Web 3.0 may or may not be real. It could be, like interactive TV in the 1990s, a highly funded bad idea. Or it might be, like the Beatles Get Back sessions, the place where the next thing is made and built one step at a time.
Web 3.0 describes a lot of different things and at the core is the idea of software replacing people and institutions as the essential glue between us all. An extreme example of that is a Distributed Autonomous Organization (a DAO). The promise is that a DAO is able to perform tasks, according to transparent rules, with no need for human decision making. Tomio Geron
from Protocol leads the curated articles this week because he asks the ultimate question - can a DAO replace a corporate entity, thus ending centuries of corporate structure development. He goes through a list:
But can DAOs fund startups, replace crowdfunding campaigns or take the place of the trusty LLC? Advocates say that emerging tests of the model show it could bring more transparency and inclusiveness to businesses.
He also asks:
DAOs could be another way to form LLCs, but can they really replace companies? Crypto-friendly Wyoming passed a law in July
allowing people to create an LLC with a DAO that has an Ethereum address. If a conflict arises in a DAO, a judge in Wyoming could rule on a dispute. But this wouldn’t work if one of the parties is outside of Wyoming, Jackson said: That aspect of the law hasn’t been tested.
It’s not either/or. Some DAOs need to register as LLCs and have done so. The LAO is a Delaware-registered LLC that is “primarily administered via an online application (a ‘DApp’) and related smart contracts,” its website says
. In other words, the DAO structure provides coordination and voting, but sits on top of the LLC structurally.
However, Geron’s conclusion is less than wholehearted:
That may mean that for some time, the DAO won’t replace the LLC: Instead, it will ride on top of that structure’s established protections. Expect a growth industry in legal advice for starting your DAO LLC
I am more optimistic that software will increasingly replace corporate structures and that value will shift from share ownership to token ownership. I agree it is a process, but taking a look at projects like LUNA
and Terra UST
and the anchor protocol
it is already obvious that the underlying infrastructure for programmable money and effort are being built now.
In other news, The Information accused Apple of doing a $275 bn deal with China, but really it is just business as usual. Steve Case noted the growth of non-Silicon Valley seed-stage investing and Atomico released its State of Tech in Europe report. I was most intrigued by rumors that Andreessen and Horowitz are stepping back from day-to-day operations at A16Z and buying property in Las Vegas. I don’t know if I believe that…..but lets hope the IRS do, for their sake ;-)
More in this week’s video