects have successfully leveraged the power of social tokens to create trust. For example, The Modern Billboard Collective is a project between three startups that aims to create a tokenized equivalent of the Million Dollar Homepage, a web page consisting of a million pixels arranged in a 1000x1000 pixel grid where anyone could buy a pixel for $1 and place an ad, making the entire page worth $1 million. The collective aims to take this idea and using tokens allows brands to advertise without using an intermediary on their respective websites by selling part of their homepage's pixels. In pursuing leveraging crypto-mechanisms for the whole project, they created trust between the three founding startups. Indeed, by letting anyone buy a digital "lot" on one of the three websites "on-chain," it is easy for each company involved in this collective to trust each other, as the royalties will be shared fairly and automatically between all parties. Without this technology, the three startups would have needed legal contracts, costing money and time, and required royalties to be shared manually, again costing time and creating an inefficient process. Social tokens enable trust, flexibility, and speed.

2.2 - Social Tokens as a better way to align incentives

The whole concept of creating a Social Token is to build a virtual economy where early believers can share the upsides. It's a complete paradigm shift in the way people collaborate.

Basically, the end-goal of DAOs is often to reward contributors helping the community grow by giving them shares (Social Tokens) of the community and creating such an ambitious and robust community that people are keen to buy the token to have access to the special accesses, perks, and voting power in this community. Early supporters can then sell their Social Tokens to those newcomers and get compensated for the work they've put in at the beginning. Instead of simply getting paid with an existing cryptocurrency (similar to a salary), contributors are incentivized to help the DAO succeed, as the value of their tokens is directly correlated to the project's success, and can gain an almost infinite value.

In a sense, we could compare Social Tokens with equities. In the beginning, they hold no value, but people truly believing in the project will be keen to work in exchange for those equities, hoping that it will be worth much more later. This system allows community leaders to fairly reward anyone contributing. With aligned incentives, collective effort is much easier to foster.

2.3 - Social Tokens give ownership over future key decisions

Social tokens also come with voting power. Contributors can use their tokens daily to vote on proposals and have ownership over future strategic decisions within the DAO. Efficient tools have been created to facilitate the voting process.

One of these tools is Snapshot, which allows anyone to vote on-chain for proposals with their token, making it easy for individuals worldwide to vote on important decisions. The fundamental difference between DAOs and traditional companies is that these individuals team up around joint missions and values that vote for strategic decisions.

In theory, the more tokens someone has, the more voting power they have. This "token" voting system allows a genuinely flat culture and removes all hierarchy. Everyone can vote on future decisions in a truly equal way.

In reality, the voting system through tokens is still not perfect and there is still a lot of inequality in terms of voting power. The core contributors being paid in tokens each month and the early believers in the project that might have received an Airdrop at the beginning are often considered whales, and usually have much more voting power than the average member of the DAO. There are still problems with token voting, but people are hard at work trying to solve them.

To solve this problem, lots of people are working on new solutions. New tools should soon implement an option to allow quadratic voting, a system that gives the same weight to each voter, no matter the number of tokens they hold.

DAOs are like employee-owned cooperatives, and everyone involved in this ecosystem tries to make them as fair and decentralized as possible. Social tokens are like stocks with voting rights. They are not perfect yet, but in traditional companies, employees often receive stock options that do not grant voting power, and no one in the traditional corporate environment is trying to change this.

2.4 - Social Tokens tools to give power back to the people

More than the token in itself, it's the ecosystem and all the tools around it that are valuable. Indeed, new solutions are created every day to power this revolution and to make life easier for those Web3 communities and individuals wanting to start a new project.

Coinvise is one of the most thriving Web3 platforms today that has created a complete set of tools to help DAO leaders create and manage their Token. Their Airdrop tool, for example, allows DAO leaders to send tokens in bulk to Ethereum addresses, making it easy to reward contributors for their work, bringing awareness to a project by sending tokens to people in the leader's network, or sending tokens to grant access to token-gated content. Coinvise also creates quests at scale, creates a vesting schedule to disincentivize speculation, and bridges tokens to a Layer 2 to avoid gas fees in minutes. This set of tools allows anyone to create a tokenized community and easily take actions at scale and in a trustless way.

2.5 - Social tokens foster culture and retain contributors

Traditional companies have, for a long time, tried to create a strong culture and foster belonging, but the primary purpose of a company is to make a profit. Culture is often a secondary layer serving to make a profit and acquire new market shares.

On the other end, DAOs are virtual communities where people with shared values decide to join forces to hang out and achieve their goals. It's not about work. It's first and foremost about culture, about vibing together and creating with others, building what you've always wished to create. In DAOs, culture comes first, products and projects come second. Not the other way around.

To build a robust culture, DAO leaders can set up tools to boost members sense of confidence or to encourage gestures of kindness and support, two critical elements of a great culture. In many DAOs, this can be achieved by sending tips to other contributors as a display of appreciation, recognition, and connection. By focusing on culture first, DAOs can overcome the barrier of trust that traditional companies struggle with.

Effective DAO leaders put a lot of attention and effort into creating a strong culture. Culture is not an add-on, it's a core feature. It is what bonds people together and creates trust on a different layer than crypto mechanisms.

Closing thoughts

Of course, Social Tokens haven't solved all of the traditional companies problems. They are not perfect, and the perfect solution may never exist.

DAOs seek to solve many of the most pressing problems that traditional companies face today thanks to cryptographic mechanisms and Social Tokens. By leveraging new technologies, they give freedom and power back to the person, and give back assets that individuals seek today and that traditional companies took away a long time ago.

Incentives will never be fully aligned in Web2 companies. The more companies pay their employees, the less profit they will make. With this outdated model, employees will never work as hard as they can as they know the hard work they are putting into the company will never be fully rewarded.

On the other hand, we're seeing tokenized communities thriving today and leveraging all the advantages of social tokens to create projects that would have been impossible without them. Constitution DAO is a perfect example. This tokenized community was created to buy one of the original copies of the United States Constitution at an auction held by the high-end auction house Sotheby's, which ended up raising $40M in seven days. They convinced thousands of people worldwide to send them funds, leveraging smart contracts to create trust between parties.

We still have a long way to go to see these DAOs be completely efficient and genuinely decentralized. Most tools being created today won't be around in a few years, but that's the normal cycle of true innovation. We are experimenting at lighting speed.

I'm convinced we'll see more ambitious people build DAOs instead of companies because of all the advantages this new collaboration model allows. We'll also see more DAO-to-DAO collaboration, as DAOs need to capitalize on their strengths and can't do it by relying on products and tools made for Web2 companies.

DAOs are the new startups. We're still very early, and this new way of collaborating is messy, chaotic, and unproven. But by joining a DAO, you will learn quickly, have unparalleled upside, and discover more freedom and flexibility than ever.

Get rid of Web2 companies. Come work for a DAO.

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