Can DAOs solve the biggest problems of our world?

A concept note on social DAOs by Krishna Vatsal Tyagi

Introduction
In September 2000, the leaders of 189 countries gathered at the United Nations (“UN”) headquarters
to sign the historic Millennium Development Goals, which included eight global goals such as halving
extreme poverty, gender equality, women’s empowerment, education, and so on. While some of the
objectives were met to some extent by 2015, we were unable to meet all of them. In 2015, the leaders
of 193 countries met again and agreed to carry forward the agenda of development goals, this time
with a total of 17 sustainable development goals (“SDGs”) to be achieved by 2030, including climate
change, hunger, quality education, clean water, and healthcare. However, according to the UN’s most
recent check report, Covid-19 has slowed the already slow progress on SDG 2030, and we will most
likely fail to meet them by the deadline.
You may be fortunate enough not to be affected by most of these issues today, but there is a good
chance that your future generations will be directly affected by most of them. As we speak, 811 million
people in the world are hungry, 2.2 billion people require access to clean water, and half of the world’s
population lacks access to basic health care.

But what is causing us to fall behind schedule?
There have been several reasons for the delayed development of these SDGs, such as:
1. A lack of a shared vision for achieving these objectives among citizens and their respective
leaders.
2. Lack of trust in private organizations (non-profits) working in these sectors because of
transparency issues, resulting in low citizen support
3. Fundamentally flawed concept of using pure capitalistic money to fuel socialistic efforts,
resulting in biases
4. Because the goals are not well communicated to citizens, no one on the ground believes it is
their responsibility to work or donate funds toward them.
5. There are fewer incentives, exposure, and growth opportunities in the social sector than in
the private sector, so top talent does not want to work there.
6. Inadequate infrastructure for facilitating democratised decision-making and collaboration at
global scale.

Because these are global concerns, global collaborative effort will be required to combat and achieve
the set goal of a sustainable future in which no one dies due to a lack of food, clean water, or access
to health care.

Is there a way to transform the social sector and accelerate the progress toward the SDGs 2030?
Yes, Decentralised autonomous organisations (“DAOs”), could be the key to turning the social sector
around. Never before has it been possible to transparently pool capital from citizens globally, or to
make collective and tamper-proof decisions on a global scale, but thanks to enormous progress in the
blockchain world and the emergence of the concept of DAO, this is already possible for a variety of
purposes and can certainly be explored for solving the world’s biggest problems by achieving the SDGs
on time.

What exactly are DAOs?
Let’s take a look at DAOs in their most basic form. DAOs are internet-based organizations managed by
a transparent set of programmed rules (smart contracts) that are distributed on blockchain and are
thus temper-proof. Unlike traditional organisations, there is no central leadership, and individuals
engage with one another through DAO to achieve a common goal. DAOs work by giving their members crypto tokens in exchange for permission access. Through the DAO’s referendum governance
procedures, everyone who has these DAO tokens can participate in the decision-making process. The
members can contribute the money to the DAO, which is held in crypto form via a smart contract (“on
chain” treasury) and may only be used according to the members’ collective decisions using multi sigs
(signatures). You may think of them as an internet-native firm with built-in treasury that its members
own and run collectively. Through the on chain proposals and voting mechanism, decisions are made
in an unbiased and transparent manner. A few popular crypto DAOs along with their on-chain treasury
balances are shown below. As we speak, millions of individuals and premier institutes like Stanford,
MIT and Harvard are collaborating in a transparent, trust less and decentralised manner to govern the
below mentioned on chain treasuries.

A Global Social DAO model to achieve global goals.
Given the mentioned issues, there is a pressing need to create a global social DAO platform with the
primary goal of accelerating the achievement of the 17 SDGs. Anyone (Individual, corporate or another
DAO) from any country, regardless of national boundaries, will be able to join the social DAO and
support social entrepreneurs working on their respective causes through grants from the on-chain
treasury. This can give top talent the impetus they need to work in the social sector.

The Mechanisms of Creating a Social DAO
The initial founding members can raise funds from contributors via a Simple agreement for future
tokens (“SAFT”). The founding team then can set up the necessary technical infrastructure/tools, hire
core contributors, and issue tokens against the SAFT to the governing members. Once governance will
have taken control, it can participate in the development of the DAO’s overall vision and operational
procedures through the on-chain governance mechanism. The on-chain treasury will provide its
members with complete transparency and control over how the treasury funds are spent.

Designing incentive and reward mechanics for the social DAO
The social DAO would provide members and contributors with global exposure as well as the
opportunity to directly impact millions of lives. Each member who contributes funds to the DAO will
be incentivized further by:
1. Deductions in their respective jurisdictional IRS filings.
2. one-of-a-kind NFT as a social proof of their contribution towards building a sustainable world
3. exclusive opportunities to attend global forums such as World Economic Forum, United
Nations Conclaves, and so on.
4. Volunteering opportunities with global forums and global change agents.

Grant operations of the DAO to assist top talent in establishing rewarding careers in the social
sector:
Any social entrepreneur or non-governmental organisation (NGO) will be able to submit an on-chain
proposal outlining the scope of work, plan, timelines, funding requirements, impact on SDGs, and
other requirements outlined in the application standards. The DAO will review the proposal and either
approve it for funding on a milestone basis or reject it. The project/social entrepreneur will submit
progress updates and can seek additional milestone-based funding.

Concluding remarks
Although we are still in the early stages of DAO culture, if deployed efficiently, they can prove to be
the best platform for solving some of the most difficult human problems by enabling an ecosystem
with the right incentives on a global scale.

Disclaimer – The views presented in the article above solely belong to the writer and are presented here with consent. Images are sourced and used for information purposes only