Demystifying DAO’s: the Fundamentals

Episode Transcript:

[00:00:00] Kassen: So a larger kind of. Trend or pattern that we've seen that has, I think, culturally led to this renewed interest in DAO’S this phenomenon of people feeling like they have less trust in institutions with defy. We see that emergence of, decentralized finance, because people have less trust in banks with NFTs it's because people have less trust in the people and platforms who are distributing Arjun, supposed to be helping artists, but actually making more money than the artists themselves.

[00:00:31] Kassen: and with Dows I think it's this similar parallel. this idea that people have less trust in the organizations and people at the top who are making those decisions.

[00:00:45] Isotta: This is Art Is… a podcast for artists where we brainstormed the future of the art world and the creative industries today. I'm sharing part one of my conversation with Kassen Qian who kindly explained some of the crypto terms. I've wanted to learn more about namely what crypto miners do, what tokens are and what a DAO is.

[00:01:05] Isotta: Kassen gives a really valuable perspective on why Dow's exist and how they work talking us through various examples and possible use cases. Cason helped clarify a lot of. Clearly and simply, and I really liked discussing these topics with her. So I hope you enjoy this episode as much as I did also.

[00:01:24] Isotta: I would love it. If you took a moment to reflect on who in your life might also benefit from listening to this podcast, when you do please share art is a podcast for artists with them So we can continue to grow the show organically and brainstorm the future of the art world together.

[00:01:40] IKassen: my name is Kassen Qian. I am currently finishing up my last semester of undergrad. In Durham, North Carolina. I'm originally from Boulder, Colorado, but in North Carolina to finish school, I'm studying computer science and cultural anthropology and have been relatively new to the data space.

[00:01:58] Kassen: To be honest in crypto in general, set up my first wallet this past. and since then, I've just been spending a lot of time in and out of the web ecosystem, thinking about Dow's and new models for coordinating, and building communities. So it's just been super fun, meeting people and learning a lot.

[00:02:15] Kassen: I haven't met too many other people who are studying both com site and anthropology. If you are, give me a shout because I would love to meet you. I originally came into college, not actually wanting to study comp site. I just wanted to study anthropology. I was really interested in doing.

[00:02:31] Kassen: Cultural kind of explorations of different societies and the way that people organize, which is very interested in that did a lot of social justice and nonprofit type work that, was very community-based in high school. So that's what I wanted to study going into college. the summer before college, actually my friend had roped me into working for her at tech startup.

[00:02:53] Kassen: So I was just writing really basic HTML, CSS, JavaScript pages for her startup, and really felt like. We were having so much impact with just a few kids and, some code. And that kind of got me interested in computer science, but, kind of the reason why I decided to study both is because I never felt like I could only be contained into Comp. Psy. as a major, even though I was really interested in it academically.

[00:03:18] Kassen: And just the impact that it could have. I just have always been really drawn to understanding the cultural. Nuances of the way that people come together.

[00:03:29] Isotta: So how did you come into the world of crypto?

[00:03:31] Kassen: I think I had a soft. Kind of entrance into crypto. And then I later had a more established I'm going to set up a wallet and actually fall down the rabbit hole. I think throughout this past year, We, collectively we saw the explosion of NFTs thanks to people's really large sale.

[00:03:50] Kassen: and throughout the pandemic, I had actually started to pick up digital art. So I was learning digital art. I was joining all of these different communities online and, just meeting a lot of really cool people. I had no idea really who they were, but, just around the globe, we were in discords we were on Instagram.

[00:04:07] Kassen: just seeing all these people create art together and quite a few artists that I had followed started getting into NFTs. and. Prior to that, I had seen NFTs on my Twitter feed and whatnot, and I was just kind of like, this is a crypto thing. I'm not into it. I don't really see the value. but when these artists started to get into NFTs and really start to make a lot of money off of them, I saw the value that it brought to them because previously digital artists were.

[00:04:34] Kassen: Set up their own online shop, make a website, sell each of their prints for eight to $10 maybe. and it shocked me because, a lot of people create really beautiful art and, I just felt like they should be paid more and NFTs were starting to seem like an avenue for artists to actually have a livelihood for themselves.

[00:04:51] Kassen: that was one part of it where I felt like, wow, like there really is something to this. I think NFTs can really empower the modern artists who, prior to NFTs, they were just trying to sell their prints, trying to get exposure via social media. And a lot of the time artists would be very, under the command of algorithms, right?

[00:05:09] Kassen: Like the exposure that you get really is determined by what your Twitter feed shows people, what Instagram shows people. I just thought it was really cool to see artists that I really love making money. And into the summer, I had participated in this on-deck fellowship called catalyst.

[00:05:25] Kassen: basically they brought together, a lot of young people from all around the globe who were interested in startups and really doing their own thing. It came at a really great time for me. met a lot of really great people who really inspired me. And, one of them was my friend Keenan shout out to him.

