DAOs Can Have A Soul – SBTs and Value Creation

I finished reading a paper released a few weeks ago by Glen Weyl, Puja Ohlhaver, and Vitalik Buterin called Decentralized Society – Finding Web3’s Soul. I’m not sure if it was because they had a quote from Lao Tzu on the front page, but I found it to apply to DAOs.

Soulbound Tokens and DAOs

At the root of the thesis, the paper describes a term called DeSoc, which is “a co-determined sociality where Souls and communities convene bottom up as emergent properties of each other producing plural network goods across different scales”. Souls are the accounts or wallets and Southbound Tokens (SBTs) are publicly visible, non-transferable, and possibly revocable tokens.

The paper asks the readers to consider “a world where most participants have Souls that store SBTs corresponding to a series of affiliations, memberships, and credentials. But the true power of this mechanism emerges when SBTs held by one Soul can be issued or attested to by other Souls who are counterparties to the relationship”.

Sure, this may sound a little fluffy, but the core concept is rooted in nature. I’ve written previously on the comparison of emergent phenomena to the mycelium networks that connect trees in a forest far below what is visible above the ground. Quantum physics also presents the concept of entanglement when two particles become connected no matter the physical distance in space. Both of these concepts are quite real despite our full grasp of their inner workings.

Let’s consider an analogy. The study of holons presents most things as part of a bigger picture of wholeness, just like cells form organs, and organs are the biological framework for humans. Imagine the ocean not as a vast body of water but as a collection of water molecules flowing in coordinated and random movement. Now consider that each water molecule has relationships and interactions with other water molecules, and more abstractly, think about the exchange of information between those molecules somehow serving the connected whole of the ocean.

What if that information powered a new collective capability for the ocean? If the ocean collectively controls this new capability, it sounds pretty interesting, but if a third party controls that capability and uses it for its own benefit, it becomes less interesting. Even more, what if each water molecule could control its participation and be rewarded for it?

If you think about it, with web2 (mainly social media) we are already giving away this information. In this case, people are the water molecules and their interactions and relationships are tracked and that information is collected and used by a third party. The social context of data is one of the most powerful pieces.

Concerning personal data, convenience and privacy are inversely related, meaning that for the convenience of the frictionless connectivity to other people, you are paying for it with your privacy. The current system looks at individuals as objects.

The good news is that a new model is emerging that views those same individuals as agents. New models that challenge legacy systems often have an uphill battle especially if the majority of users favor convenience over privacy. So, the question remains, do the individual water molecules find benefit in this coordinated capability, and are they willing to share information with the other water molecules to make it happen?

So what could this mean for DAOs?

Spinning Up Project Teams What if there was a way to quickly assemble a team of proven experts with minimal investigation and vetting? The paper presents the idea of Soul Drops, which are like Air Drops with a computational element that searches for unique combinations of SBTs within and across communities.

DAOs could use this capability to power a rotational leadership dynamic that identifies and elevates members with certain superpowers that are needed to drive a specific season of leadership. DAOs could also use SBTs to control free riders or bad actors by revoking SBTs for members that aren’t fulfilling their commitments to the community.

Rewarding Collaboration Across Differences This could prove to be the most powerful use case with the largest impact on the global community. The paper references this quote from Elinor Ostrom (known for her work on the governance of commons), “ (the) problem is to help communities made up of imperfectly cooperative but socially connected individuals overcome their social differences to coordinate at scale in broader networks”.

Collaboration with people that hold our same beliefs is easy, but working productively with those that hold dissimilar beliefs is more powerful. Could this kind of collaboration foster a more understanding and connected global community? Would individuals with this validated superpower be more sought after for certain projects?

How could we test it?

A perfect microcosm of what web3 could be is cultivated within DAO ecosystems like Seed Club, Syndicate, SuperDAO, DAOHaus, and others. What if each DAO within the ecosystem issued SBTs to those that were involved, committed, and doing work to move the mission of their DAO forward. On top of that, what if each DAO ecosystem issued a similar SBT to those members that were doing the same thing across multiple DAOs.

Here is a hypothetical example:

Merritt is a member of Lacrosse DAO and applies his programming skills to help build the infrastructure to support the DAO. Lacrosse DAO is part of the Syndicate ecosystem. Lacrosse DAO distributes the SBT to Merritt validating his continuous contribution to the DAO. Merritt’s friend tells him about Cheeseburger DAO, which is also part of the Syndicate ecosystem.

Merritt is aligned with Cheeseburger DAO and applies to join. Cheeseburger DAO sees his SBT from Lacrosse DAO which shows he is a valuable contributor and accepts him as a member. Merritt jumps in and helps the new DAO with similar programming, and they reward him with the Cheeseburger DAO SBT. Syndicate immediately notices that two DAOs in their ecosystem issued SBTs to Merritt, and Syndicate issues their SBT to Merritt that validates valuable contributions in multiple DAOs in the Syndicate ecosystem.

In this case, SBTs could be used to signal value creation within and across DAOs. It could be a compelling test of cross-community functionality. Going back to the philosophical side, do the water molecules in the ocean find value in plural intelligence, and are they willing to participate to make it happen?

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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.

Metaverse Methodologist, Connector and Creator