Trends #0054 — Decentralized Autonomous Organizations (DAOs)

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Why It Matters 

Networks, marketplaces and nations will become less corrupt, more equitable and more transparent.

🔍 Problem

Network effects lead to natural monopolies. Centralization breeds censorship, corruption and rent-seeking behavior.

💡 Solution

Decentralized Autonomous Organizations (DAOs) are groups with no central management. Individuals coordinate around a shared set of rules to achieve a common goal.

Well-known DAOs include Bitcoin and Ethereum. These are transparent, unstoppable, user-owned networks

🏁 Players



  • Aragon • Create and manage DAOs
  • Roll • Create and manage social tokens
  • Rally • Create and manage creator coins

🔮 Predictions

  • User-owned networks will become the norm. Facebook’s public shares have 1/10th the voting power of private shares. DAO ownership will apply to equity and governance. 
  • Politicians will gut the old system from the inside out. They are stakeholders in the new system and incentivized by lobbyists. The mayor of Miami is a canary in the gold mine. Followed by members of congress. And Biden’s second-largest donor. We’re witnessing a bloodless war. Politicians are handing over power.
  • Negative externalities will go unchecked. Governments can enforce carbon credits on factories. How do you stop a decentralized network from mining Bitcoin?

☁️ Opportunities

🔑 Key Lessons

😠 Haters

“Didn’t The DAO get hacked?”
Yes. And we’re better for it. See antifragility

“Decentralization slows things down.”
Some DAOs seek progressive decentralization. Representative models may help. 

“These don’t sound very autonomous.”
Autonomous is a misnomer. A better term may be DCOs (Decentralized Continuous Organizations) or DUOs (Decentralized Unstoppable Organizations).

Whales will run DAOs.”
They run existing networks. Covertly with high switching costs. DAOs check power with transparency and forkability. 

“What about the Oracle Problem?”
Be more specific. Time is an oracle. Decentralized networks are oracles. What are you solving for? Most DAOs are not fully autonomous which removes the need for end-to-end oracles. 

“What about private blockchains?”
They’re called computer databases. Centralized and censorable. They’ve been around since the 60s. 😉

🔗 Links

  1. Why Decentralized Matters • Private networks tend to bait-and-switch. They’re generous until they reach liquidity.
  2. Trends #0050 — NFTs • See how DAOs, like $WHALE and Flamingo, pool capital to buy NFTs.
  3. Trends #0039 — DeFi • A look at the fast-growing world of decentralized finance.

Thanks to Linda Xie (Scalar Capital), Jess Sloss (Seed Club), Patrick RiveraStuart Sim (FinLister) and Shawn Cheng (ConsenSys). We had a great time jamming on this report. 

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What you’ll get:

  • 23 DAOs (187% More)
  • 7 Tools (133% More)
  • 7 Predictions (133% More)
  • 6 Opportunities (100% More)
  • 9 Key Lessons (125% More)
  • 11 Links (266% More)

With Trends Pro you’ll learn:

  • (📈 Pro) Which DAO reached a $1B market cap in one week?
  • (📈 Pro) Who made $350,000 from a DAO-owned casino?
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  • (📈 Pro) How to launch a DAO?
  • (📈 Pro) Why is community a competitive advantage for DAOs?
  • (📈 Pro) What are vampire attacks? Why should we get used to them? 
  • (📈 Pro) Why are tamper-resistant oracles important?
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  • and a lot more…