– An Ukrainian DAO raised about 8 million dollar for the war effort? How do you see the role of DAO in international financing for economically ravaged/weaker countries?
There’s certainly potential in quickly and securely using DAOs (decentralized autonomous organizations) for financing for troubled parts of the world. The case of the Ukraine DAO shows that such a decentralized structure can be spun up quickly and cheaply and engage with a community around issues of concern to individuals around the world. You can also see from the growing use of crypto donations in the NGO and charity sector that DAOS could become a more formal means to channel funds and with less cost in terms of money transfer fees, and with less issues with government bureaucracy by directing funds straight into the pockets of those most in need. In addition, as a collectively owned and managed entity with a set of rules written in computer code, the DAO offers the potential couple with good governance, to avoid corruption that can damage already economically weakened countries.
– Russia has now been imposed multiple economic sanctions. How will DAO in particular play a role in Russian economy now that it will largely be cut off from the international financial system?
It may well be that civil society groups and civilian organizations faced with the impact of economic sanctions will use DAOs to bypass central government restrictions and appeal directly to people across the world for financial help. That will pose problems for the DAO as a model for co-operation as it raises pertinent questions about governance, how do you prove governance and how do you resist your funds being secured by state organizations. However, with the likely collapse of the Russian economy cryptocurrency gives ordinary Russians the opportunity to safeguard funds, as well as to use DAOs to pool resources to meet the needs for housing and heating to name two essential requirements for societal infrastructure to sustain the fabric of civil society in the face of the possible collapse of central government.
– Do you the ongoing Ukraine-Russia war as an inflection point in the mass adoption of DAO system? and how?
In fact, the rise of the DAO is closely tied to the emergence of cryptocurrency with the launch of Bitcoin back in 2008. It set the template, where typically the DAO founder has no workplace and no employees, but the project continues to run quietly because a group of people who believe in the project contribute to it.
More than a decade later, this DAO-based project has a market value of $1.3 trillion, making it one of the world’s top five company in terms of market value. Yes, Bitcoin is the most successful DAO right now, and its founder is the anonymous Satoshi Nakamoto. There is no boss or employees to manipulate, and all such organizations operate autonomously and anonymously. This is DAO’s core value.
More recently, the trend in using DAOs specifically to raise money for campaigns with a political theme have also emerged, in the lead up to the war in Ukraine. Notably ConstitutionDAO was founded on November 11, 2021, by a group of cryptocurrency enthusiasts. Its creators hoped to raise funds through the DAO method in order to purchase a copy of the US Constitution to realize the great dream of “putting the Constitution in the hands of the people,” and attracting over 17,000 donors. ConstitutionDAO took just nine days to raise approximately 11,000 ETH, which is worth more than $47 million.
While in December 2021 a DAO created to raise money for Ross Ulbricht, the jailed founder of Silk Road, announced that over 1,320 people raised over 2,800 ETH in to win the auction for Ross’s NFT. In short, the main reasons for FreeRossDAO’s popularity are its association with NFTs and people’s sympathy for the unfair treatment of Ross.
Taken in this context the mass adoption of DAOs to raise money to support the Ukrainian people is part of a growing trend, highlighted by the urgent need for resources to help refugees and civilian organizations. Indeed, the inspiration for the Ukraine DAO, the leading DAO which has raised over $13 million in crypto donations to date, came from a UK-based Ukrainian activist Alona Shevchenko who works with FreeRossDAO. Connecting to her network of friends led to the connection to Nadya Tolokonnikova of Pussy Riot, who launched the DAO on February 25 along with Trippy Labs and members of PleasrDAO, which was behind FreeRossDAO.
Therefore, the launch of the Ukraine DAO is in many ways simply a recognition of the already growing use of DAOs to raise funds for specific causes; the Russian invasion was the catalyst but whether it is a ‘tipping point’ remains to be seen. Some of the previous issues such as concerns about crypto scammers using the situation to fraudulently raise funds have emerged concerning published crypto addresses when queried by Ethereum’s founder Vitalik Butelin. Which is why the use of the DAO mechanism, which provides greater transparency has proved so popular as well as the means to organize collectively around it. As stated on the Ukraine DAO website, similar to a direct P2P crypto donation method using a DAO coupled with crypto as the funding mechanism means that: “Decentralized Autonomous Organizations are a model for the world to witness how people with a common purpose can join and work together quickly to distribute funds to present humanitarian causes.”
The speed and global reach of the Ukraine DAO, bypassing the problems caused by using conventional funding means whether through central funding institutions such as the banks or examples such as the Patreon startup, which returned money raised for the Ukrainian army, certainly shows their power for future fundraising in Ukraine. Whether this will mean that DAOs will work as a broader model for organizational structure is another question. DAOS have also caught the imagination of the startup community in the US for example, with VC money following suit. That entrepreneurial interest includes celebrity crypto owner Mark Cuban, who added a note of caution in highlighting the importance of good governance to provide long-term benefit to DAO members. “The future of corporations could be very different as DAOs take on legacy businesses,” he is quoted as saying. “Entrepreneurs that enable DAOs can make money. If the community excels at governance, everyone shares in the upside.”
– DAO, largely speaking, is legally still undefined. In the sense, there is a lot of gray area when it comes to DAO. Do you see DAO as a tool to channel the wealth of people who have been sanctioned?
It’s correct to say that DAOs can be used by any group of people with a collective purpose in mind, harnessing the power of cryptocurrency and guided by a set of principles embedded into the smart contracts that regulate the DAO’s operations. However, as recently outlined by the industry organisation CryptoUK, the converse is that by the nature of crypto its very possible to track any illegal funds coming out of Russia. For example, that are a lot of coin swap pools that are trackable, which can be monitored. So, when it comes to trying to evade sanctions it shows that the crypto industry has the capability to react and mobilize in real time to freeze or block funds and also to trace transactions to a single wallet where required. “Crypto transactions are not anonymous and untraceable. Through Public / Private sector collaboration we can quickly inform the criminal world (or those looking to circumvent sanctions) that this technology is exactly the opposite of what they are looking for in terms of anonymity and lack of traceability,” confirmed CryptoUK.
– How can DAO become more legally secured across the world, in order to make sure it is not misused by non-state actors?
While DAOs offer an alternative to organizing a corporation with decision making baked into the code, funding via the Dao’s token, and decisions decided by the whole community, in practice they currently lack the legal status of a corporate entity and a consistent regulatory framework. The token itself depending on the country’s regulations may be deemed as a security and come under tight legal regulations of its own, potentially opening up members of a DAO to liability. At least in the US as unincorporated entities, DAOs do not need to follow the legal formalities of incorporation such as registration, bylaws, and contracts. As a result, DAOs are treated as unincorporated partnerships. In a partnership, each individual has unlimited liability. Therefore, if the DAO is hacked or declares bankruptcy, each member is exposed to liability for the entire amount of funds. This key aspect of the legal status of DAOs for fund raising would need to be resolved to ensure they are not misused by non-state actors. It maybe that a lead would need to be taken at an international level, such as through the United Nations, as well as by individual nation states if the DAO is to prove sustainable from a regulatory standpoint, therefore.
Original Source: https://newslookout.com/feature/interview-with-anndy-lian-role-of-dao-and-its-future/
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
