The Transformative Power of DAOs: A New Approach to Organizational Structure

How decentralized autonomous organizations (DAOs) are changing the rules in esports and beyond

Dec 13, 2023

UETH’s Second Weekly Workshop explored:

The shift to democratic governance in Decentralized Autonomous Organizations (DAOs), and how it overcomes limitations inherent in centralized Web2 frameworks.
OG Nouner Brennen Peters covers how DAOs are revolutionizing how we coordinate collective efforts for a wide variety of shared goals, highlighting examples from Nouns.
Esports veteran Peter Dager shares his perspective on the transformative effect of DAOs on funding and resource allocation, exploring its influence on the esports sector.

How DAOs are Reshaping Problem-Solving and Organizational Dynamics

Imagine a world where traditional hierarchical decision-making evolves into a collaborative, inclusive process involving all stakeholders. This transformation is realized through blockchain technology, enabling a decentralized system where everyone has a voice.

Decentralized Autonomous Organizations (DAOs) epitomize this shift, revolutionizing how we coordinate collective efforts for shared goals. In DAOs, each decision is transparently recorded on a blockchain, fostering trust and accountability. These organizations aren't just theoretical; they are practical, scalable models that bring people together for collective action, applicable in various contexts from small collaborations to large corporate entities.

In contrast to the centralized power structures of traditional Web2 models, where decision-making is confined to a few, DAOs propose a more democratic approach. Traditional models often create barriers to entry, limiting diversity and the flow of new ideas. They also tend to have opaque decision-making processes, leaving many in the dark about the reasons behind certain decisions. This often results in actions misaligned with the community's true needs and preferences, underscoring the importance of a more open, transparent, and community-centered approach.

IVANONTECH / Moralis Academy

DAOs Mobilize Collective Resources Towards a Spectrum of Goals

DAOs are revolutionizing the realm of funding and resource allocation with their unique approach. In contrast to the conventional models where a central authority dictates funding decisions, DAOs have democratized this process, significantly expanding the range of projects they support. This inclusive approach not only fosters a diversity of ideas and innovations, but also ensures a more equitable and transparent distribution of resources. Furthermore, this approach ensures a fairer and more transparent distribution of resources, contrasting with the bias and favoritism often seen in centralized systems.

The world of DAOs is notably varied, with each organization tailoring its structure and objectives to harness resources and collective efforts for a wide array of goals. For example, MolochDAO, operating on the Ethereum blockchain, pools capital to distribute grants to public goods Ethereum infrastructure projects. Contrastingly, Tribute Labs specializes in offering open-source, on-chain tools to facilitate community coordination across a range of investment DAOs like The LAO, FlamingoDAO, PunkDAO, and Spaceship DAO. These DAOs invest in NFTs, tokens and startup equity, guided by community governance and driven by the pursuit of returns. Another notable example is ConstitutionDAO, which was formed to bid for an original copy of the U.S. Constitution, showcasing the unique capability of DAOs to rally individuals around singular, extraordinary objectives.

During our workshop, Brennen Peters, an OG Nouner and Co-Founder of Nouns Esports, shed light on the operations of Nouns DAO. Nouns is renowned for turning each Noun NFT into a voting right, granting holders direct control over pivotal decisions, including the allocation of a significant treasury that exceeds 8500 ETH. The treasury, which grows with each daily Noun NFT auction, funds projects that “further proliferate the Nouns meme”. Open to everyone for proposing ideas for funding, Nouns has initiated a wide range of ventures, from supporting fashion ventures like Danit Peleg x Nouns, financing animated movies like "Rise of Blus," and sponsoring esports teams. One such team has notably achieved recognition in international Dota 2 competitions, showcasing the diverse and impactful reach of DAOs in fields like esports.

Revolutionizing Esports through DAOs: Insights from Veteran Peter Dagar

Esports veteran Peter Dagar (aka peterpandam) offered a compelling perspective in our workshop, focusing on the transformative impact of blockchain and DAOs in esports. He shared examples of how blockchain and DAOs tackle the industry's long standing issues of centralized control and opaque funding.

Traditional esports, often controlled by a few entities, leads to limited funding transparency and a top-down relationship among teams, players, and fans. Peter's work with Nouns Esports and the broader use of DAOs present a paradigm shift. Integrating blockchain and DAO governance, esports is moving towards a community-driven model. Here, funding and decisions reflect the diverse interests of the community, benefiting a wider swath of constituents - benefiting players and fans - in the process.

Implementing a DAO framework for esports facilitates sponsorship for teams and opens doors for new contributors in a transparent and accessible way. This approach shifts control and decision-making from central authorities to a distributed network of contributors. An example is the DAO's recent sponsorship of a female Counter-Strike team. The Counter-Strike team found Nouns Esports, submitted a proposal, including their performance statistics, rankings, funding needs, and goals, and was thoroughly evaluated and subsequently approved for sponsorship. This proposal, along with its specifics, is permanently recorded on the blockchain, ensuring public accountability and transparency of the team's commitments. Bringing esports onchain nurtures emerging talent, signifying a transformative era in esports.

Peter also highlighted blockchain's transformative role in increasing fan engagement in esports. Through DAOs, fans transition from being passive spectators to active influencers in their teams' direction, deepening fan connection to the sport. Fans are encouraged to suggest ideas and events that enhance the visibility of their favorite teams, with the potential for these proposals to gain funding for execution. Nouns Esports focuses on creating opportunities for fans at the grassroots level to engage with esports and develop their skills, addressing the traditional barriers in the industry that hinder the nurturing of fan enthusiasm. Moreover, Nouns Esports has launched POG, a platform where fans can showcase their multiplayer game highlights and earn revenue from fan-created content.

Nouns Esports is leading a community-driven revolution in the esports arena, nurturing growth and engagement at the grassroots level among players and fans. "The future of esports may very well hinge on crowdfunding and community backing, and DAOs are at the forefront of this shift," Peter noted. He highlights that while the ethos of a token can be multifaceted, ultimately, it mirrors the values and choices of its holders. The decisions made by the Nouns DAO members not only define the organization but also demonstrate the potential of this model in various sectors, from esports to professional sports and other community subsets. DAOs are redefining the esports world and beyond, shifting power from centralized authorities to the community, democratizing participation, and opening new paths for funding diverse and creative endeavors.

Get involved

Watch the full Workshop + student Q&A here.
Have an idea? Pitch Nouns! Anyone, anywhere is encouraged to submit a Nouns proposal if they believe it will benefit the Nouns ecosystem.
You can also check out Nouns Esports, a decentralized esports organization where anyone, anywhere can contribute towards its growth and success. Watch this intro video for a quick primer.
Tell us what you think on Discord or Twitter.
Curious what’s happening in the world of DAO funding? Learn more:

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