[00:05:39] Kassen: he kind of pulled me down the crypto rabbit hole. I just locked DMD him. And I was like, Hey, I know everybody's talking about crypto right now. I'm going to set up a metal mask wallet, where should I start? And he sent me so many helpful resources.

[00:05:52] Kassen:

[00:05:52] Isotta: I was wondering if, to start us off, you could define what mining is.

[00:05:56] Kassen: Yeah. So in a blockchain like Bitcoin or Ethereum, you have this network of nodes basically. and these nodes manage and verify exactly what goes onto the blockchain. And so every time a new transaction occurs that transaction needs to be verified as correct, and true before it gets added to the blockchain onto the public ledger for everybody to see.

[00:06:18] Kassen: essentially. the way that you mine is you use computing power and you do complex math puzzles to be able to, verify that this block is valid and miners, their job is to take new blocks that want to be added to the blockchain and verify that they are indeed, like they're not a bad block.

[00:06:36] Kassen: They should exist in the blockchain. It's a valid transaction, and then they'll put it on the blockchain. And That's a very high level. Like miners are the people who make sure that the blockchain can continue to run as this public ledger.

[00:06:48] Isotta: That's really interesting getting to see the human involvement in crypto One of the things I was most excited to chat to you about today is your interest in Dallas, which is something I'm really excited about. So perhaps to start us off, you could define what a Dao is.

[00:07:04] Kassen: Dow's in general are just really confusing. I think so many concepts in crypto are really confusing and it totally makes sense. so a doubt or like a Dao, it stands for decentralized autonomous organization. And that sounds very jargon-y and confusing. I think. Honestly, a lot of people were still figuring out what does it mean to be decentralized?

[00:07:25] Kassen: And what does it mean to be autonomous? just from an organizational perspective, but I think really what a Dao unlocks that we haven't seen before is ownership in an organization. So traditionally we have these organizations that are pretty hierarchical.

[00:07:40] Kassen: So if you think about the regular company or corporation, you have a CEO and then other kind of C-suite executives. And then, this sort of management chain, we call it like the corporate ladder, right? And so it's pretty hierarchical. A lot of decisions are top-down, pretty traditional. And we also kind see that sort of format in some like community is where somebody will start a community and then everything will be pretty top down.

[00:08:05] Kassen: and what's different about a Dao is that members are organized in a more peer to peer fashion. So it isn't necessarily super. like flat hierarchy, but what's really different about a Dow is that it relies on, what we call smart contracts, which are programs that are stored on the blockchain, that when certain conditions are met, it'll automatically execute some actions.

[00:08:30] Kassen: And so. Because a doubt is using smart contracts to execute different actions and make decisions. Those decisions are oftentimes based on the votes of members of that organization. And because of that, it's a lot less people are making decisions behind closed doors and a lot more of this sort of peer to peer distributed consensus of these different members who are putting in their votes and feeling like they have a say, and the code is what decides.

[00:08:58] Kassen: the future of the organization. and that sounds very scary because to a lot of people, it's in a way saying like code is law. Like we're coding up our legal agreements and our contracts, and we're putting it into programs where, if we put in our votes and then, the, these conditions are met, then the blockchain will just automatically make these decisions for us.

[00:09:19] Kassen: and. it's this new way of interacting with technology in a way that we haven't seen before in a collective environment.

[00:09:26] Isotta: So one example that has been in the back of my mind lately is, if you think about an elementary school, so traditionally an elementary school, Principles and administrative staff have a lot of power. They decide, what resources teachers get to have textbooks wise, electronics wise, where the school budget goes basically.

[00:09:46] Kassen: And that sort of decision making power usually lies. Administrative staff and teachers have a lot less say, which is why you often see teachers having to use their own money to buy textbooks and buy laptops for their students, and really use their own money to, buy these resources because the school does not allocate enough adequate resources for their classrooms.

[00:10:06] Kassen: and that's what we see in this traditional model of, this decision-making power being more centralized towards the top of the hierarchy. In maybe like a hypothetical elementary school. That's more based on this down model. Let's say for example, each teacher would have a certain number of votes.

[00:10:23] Kassen: and maybe that could be based on how long they've been at the school or their contributions to the school in terms of like how much have they helped students have good learning outcomes or how much have they elevated the school in terms of becoming a really good environment. and so let's just say each educator or administrative staff.

[00:10:40] Kassen: based on a certain number of factors has an, a number of boats and the school has like a shared budget or a shared treasury of resources. And usually in this web two world, the principal and other people would decide on how to use that budget, but in a web three world where everybody has these votes, you can use your votes to, voice, your input on decision-making in terms of how to use the school's resources.

[00:11:04] Kassen: So if a teacher has. Made a lot of great contributions or if they have been at the school for a longer time, or however you want to qualify how many votes they should have, then they would be able to actually have decision making power to kind of say, I would like the budget to be allocated in XYZ way.

[00:11:21] Kassen: and therefore I think that's, just the best way to use our budget. And so everybody gets to have a say in these decisions. Processes. and it also facilitates more transparency in terms of how decisions get made in organizations, because we've all heard so many times of,in schools or corporations or these other sorts of institutions that decisions are made at the top level.

