WHY THIS MATTERS IN BRIEF
When looking at the future of work most people look at the “work” not at the company structures we work for but that’s where the real innovation is coming from.
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Every technological revolution has transformed the way we work and so it’s going to be true of Web 3.0 which by now you might have heard about – the next generation of the internet. The plow turned hunter-gatherers into farmers. The spinning jenny and the power loom turned farmers into factory workers. Industrial automation and computers turned factory workers into office dwellers, and then the internet fundamentally changed the way we got work done. And now we’re staring down the barrel of what’s next.
Web3 represents the next iteration of the World Wide Web. It’s built upon blockchain technology and cryptocurrencies, and is characterized by greater decentralization, transparency, and shared ownership. As venture capital firm Andreesen Horowitz’s general partner Chris Dixon tweeted, Web1 was Read-Only or directories, Web2 was Read-Write AKA social media, and Web3 is Read-Write-Own, and this new addition “own” that will let people work, and earn, in new ways.
The Future of Work 2030, by Keynote Speaker Matthew Griffin
While Web3 looks set to transform work as we know one of the most impactful types of future companies looks set to be Decentralized Autonomous Organizations, or DAO.
DAOs are effectively owned and governed by people, who generally don’t know one another, who hold a sufficient number of a DAO’s native token, which functions like a type of cryptocurrency.
For example, $FWB is the native token of popular social DAO called Friends With Benefits, and people can buy, earn, or trade it. Today, there are many different permutations of DAOs as depicted in this image from crypto investor and DAO thought leader Cooper Turley, with some being more decentralized than others. DAOs run the gamut from media organizations, to venture funds and grant programs, to social networks, video games, financial and tech platforms, and philanthropic efforts.
So how exactly could DAOs change the way we work?
As DAOs proliferate, instead of having one employer and a 40-hour workweek, we might contribute several hours a week to several DAOs. This is already typical amongst early adopters to the space as well as in younger generations 36% of whom now have multiple jobs not just one like their parents used to. Today’s creator economy, populated by vloggers, bloggers, and podcasters, can give us a glimpse into what the Web3 working world might look like, with the typical creator earning income from a variety of projects such as coaching, consulting, and content monetization on various platforms such as YouTube, SubStack, and Patreon.
The technology-centric nature of DAOs may also result in rudimentary, algorithmic work being automated, freeing contributors up to be the most creative and useful versions of themselves and allowing them to spend more time on high-value activities — the type that stimulate the flow state — and less time on monotonous, shallow tasks.
While 85% of today’s global workforce is disengaged at work, DAOs could also give people more freedom to choose projects whose mission and vision truly resonate with them, jobs that align with their strengths, and values-aligned people to work with. This could also help to mitigate the work-life conflicts, excessive workloads, lack of autonomy, and office politics that drive workplace stress.
Furthermore, when it comes to decision making, contributors will be able to use their DAO’s native tokens to vote on key decisions. You can get a glimpse into the kinds of decisions DAO members are already voting on at Snapshot, which is essentially a decentralized voting system. Having said this, existing voting mechanisms have been criticized by the likes of Vitalik Buterin, founder of Ethereum, the open-source blockchain that acts as a foundational layer for the majority of Web3 applications. So, this type of voting is likely to evolve over time.
While DAOs are likely to have a set of core contributors (at least in the early stages) who might be engaged on a full-time basis and even earn salaries, most people contributing to DAOs will instead complete individual tasks, or “bounties,” such as “build a messaging app” or “moderate an online community forum.” Contributors can Work-to-Earn (W2E), and generate either native tokens or fiat currency denominated in USDC, a digital currency pegged to the US dollar, or both.
For example, one of my friends recently contributed an article to the investment DAO Global Coin Research and earned 30 of its native $GCR tokens. These tokens can be traded on exchanges such as UniSwap for other tokens or fiat currencies, and represent ownership in a DAO — which is limited by the number of tokens in its token pool, not dissimilar to the total number of shares a corporation is limited by.
Token holders could then use platforms such as Yearn to “stake” their tokens. Staking effectively amounts to depositing tokens into a central liquidity pool where they’re used to validate blockchain transactions. Stakers earn an APY (Annual Percentage Yield), which effectively amounts to interest, which in some cases can exceed 20%.
In the developing world and gaming world, the Play-to-Earn (P2E) model thatI’ve spoken about before which is a variation of W2E, is already bearing fruit for an army of teenagers. For example, Axie Infinity is a token-based video game where gamers collect, breed, raise, battle, and trade creatures known as Axies. The game’s native token, AXS, has a market cap of $4.3 billion at the time of writing. But unlike traditional video games, where players don’t actually own their characters or peripheral assets such as swords, players own their Axies as Non-Fungible Tokens, NFT’s, and can sell them on the game’s marketplace. The average Axie gamer — typically a teenager from the Philippines — earns about $10 to $20 per day playing the game, on par with the country’s average salary, while the price of Axies can appreciate over time with some fetching a price of 300 ETH or about $1 million at time of writing. Axie Infinity generated U.S. $1.3 billion revenues in 2021, attributable to Axie marketplace transaction fees and Axie breeding fees.
Yet another permutation of this model is Learn-to-Earn (L2E). An example is the platform RabbitHole, which pays you to learn about Web3 applications. And other permutations include Create-to-Earn (C2E) — such as writing articles or designing artwork in exchange for tokens, and Use-to-Earn (U2E), such as posting comments and engaging with Web3 social media applications such as Minds.
In addition to all of this, token holders can also speculate on their tokens, the price of which might increase in value over time based on supply and demand, much like traditional shares in a company.
As many traditional managers with apparent trust issues continue to hide behind the cloak of “team bonding” while sending everyone back to the office in the wake of the pandemic, DAOs not only don’t care where you work, they also don’t care when you work or what you look like while you’re working — in fact, many contributors are recognized only by their NFT profile pics. Netflix co-founder Marc Randolph said on the Future Squared podcast that “in a place where you’re evaluated solely on the quality of your work, no one really cares about your appearance.”
Instead of working from a central office all year long and having two to four weeks off, most DAO contributors will likely work remotely, bond in virtual social spaces such as CryptoVoxels or The Sandbox, and for several days or weeks a year, get together in real life for inspiring conferences and retreats.
Traditional organizations that demand that their employees go into the office for two to three days a week effectively anchor their employees to life in one place — usually close to a central business district. Firms with such archaic and mobility-limiting positions will likely find it increasingly difficult to win the battle for Millennials and, in particular, Gen-Z talent.
Some might argue that DAOs, like many gig economy companies, threaten labor rights, but DAOs themselves are looking to address this. For example Opolis, a digital employment cooperative, helps DAO contributors and contractors get their health insurance and 401K retirement plans in order.
The DAO movement is still obviously in its infancy, and has a number of its own challenges to work out when it comes to governance and trust. The mainstream adoption of Web3 rests upon the resolution of questions related to user experience (UX), security, scalability, and regulatory clarity. However, at the current pace of talent acquisition, capital-raising, and innovation in the space, mainstream proliferation could happen sooner rather than later.
At its core, Web3 at the moment seems to promise more fulfilling and outcomes-focused work, with a fairer distribution of ownership and rewards so this will be a space I’ll be watching closely in the years to come.