But when historians look back in a couple of decades, will they see that this stage as a turning point in the transition from an economy dominated by corporations to a new crowdsourced model where participants will be incentivized with tokens to grow a job and share in the proceeds?
It might sound far-fetched since mega-corporations dominate the present reality, but envision a world in which Uber drivers and their passengers own and operate a decentralized rideshare network. Or you where Airbnb real estate owners, guests and even the cleaning staff share in the success of their combined company.
Anderson states the idea of a planetary collective attempt has become jaded by working from home.
„This sort of concept of working for a company in which you appear every single day, and there’s an office […] that’s sort of been busted ,“ he states. „It forces people to own questions regarding do we want that going forward?“
The“Uber as a Decentralized Autonomous Organizations (DAO)“ concept has existed since 2016 when blockchain job Arcade City started talking this up in the aftermath of a successful fundraise for the ill-fated The DAO. However, it’s now finally beginning to capture the zeitgeist. Meanwhile, technology billionaire Mark Cuban tweeted at the end of May the DAOs taking on businesses was the“ultimate mixture of capitalism and progressivism.“
The future of corporations could be very different as DAOs take on legacy companies. It is the best mix of capitalism and progressivism. Entrepreneurs that empower DAOs can earn $. If the neighborhood excels at governance, everybody shares in the upside. Trustless can pay
They allowed a combined model and collective ownership of protocols, becoming popular in DeFi because a form of governance and as a way to crowdsource development.
Yield farming might have begun life with a poor reputation as guerilla marketing-meets-Ponzinomics, but it immediately became clear it was a fantastic way to benefit the many active participants in a neighborhood with tokens and many times a share of their earnings. In turn, this incentivizes the top participants to help grow the routine, bringing ever greater numbers to the undertaking.
„That ownership component is what has the capacity,“ explains Anderson. „And the best communities are those in which you’ve obtained the earliest adopters, earned by the get-go, and they become your biggest fans, they become customer support, they become business development.“
Thinking bigger
If it works in DeFi, there’s no reason it can’t work in other markets and industries. Any marketplace could potentially benefit, which doesn’t mean only tokenized versions of eBay or Uber. Anderson uses the illustration of a clothes production line in which the sourcing of materials, the creation of clothes, distribution and earnings could all be incentivized and coordinated through this new model.
„I think what we’ve seen over the last few years is a summit of corporations. And what I think we now have with the creation of DAOs is nearly as a replacement for a limited liability corporation or a corporation in general,“ he states. „it is a replacement of incentivization layers, like stock and equity options, with tokens.“
„It is largely DeFi, but enlarging beyond that, I think you can start to take this model into any marketplace. I think it ultimately becomes a really distinctive way of incentivizing participation.“
The model has plenty of benefits: being decentralized means that anyone, anywhere in the world who has a concept for building in addition to the protocol — who figures out a better way to do anything — can jump in and reap the benefits. The process of iteration and evolution speeds up, too. No longer must you await the grinding gears of a corporation to grudgingly accept a new way of doing things. It simply occurs via an efficient competition which produces the best result for a collective.
„Finally, making things more efficient and scalable, but more fair and open,“ Anderson explains, adding that it enables anyone, anywhere, to compete with technology entrepreneurs in San Francisco or Silicon Valley, that previously had the advantage of being in close proximity to funding.
„Breaking down those walls is really exciting, for the future of the world, but also the future of work“
„Community ownership, I believe, is a fundamental difference and a fundamental invention,“ he states. It’s a completely new design area; we’re only scratching the surface as to how we can use these in novel and different ways.“
More equitable than equity
In a way, DAOs and DOs are a modern spin on older concepts around ventures, co-ops and collaborations, made a thousand times more efficient by tech. And while our psychological models for this sort of possession today seem a lot like handing out equity, Anderson expects that to change as the usage of tokens grows and evolves.
Based on Andersen, using a very clear vision of the future — or a solid thesis concerning how things can evolve into the future — is one of the things which separates Framework Ventures from a number of other investors in the area. Unlike the short-term, price-oriented thinking that predominates in crypto, Anderson and co-founder Vance Spencer consider in studying where electronic fund is led over a span of five to ten years and place their bets so. They’re very popular guests on DeFi-themed podcasts as a result of their inspirational and well-reasoned thoughts about the future.
Framework’s first big success came until they had even formalized the fund, with Anderson and Spencer creating a thesis around the requirement for smart contracts to get secure, reliable real-world Info, which advised their investment in decentralized oracle community Chainlink:
„„Mass adoption of intriguing smart contracts will require data feeds which are protected, external to the blockchain (i.e., interest data from a bank), and maintain privacy when incorporated into a smart contract. Data feeds which meet these conditions are not currently offered.“
Anderson brings up the case of Don Valentine, the late venture capitalist who based Sequoia Capital, who spent in Apple after using a similar epiphany that personal computers would be in every house and on every office desk. This is the secret to successful VC investing, Anderson states.
„Finding the bits that fit into that vision and to that new world, I believe, is really the easy part,“ he states. „The tough part is being able to discern, you know, what that future condition looks like.“
But in September of his freshman year, the fourth-largest investment bank in the United States — Lehman Brothers — collapsed and filed for bankruptcy. That event resulted in his fascination with fund and his degree in economics and computer science.
