Growth DAOs Web3 Thesis
Tokenisation will revolutionalise the ownership and value distributions across human organisations.
Scope of our Web3 Thesis
The realm of Web3 is no longer just world wide, it’s transformed into the ‘metaverse’. As the vastness of the internet expands, we wanted to be especially clear on the scope of our thesis. Growth DAO is particularly interested in the potential of blockchain technology for organisations (business) and the wider impact on economics and finance. Therefore we’ve built our ideologies around DAOs (Decentralised Autonomous Organisations), DAO tooling, DeFi (Decentralised Finance), smart-contracts, new infrastructure, protocols and their governance. We’ve discounted the impact of our thesis on the gaming industry, metaverse in general and multi-media NFTs. We want to analyse the impact of the blockchain on pre-existing assets such as equity, cash, art and human capital.
The state of play in Web3
Web2, what a journey it’s been. Since the end of ‘Web1’ at the turn of the century, internet users have shot from 600m to around 4.5bn (BDC consulating) – well over half of the global population. It’s no surprise that the hallmarks of Web3 give power to the people. Many people are comparing the adoption of Web3 today to the adoption of the Web1 internet. If this is the case, we’re about to experience the wave of innovation that hit us in the early 2000s. It’s just this time the boom-bust cycles appear to have hit their half-life. So the next upswing will could be akin to the rise of Facebook, Google, Apple and Amazon and happen in 2-4 years in Web3 . The Web3 movement is predominantly a social revolution of the web, taking power back from globalised companies dictating our usage of an inherently open sourced infrastructure.
Our core theses
Thesis 1: Equity ownership will become tokenised
TLDR; Here are the questions running through our minds.
What does blockchain do? Enable immutable ownership of digital assets.
What is the second biggest asset class? Equities.
What really are equities? Shares in the ownership of public organisations
What is an organisation? A virtual entity that humans have imagined and created
What is the future? Organisations on the blockchain
What’s that called? DAOs (Decentralised Autonomous Organisation – What is a DAO)
Companies are made up legal constructs, incorporated in a system of defined rules. A brand doesn’t physically exist, a company name was made up by a founder. Humans perceive value in these entities based on pre-agreed constructs within nationalised legal systems. In many countries you still have to issue a signed (paper?) share certificate to anyone buying a share in your organisation.
Mental right? Surely this will be replaced by blockchain technologies. It’s more efficient, more reliable, more secure, easily trackable and shareable. Organisations can issue shares (tokens) more easily and seamlessly give them away. No longer will the legal structures be geared towards directors and institutional investors. Employees will benefit from actual ownership, not just ‘options’.
I know what you’re thinking, will the centralised powers relinquish their stranglehold on the regulation? There is a lot of red tape and pitfalls around securities! Perhaps they will adapt once they’re pushed into it or maybe there will be a new system for Web3 built from the ground up.
Thesis 2: A globalised tax and governance system
A new, globalised, crypto-native system will need to be created to handle international disputes, taxation and public goods. Now we have a globalised, decentralised currency (Bitcoin), isn’t it time for the other governamental levers to become globalised? The global taxation system is a mess, global conglomerates are taking advantage of governmentally created tax havens and benefiting from lenient legal systems. The playing field isn’t level….yet.
This may be too big picture, utopian thinking, but platforms are already popping up to tackle similar challenges. Take q.org for example, they’re powering a decentralised legal system and economic structures for networks, baked into code. Also, Jur.io are creating the building blocks to build globalised societies. It might be a few years before serious progress is made and we’re confident that the governmental structures won’t roll over in a hurry. But, they’re so inefficient and bloated with bureaucracy, could they be the next casualty in the blockchain revolution?
At an economic level, we’d love to see traditional stock exchanges be replaced by something akin to a Decentralised Exchange (DEX). New legal, accounting and financing systems need to replace the bureaucratic processes for companies to ‘go public’ on a stock exchange. It’s fairly obvious that the tokenisation of organisations will supersede this antiquated system. It’ll be much, much easier for organisations to sell off shares/tokes – increasing investment, activity and creating an equitable IPO market.
Blockchain native (private equity) investors will underwrite organisations looking to raise capital on-chain. Organisations supporting in this space will no doubt be billion dollar enterprises pretty quickly.
Thesis 3: the future of work will be driven by self-managing organisations
Human organisational theory suggests a new wave of organisational structures to empower and reward the individual. Old organisational paradigms dictate a centralisation of power amongst executives and board members. These owners set the budgets and strategies, based on high-level information. Swathes of middle management are placed to carry out their directives and often left behind in times of change. And we’re in a time of change. According to Frederick La-Roux (Reinventing Organisations), this dominant hierarchical organisational structure has encouraged short-term thinking, corporate greed, overconsumption, and the reckless exploitation of the planet’s resources and ecosystems.
