People are happier when their work has meaning and when they can associate with peers who share similar beliefs and values. But in the face of new challenges stemming from the pandemic — everything from the shift to remote work to closures of schools and daycare centers — many people began to question the validity of their career as their identity.
The Internet has provided us with many ways to discover and join likeminded communities that we can interact with. Take Reddit for example—there over one million subreddits that exist today with almost 48 million monthly active users (Statista). You can find a niche community to join for almost any topic — and if you don’t find one you can create one yourself.
The web3 world takes this concept a bit further by adding economic incentives for community members to contribute. One of the earliest dreams for Ethereum was to enable “Decentralized Autonomous Organizations” (DAOs).
Because Ethereum enables anyone to write arbitrary rules in code, we can use those rules to design organizational or governance systems that allow groups of people to jointly make decisions through voting or other mechanisms.
While DAOs have existed on Ethereum since 2016, these early experiments were more science project-like rather than real product.
But the DAO ecosystem had a breakout moment in 2021. A simple but workable tech stack came together to enable existing DAOs to get things done, and new entrants pushed the boundaries of what a DAO can be and who can be a part of one.
I personally regained interest in DAOs in 2021 as I saw many opportunities to use self-sovereign identity (SSI) frameworks and principles towards unlocking further growth for decentralized systems.
Stepan Gershuni and I started talking about the intersection of SSI and DAOs in Episode #9 — Economics of Self-Sovereign Identity and the Future of Cryptoeconomics — and once again in Episode #16 — How DAOs Benefit from Self-Sovereign Identity.
As 2021 was coming to a close, the number of unique monthly voters who participated in DAOs exploded. Today, there are hundreds of DAOs that see daily activity from members, pay members, build products, and vote on the use of shared funds. Collectively DAOs on Ethereum govern assets worth more than $16 billion.
One of the new DAOs that recently has caught my attention is the Ethereum Name Service (ENS). In a nutshell, ENS is a name and lookup service built on the Ethereum blockchain that allows crypto users to translate their machine-readable addresses to human-readable addresses. Think of it as an identifier for public Ethereum addresses, aiming to make crypto more accessible. So rather than sending someone tokens by using their public key (e.g., 0x400668a22A85aac272608004130fp26E8e853eBD), I can use their nickname.eth address.
And if you use Twitter at all, you’ll probably also notice the trend where people in are placing their ‘.eth’ in their names. Again, to show allegiance/association to a community of people who share some similar values and beliefs.
The Ethereum Name Service (ENS) has seen breakout growth, growing to hundreds of thousands of users, hundreds of integrations, and a new DAO community treasury ($1.9B) to fund continued development of the ecosystem.
I started questioning how .eth identifiers compared to decentralized identifiers (DIDs) — DIDs being the most critical element in achieving digital self-sovereignty (for those unfamiliar with SSI).
Although .eth names can enhance user experiences for crypto users, it doesn’t add any privacy benefits that DIDs do. If you broadcast your .eth address like Shaq did, then the whole world can view your financial transactions. That’s simply the open and transparent nature of permissionless public blockchains like Ethereum.
There seems to be use cases for both types of identifiers (.eth names and DIDs) and they aren’t mutually exclusive from each other. However, I feel that at times the web3 space tries to apply blockchain to their use cases without understanding the core properties needed for their use case. For example using .eth names or NFTs as identifiers.
These are important conversation to keep having and I think the one here with Stepan starts to explain how different types of identifiers can not only co-exist, but reap value from each other.
The existing self-sovereign identity (SSI) frameworks are mature, more privacy-preserving and don’t force any specific technologies. For one, it they live on a specific blockchain. SSI gives people the properties of verifiability, control, portability, privacy and a slew of other ones that are important to achieve digital sovereignty.
I continue to strongly believe that the intersection of SSI and web3 will be extremely powerful and change the future of work.
DAOs will offer more interesting opportunities to workers to contribute towards meaningful work. And SSI will allow workers to build up a verifiable portfolio of knowledge and skillsets, which can be used to participate in more and more opportunities through DAOs.
There remains work to be done to bring SSI frameworks to the web3 space. There are some early stage projects like Deep Skills attempting to do so. But as these become more mature and unlock supplies of verifiable data, people will have so much freedom and flexibility to work on passion projects.
To conclude this post, I want to share 5 ideas that this latest podcast conversation with Stepan has me thinking about:
- Idea 1 — People are happier when their work has meaning and can associate with peers who share similar beliefs and values. DAOs provide opportunities to pick and choose your work communities. DAOs are open and transparent, making it easy to do your due diligence before joining one. It’s tough to truly know a corporation runs until you join it.
- Idea 2— DAOs aren’t bound to geographical constraints or corporate policies. You can work on a DAO from anywhere in the world. You can also work on many DAOs from anywhere.
- Idea 3— Contributing 5 hours per week of meaningful work will likely create more value than contributing 40 hours of non-meaningful work (e.g., one of the most meaningful contributors to Wikipedia does it as a side gig (here))
- Idea 4— DAOs can scale much quicker than corporations. There exists a lot of administrative overhead to onboard new talent to a corporation (e.g., register employee with government, set up payroll, etc.) — that overhead doesn’t exist in DAOs.
- Idea 5— There is an oversupply of talent looking to join DAOs. There is an undersupply of talent available for almost every type of corporation. Corporations don’t have enough of a pipeline of talent, while DAOs are trying to figure out how to onboard the large available talent pools effectively.