In the aftermath, he would hear firsthand accounts of the chaos on Wall Street in the relatives of his friends, and he’d pore over reports from the New York Times and WSJ.
„Once you start to really dive into how in-depth and complex it’s, I don’t think there’s anyone that really understands the whole system,“ he states. „You can spend a lifetime trying to figure it out“ He gravitated towards fintech as a possible solution.
How can we construct applications that jelqing or highlights the power of fund?“
He was initially torn between pursuing a career in finance or technology and dabbled in equally. While interning at Apple in 2011, he was dismayed to find an organization which produces such tasteful merchandise was organized as a“stodgy sort of corporate institution,“ in which even many of the department heads did not know what product was launch next. He realized he was unlikely to make an impact there.
Anderson spent three weeks as a summer analyst at Barclays Bank, where he researched companies contemplating going public like GoPro and Dropbox.
„I was tired of covering them, and I realized I only wanted to go work for them,“ he clarifies. „And so that’s ultimately what led me to Dropbox.“
He spent three years at Dropbox and another two at Snapchat, largely in the use of product manager. This knowledge will later end up being an integral experience in how he approaches the increase of crypto networks, none of which operate at customer technology levels.
The pair bonded over ETH pretty much from query one.
We started to get an informal investment venture together, where we were considering different angel chances, and it just sort of grew from there.“
It is 1 thing to develop a crystal clear vision of their future, and it’s another to gain from it. Just like most things, timing is everything. Regrettably, Anderson and Spencer have been approximately three years ahead of the market in 2017 using their first enterprise, Hashletes, basically an NFL version of this popular NBA Top Shot.
Collectible NFT player cards allowed users to input fantasy soccer games and win prizes. Among Anderson and Spencer’s contentions about NFTs, which we’re only starting to see come to fruition in 2021, is that NFTs need to have usefulness in addition to provide digital ownership.
Hashletes was the first app from the iOS store linked to ETH, but the job only lasted a season and a half, killed off with large licensing fees and a lack of understanding or interest about NFTs at that moment.
„It is definitely hard to push something, particularly once you know that this thought ought to be working but the infrastructure, the tech just isn’t there,“ he states. „[American entrepreneur] Marc Andreessen has said that there are no bad ideas, it’s just the incorrect moment. So, there’s a little bit of that. You know being too early is also the same as being incorrect.“
„I would say we certainly built our compassion toward entrepreneurs in the area. And that’s what gave us a great deal of this insight to how we wanted to construct Framework and why we wanted to construct Framework.“
Given the newfound interest in NFTs this year, Framework Ventures is once more pursuing the space.
Anderson’s investment thesis is still online, describing why they had a price target of $10–$20 for the 11 cent token. It’s already blown past that: At approximately $25, the market represents a greater than 22,000% return in about three years.
„We left probably 20 to 25 distinct investments as angels prior to starting Framework, but Chainlink was undoubtedly the best performing out of these. However, I think that it’s the one which we’ve got the most intimate relationship with, just due to the breadth with which they can expand to all the different industries.“
They formalized the venture afterward, with the Link investment leading to a lot more, including Aave, dHedge, Synthetix, Yearn.finance, Dodo, Edgeware, Fractal, Futureswap, Kava, Pods, Primitive, Teller, The Graph and Zapper. „It is how we’ve got to know all these other groups. Chainlink oracles are usually the commonplace choice,“ he states.
The importance of community
Another assumption is that in a decentralized, open world world — in which any protocol can be cloned and watch its liquidity siphoned off — it’s the quality of the community around a job that’s more important than almost anything else.
„The neighborhood is something which has the true kind of defensible moat,“ he states. „And therefore community development for us is paramount. We like to say, you can evaluate the team, you can evaluate the item, you can evaluate the current market, but the most defensible elements of any investment are going to be the core team and how that changes to the neighborhood and community ownership.“
Instead of mere investors, they’re active participants from the area, too, if highly influential and cashed-up community members. A sister thing called Frameworks Labs includes 17 software engineers building tools and systems to boost growth and engagement for projects they have invested in.
„We’re one of the bigger Chainlink nodes within the community. We’re one of the bigger Graph nodes. We’re busy dealers if we’re investing in an exchange, liquidity providing,“ he states. „It only means that we’re rolling our sleeves up being one of the bigger users, one of the largest providers for the majority of the investments we make; it’s sort of how we specify our edge.“
Anderson and Spencer see this as an ideal alignment of interests, and it’s why this new decentralized organization model can take some of their power back from the technology monopolies and corporations that dominate everyday lives.
It may be another utopian vision, but perhaps the DeFi/Web 3.0 model can succeed where the net failed. He states,“Google had this famous line of:’Do not be evil.‘ Well, blockchains enable something much better, which is:’Can’t be wicked. “‘
„If you construct cryptographic guarantees about transparency and decentralization, you know, there isn’t the capability for a corporation to extract value in precisely the exact same way.“
Radical transparency means the best projects with the most well-thought-out incentives will entice the sharpest minds, and also those that hold 50% of their tokens back to dump on retail later on will get shunned.
„I think you do not really get that much with these types of versions because everything is transparent and the incentives are aligned with all the users of this item, the users using the networks, more so than anything I’ve seen in the previous tech generations“