Self-managing organisations are the answer. New processes will enable ‘self-management’ of the community based on collaborative decision making and peer-to-peer reviews. There is mounting evidence that more autonomy increases creative problem solving, improves productivity and reduces wastage, therefore costs. Self-determination theory, developed by psychologists Edward Deci and Richard Ryan, broke new ground in understanding intrinsic motivations. It outlines that people are motivated by the need to grow through independent work. This theory, backed by American Phychological’s research, has been proven over and over in the workplace with new methods for organising and incentivising workers based on granting independence. DAOs will harnesses this fundamental human desire and attract the best talent.
Thesis 4: Emerging nations will lead the transformation
Emerging nations are lining up to be the powerhouses of Web3, with the mobilisation of millions of tech savvy entrepreneurs across India, Africa and Asia taking centre stage. We’re seeing more progressive adoption of crypto currencies from these emerging nations, with El Salvador and the Central African Republic being the first countries to adopt Bitcoin as a national currency. Will the future of cryptocurrencies be a leveler in the international monetary positions of emerging nations?
Conversely, the controlling governments of western nations aren’t keeping up. The US is evening querying the usage of the USD as a peg for many stablecoins. If the FED continues their crack down on crypto companies, it will make it difficult to operate within the US legal system. It’s becoming easier and easier to setup companies across the world, Web3 and Crypto companies will flock to safer shores. Afterall, the Bahamas isn’t a bad place for a head office.
Future Blockchain Developments
To hedge our bets, we want to share some more ideas on the potential flow of innovation. The scope of our thesis is based around the economic impacts of blockchain technology, so we’d be remiss to neglect DeFi (Decentralised Finance). For its many flaws and bad actors, we believe the potential of DeFi has barely scratched the surface. It’s obvious the underlying technology powering the banking industry is antiquated. SWIFT is a billion years old and global exchange and remittance technology is inefficient. Protocols tackling these problems will be very profitable.
Within the DeFi space, we’ve seen the ups and down of stablecoins. The enablement of stablecoins is a huge step forward to get the masses to adopt Web3. Individuals can more reliably ‘earn’ crypto and use it for basic services. It seems obvious to us that centralised stablecoins will eventually run into regulatory issues and at worst collapse like Luna. Dentralised, algorithmic stablecoins adopting the values of blockchain will eventually be the front runners (looking at you DAI), rising the tide for their chains (eg Gnosis and xDAI).
Another related concept we’re bullish on is the decentralisation of insurance (downside protection). Does anyone like insurance companies?… The fat cats blowing our hard earned cash on lavish business expenses. Selling plans based on fear, uncertainty and doubt. Wouldn’t it be nice if this centralised system was put in its place. Blockchain tech offers the perfect solution, we can buy into an insurance like protocol, contributing premiums and collectively voting on payouts (or at least collectively appointing committees to vote). This seems fair, equitable and obvious. This protocol could also be used to protect the downside risk of working as an individual, e.g. covering the likes of parental leave, sickness and disability – all safety nets of traditional employment contracts.
The Growth DAO Manifesto
Following our thinking outlined above. We created a manifesto for Growth DAO. Below is a direct extract from the Growth DAO whitepaper:
Human organisation is shifting. More and more people want to do something meaningful with their lives and work in organisations with autonomy and purpose. We no longer want to be stuck in an office from 9-5 working on what our boss has set us. People are no longer happy to be a cog in the corporate machine. We’re realising our own potential and striking out on our own. We’re becoming freelancers, creators, startup founders and investors. We have the power to work hard, earn what we deserve and be accountable for our success. We’re becoming our own boss, seeking freedom with time, location and work-life balance. We’re finding wholeness in ourselves and giving back to our community.
The purpose of Growth DAO is to create a Decentralised Autonomous Organisation (DAO) to unite a global community of entrepreneurial leaders, startup enthusiasts and hands-on investors. A collective passionate about building the future, by contributing either their superpower skills or by contributing their resources. An investor in Singapore will trust a founder from Estonia to build a startup by using developers in India and growth marketing experts from the UK and America. We believe that entrepreneurship empowers individuals to create wealth for themselves, their families and their community, regardless of borders or circumstance.
We’ve been presented with an opportunity – blockchain technology is empowering a global workforce to unite us as a collective of independent individuals with a common purpose. Remote teams can simply form, with commercial contracts automatically created and recorded. Reputation can be earned and leveraged to increase wealth. Collective investments into startups can be easily convened and tracked, the rewards being distributed fairly to those who contributed. Within 10 years, technology advancements and human organisation forces will converge and unleash a world of innovation. This is the vision of Growth DAO and we will build a portfolio of organisations with a combined market cap of $10bn. Our mission is to build startups to be proud of and to create prosperity and security for members at a global scale.
Please go and read the Growth DAO whitepaper for a detailed explanation of our thoughts and thesis.
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