"Into the Metaverse" is a monthly column exploring all things metaverse and Web3 for marketers.
Much of the hype around Web3 hype is currently focused on NFTs and cryptocurrency. When billions of dollars are made (and lost), something is bound to get noticed.
Less attention, however, is being paid to the rise of Decentralized Autonomous Organizations (DAOs), which are actually the driving force behind the viability of a Web3 future.
Some of the most lucrative NFTs are powered by a DAO structure. So as brands look to launch their own NFTs (like Coca-Cola, Budweiser, Pepsi, Adidas, Robert Mondavi…the list goes on), they need to understand the power of a DAO.
More importantly, the less trendy but equally powerful imperative of “brand purpose,” is becoming intertwined with DAOs in very interesting ways.
DOAs are already massive. Bored Ape Club is a DAO and it is valued at $3 billion (with only 11 full-time employees). The CryptoPunks community treasury is over $2 billion. Friends With Benefits received millions from VC powerhouse a16z because of the power of its community. Each day, brands are being birthed through DAO mechanics: community engagement, co-creation, collective investment, tokenized rewards and decentralized governance.
But perhaps the greatest asset that DAOs promise is a sense of purpose — an oft-used term that is still a hot topic in marketing and advertising. There are three levels to this purpose that provide a potent concoction for success.
The first is “Big P” purpose. This is the grand vision of what web3 promises — a vision that eschews the Big Tech gatekeepers like Google, Facebook and Microsoft. It is the utopian clarion call to build something different, invent a better web playbook and give power (and revenue) to creators, users and participants.
The second is the “medium p” purpose: Every DAO has a mission that’s clearly articulated and promulgated to the community. This is the “why” of any endeavor. When humans coalesce and commune, they rally around a common cause and vision. What are working toward? What does success look like? What is our destination? So many brands and businesses struggle to activate their employees around their purpose. DAOs have no trouble with that.
The third is “small p” purpose. This is the most important one. This one works on an individual level, rather than a communal one. This one answers the “what’s in it for me?” question.
DAOs promise financial windfalls, transformative capital gains and substantial social currency. Other DAOs go deeper; they promise a connection between passion and profit. If you are passionate about soccer, you can be part-owner of a DAO (football.xyz) that wants to buy a soccer team. If you are a basketball fan, the KrauseHouse DAO also wants to own a team. If you love golf, there’s LinksDAO, which is collectively building a new model for golf clubs. It raised $12 million in the first 48 hours after launching by selling 6,000 NFT-based memberships.
The “small p” purpose of DAOs is the promise to help people actualize themselves through their interests, passions and abilities.
There’s so much talk in the marketing and advertising industry around NFTs and crypto. But don’t sleep on DAOs. They are showing the real path brands can find success in the emerging web3 world.
With the added imperative to articulate a purpose, brands would do well to study how DAOs are doing it right.
Max Lenderman is CEO of Mudfarm Ventures and a teacher at Denver Ad School and University of Colorado, Boulder.