(2021-10-24) Read Why Your Group Chat Could Be Worth Millions

Max Read: Why Your Group Chat Could Be Worth Millions. Andreessen Horowitz has invested $5 million in a group chat. Friends With Benefits, which describes itself as “the ultimate cultural membership powered by a community of our favorite Web 3 artists, operators, and thinkers bound together by shared values and shared incentives.” While it may be that, in practice it’s mostly a chatroom on the app Discord, populated by around 1,500 crypto enthusiasts, artists, NFT collectors, and various hangers-on.

is something more than a group chat: It’s also a DAO.

To the true believers, DAOs are the institutional building blocks of “Web 3,” the blockchain-grounded decentralized utopia promoted as the future of the internet

If you really buy into it, though — if you’re steeped in the ultra-positive, hyper-utopian, get-rich-quick culture of Web 3 as it flourishes across Twitter and Discord — you’re not just looking to change the web. Sure, the future of privacy, finance, art, that’s all nice. But as DAO evangelist Tracheopteryxs recently told CoinDesk: “DAOs are a bet on the future of human organization itself.”

A running, self-deprecating joke among enthusiasts holds that a DAO is just a group chat with a bank account — which, for practical purposes, is about right. But it’s also a little bit joint-stock corporation, a little bit cryptocurrency, a little bit gamer clan, a little bit message board, a little bit multilevel-marketing scheme.

To join Friends With Benefits, you can buy FWB tokens with ether (or another cryptocurrency of your choice). As with any other crypto, those tokens can ultimately be sold on to any willing buyers. Around a third of the million FWB tokens is, at the moment, retained in a community treasury, to be distributed according to the wishes of the DAO, with a set number disbursed every few months to members, based on contributions like providing liquidity or serving on committees.

There are DAOs devoted to helping other DAOs with technical problems. You can imagine (and many have) a journalism DAO, where writers or subscribers are token-holders who could vote on, say, magazine covers, or assignments.

And Friends With Benefits? What does it do? Well, it hosts events (Diplo came to a party thrown during the bitcoin conference in Miami in June) and publishes a newsletter, but right now, more than anything else, it’s a group chat in a Discord chatroom

arguably the genius of Friends With Benefits is its recognition that, at least right now, a DAO doesn’t really have to do much of anything at all. If it’s cool and exclusive — and if its members promote its coolness and exclusivity — demand for tokens will rise.

Squint one way, and it sort of looks like Soho House, if it were structured like a frequent flyer program and run like an anarchist squat co-op. Squint another way it’s a cool kid’s clubhouse re-imagined as a MLM. After all: Pyramid schemes align incentives pretty well, too.

The real utopian hope for DAOs is not necessarily in what they do, anyway, but what they promise: ownership.

You can imagine a DAO where tokens are distributed based on contributions to a company or platform

“Ownership” is a powerful concept to people who contribute enormous value to internet properties without seeing much in the way of compensation.

But creating more equitable ownership structures doesn’t necessarily translate to more democratic control, or a better end product.

Megaplatforms are most useful and effective when they’re reliable and widespread. Platforms that rise and fall on the movements of a token market are anything but.

very little legal or regulatory work has been done to clarify what, exactly, they are in the eyes of the government

The current mania for DAOs emerges from the colorful froth around NFTs, the tradable digital assets whose market has exploded over the last year off the backs of bored young gamers, sneakerheads, day traders, and others prone to gambling. Newly minted and would-be crypto millionaires looking for new bets or places to stick their bulging ethereum wallets are naturally attracted to DAOs, whose exclusivity and premium on early adoption can offer the same kind of social cachet as the scene’s ubiquitous and expensive NFT Twitter avatars, called PFPs

Dapper Labs, a major player in the NFT world, recently purchased FWB founder McFedries’s start-up, Brud; McFedries will lead a team focused on DAOs.

The scene around Web 3 and DAOs certainly claims a set of political commitments — to sovereignty, ownership, and decentralization — but in place of constitutional mistrust and skepticism is a bubbly, earnest, exhaustingly enthusiastic sociability.

If you’re a young person (the world of DAOs skews young, for obvious reasons), sick of culture-war stalemate and alienated by the dominant social platforms online, why wouldn’t you be drawn toward an endlessly upbeat community like this, promising you both vast wealth and positive change? Especially if that community is able to provide you some kind of socially valuable exclusive membership?

But for all the promises of social revolution, the basic rhetoric of the DAO movement is extremely familiar: It’s a merger of Silicon Valley’s techno-optimism, televangelists’ prosperity gospel, and your high-school classmate’s Facebook posts about Herbalife.