At the beginning of this month, AssangeDAO, a project aimed at “rescuing Assange,” raised over 17,000 ETH (about $52 million at that time) in just a few days and immediately became a popular project in the crypto market.
A Look Back At The Small Climax of DAO Development from the AssangeDAO Event
First, let’s take a brief look at the background of this event. Julian Assange, the founder of WikiLeaks, was wanted for leaking a series of scandals from the U.S. government. He then took political asylum in the Ecuadorian government for nearly 7 years. Still, in 2019 he was expelled by the Ecuadorian government and put in a London prison, where the U.S. government has been trying to extradite him to the United States for trial. Finally, on December 10, 2021, the British High Court rendered a judgment allowing extradition, which put Assange in prison in the United States for up to 175 years.
AssangeDAO was established on the same day last December when the British High Court announced its decision to allow extradition from the United States. Until February 4 this year, the organization officially launched a fundraising campaign to raise funds for Assange’s joint NFT with artist Pak and use the proceeds from the sale of NFTs to provide legal defense, publicizing the protest, and others for Assange. In less than a week, AssangeDAO raised nearly 20,000 ETHs, surpassing the 11,613 ETHs raised by ConstitutionDAO (People), making it the largest fundraising operation to date.
In fact, since the second half of last year, DAO has been gaining attention in the crypto market. In addition to ConstitutionDAO and AssangeDAO mentioned above, FreeRossDAO and Aragon are also well known. The total market cap of DAO projects also reached hundreds of millions of dollars at the peak. For general investors, the quickest and most common way to participate in DAO is to buy low and sell high in the secondary market, so choosing a platform with the fastest traffic for all kinds of DAO becomes the key to grasping investment opportunities. In this regard, MEXC Global has obtained obvious first-mover advantages under its advanced layout and in-depth research on DAOs. For example, last year, MEXC was the first to list and trade PEOPLE, which is the governance token of the very popular ConstitutionDAO that recorded a tremendous gain of 464% on opening day, and launched the trading pairs of the ETF products PEOPLE3L/PEOPLE3S.
Why do we need DAOs?
A DAO refers to a Decentralized Autonomous Organization. It still seems difficult to give a clear definition to this term. On the surface, a DAO is a new form of social organization. On a deeper level, it is also a change in production relations. In Ori Brafman’s book The Starfish and the Spider, the American writer first proposed the concept of decentralized autonomous organizations. In his book, he compared centralized organizations to a spider and decentralized organizations to a starfish, explaining the difference in detail. In his book, he writes that a spider is centralized and cannot survive if their heads are cut off while starfish are made up of a stack of cells that are equal to each other, and each tentacle that is torn off by a starfish can grow into another complete starfish.
These spiders and starfishes represent two different forms of organization in human society. In the long history of human society, centralized organizations undoubtedly occupy an absolute dominant position. The emergence of DAO gives us a new direction. Compared to traditional centralized governance organizations, DAOs have two distinct advantages: organization autonomy and decentralization. Specifically, in the world of DAO, any rule is automatically executed based on an established decentralized system and is not transferred by the will of any individual member. In the case of decisions involving the interests of most users, the decision needs to be made jointly by all members through DAO voting and executed automatically according to the established results. This autonomy has never been achieved by any centralized organization before.
As for the nature of decentralization, it is easier for us to understand that the initiation, evolution, and decision-making of any DAO are based on a decentralized ecosystem and not subject to regulatory restrictions nor operate collectively around certain core interests. A DAO should conform to the basic principles of openness, transparency, and fairness of its establishment. This advantage of avoiding censorship is objectively conducive to the maximization of resource utilization. Take the modern company system we are familiar with, for example, in the traditional hierarchical management, communication between management and grass-roots employees is unavoidably hampered by various obstacles, which makes it difficult for management to understand the real ideas and practical difficulties of grass-roots employees, which adds more costs to the final decision-making and may even lead to decision-making errors. In decentralized autonomous companies, everyone can put forward their own questions and opinions on the blockchain at any time and be seen by others, reduce unnecessary intermediate procedures, and truly achieve flat management, thereby improving the enthusiasm and creativity of employees and promoting innovation and development of the company.
Problems and Solutions to DAO at the Present Stage
Of course, what we have discussed above about the autonomy and decentralization offered by DAO is based on the results of an ideal state. On the other hand, at the current stage, it is important to recognize that there are still many problems hindering the development of DAOs. The most prominent point is that the current organizational form of DAO has no legal basis, and the rights and obligations of DAO are not fully supervised. This is also mentioned on AssangeDAO’s website (assangedao.org).
So there are concerns about the rights and interests of many fundraising participants after we mentioned at the beginning that AsangeDAO did not release the governing license as agreed and temporarily opened the second round of fundraising.
On the other hand, DAOs still have a lot of room to improve organizational efficiency, especially in some important complex matters, and the excessive cost of trust and communication and collaboration makes DAO more vulnerable. Take AssangeDAO as an example. Although it was established in December last year, the initial fundraising was two months later. Moreover, as the large number of speculators among the fundraising crowd, this seemingly powerful decentralized fundraising operation faces a serious internal crisis.
So does this mean that DAOs can only handle simple organizational matters, not more complex ones? This conclusion is obviously inappropriate now. Why?
We might as well look for some insights from the development of DeFi. As we all know, DeFi’s origin can be traced back to 2017. The crypto market truly appreciates DeFi’s greatness 3 years later, in 2020. DeFi’s TVL has grown rather slowly over the past 3 years, but that doesn’t mean that DeFi’s growth is stagnant. In fact, over the past 3 years, DeFi Summer erupted as many entrepreneurs steadily built infrastructure and educated market users. Like DeFi, DAO is currently facing issues such as weak infrastructure, inadequate understanding of the importance of DAO by community members, inadequate rules and mechanisms of DAO itself. It is not possible to solve the above problems overnight, and it will also take several years to continuously strengthen infrastructure construction and strengthen user education. And then, from the change of organizational form, it can leap into production relations.