[00:11:41] Kassen: And then it percolates down to the bottom level and people at the lower levels like, why did this happen? I don't know what's going on. company reorgs, all these different things. I just think that. It offers a little more transparency and the feeling of, actually feeling like as a member of the organization, you have a lot more of a say.

[00:11:57] Isotta: Okay. So how is this vote facilitated? Is it time since. And does it work the same for both small and large organizations,

[00:12:05] Kassen: generally a bigger philosophical questions surrounding Dows is, how do you kind of balance this idea of decentralization and everybody having a. With the idea that with centralization comes the benefit of efficiency, when it comes to decision-making, right?

[00:12:20] Kassen: Because if you want everybody to have input and you want to reach like 80% participation for voting before making a decision that could take forever. I think what it really comes down to is being able to have trust in those who are voting in the decision making process.

[00:12:36] Kassen: So a larger kind of. Trend or pattern that we've seen that has, I think, culturally led to this renewed interest in DAO’s this. Phenomenon of people feeling like they have less trust in institutions with defy. We see that emergence of, decentralized finance, because people have less trust in banks with NFTs it's because people have less trust in the people and platforms who are distributing Arjun, supposed to be helping artists, but actually making more money than the artists themselves.

[00:13:07] Kassen: and with Dows I think it's this similar parallel. this idea that people have less trust in the organizations and people at the top who are making those decisions. Maybe you don't necessarily need everybody to vote, with a certain percentage of participation or within a certain timeframe.

[00:13:24] Kassen: as long as you can trust that the people who are putting in their votes are people who understand what's going on in the organization and can, make us sound, have sound judgment in terms of what you're voting on. so I think Dow's really have this promise of collective trust.

[00:13:39] Kassen: one thing that is worth mentioning here is this idea of, Tokenization in DAO’s. I mentioned before that Dows are unique and new because they allow members of an organization to have more ownership in the outcomes and decision-making of that organization.

[00:13:55] Kassen: And, the way that people put in their votes is oftentimes with, tokens. token. It doesn't necessarily have to be like a token necessarily. it can be like maybe an NFT or something else that is technologically existed on the blockchain and quantifiable. but the idea is that the way that we can decide on who to trust with decision-making power and who was qualified, quote unquote, to make these decisions,or give their input into these decision-making processes is, Basically see how many tokens they have.

[00:14:28] Kassen: And so a token, we can just think of that as, for example, like if you play video game has like an in-game currency, right? It doesn't really have value outside of that community or outside of that game. But within that game, you can use those tokens, whatever currency that is to, do things within the game.

[00:14:44] Kassen: So you can think of tokens as this, This symbol that represents ownership within a Dow and oftentimes within Dows, that token will have some sort of relation to actual monetary value. but other times it doesn't necessarily have to be able to be exchanged or whatnot into dollars. but it will have value inside the organization in the sense that if you have more tokens, you can do more things within the Dow.

[00:15:07] Kassen: The reason why that's important to your question is because when we decide on who should have power and who should have the trust to be able to make those decisions, we can look to how many tokens they have as a proxy for how qualified they are. So for example, if the Dow has, certain processes for being able to, contribute.

[00:15:26] Kassen: So let's say if we go back to the school example, a teacher. Having a certain amount of tokens. And then if they win a teaching award, the school gives them like 10 tokens. Or if students feel like they really love the teacher and want to come back next year, that's a sign of success. And so they get more tokens.

[00:15:42] Kassen: Right? And so you can use tokens as a way to measure quality of contributions and how qualified that person is. And I think that's one area where the more autonomous side of a Dow in terms of using tokens as quantifiable thing on the blockchain to measure, where people stand within the organization, that's kind of like the technical part of it.

[00:16:02] Kassen: That's interacting with the social part of it, which is how do we actually decide, like what value people bring to the organization and how do we put that into a quantifiable. measure in terms of tokens.

[00:16:15] Kassen: I'm on Twitter at KassenQ my websites, casting q.com. I also write on sub stock and mirror, feel free to DM me on Twitter. I'm pretty active there. Always happy to chat and jam. I know that, this space is generally confusing and a lot of people have a lot of open questions, which is totally fair.

[00:16:34] Kassen: That, and that includes me. So I think we're all just learning together and just happy to, chat. Yeah.

[00:16:40] Isotta: Thank you for listening to Art Is… a podcast for artists. This episode I'd like to thank Katherine Chan for sharing her technical knowledge and interesting ideas with us. Stay tuned to hear part two of our conversation about web three and Dow use cases in the creative industries.

[00:16:56] Isotta: Coming later on in season three, please leave art is a podcast for artists, a rating and review on apple podcasts. It really helps others find. You can support the work I do by subscribing wherever you listen. And by donating to the podcast, the link to do so is in the episode description. Okay. That's it for now.

[00:17:15] Isotta: Thanks so much and see you next Wednesday