We will witness an NFT (non-fungible tokens) summer in 2021, the founders of nfDAO working on upcoming and under-funded NFT projects believe. And while in the long-term, it will make a lot of sense, at the beginning, things might seem shady.
Remember the ladies from the world’s first female-led decentralized autonomous organization (DAO)? They believe that eliminating hierarchy could lead the world towards more sustainable and democratic development and empower women globally.
Ben Lakoff, a co-founder of two DAO’s - nfDAO and Charged Particles DAO - is a believer, too.
“The future is organized by DAOs. In the long term, I think, it will make a lot of sense,” he told CyberNews.
DAO is a blockchain-based system that allows people to run an organization by ceasing the concentration of power in the hands of the leadership. This is done by giving every employee a voice in the decision-making process and only allowing approval based on a majority vote.
In DAO, its members vote on where to allocate crypto assets. It could be a non-profit cause or projects and investments with a promise of high returns. At the moment, most DAOs are in a nascent stage, figuring out the best way to keep the organization alive and where to allocate crypto funds.
Game-changing NFT projects
nfDAO, as its founders claim, was created to support potential game-changing NFT projects. According to Lakoff, many people are now trying to innovate with NFTs and push the boundaries of perception of what NFT can and cannot be. NFTs can represent nearly anything in the virtual world, not just art, and they can be tied to real-world assets, such as real estate.
"With the explosion of global gaming, crypto markets, and DeFi (decentralized finance) protocols appealing to more people around the world in 2020, it is exceptionally good timing for the NFT space, and we will witness an NFT Summer in 2021, similar to 2020's2020's DeFi Summer," nfDAO founders claim.
As mentioned above, this particular DAO is designed to support building the NFT ecosystem through the funding of different projects.
In May, nfDAO gave a grant of $1K to a Prison Art Project. Its creators claim that some of the best art, music, and ink come from isolation in prison. The Prison Art Project of the Americas is an in-prison Creator Work Release program where inmates' art and music are digitally minted and sold on the blockchain (NFT). NFT sales should pay the financial debts of the artists, allowing them to be debt-free upon release.
In June, the Korean NFT project got funding from nfDAO. A visual artist in Los Angeles, Donglee Han, presented a website to spotlight artists in Korea. "I am dedicated to breaking the language barrier for these artists to be a part of the larger international NFT community," its founder said.
"nfDAO is a grant giving DAO. It's a way to give back and encourage NFT projects and the ecosystem to develop and grow. There is no profit-seeking motive at the moment, but being a member of the DAO, you are a member of this club that is giving money to projects. Potentially, these projects could give shares back, could give some sort of token of appreciation back to the DAO, and those, of course, would be split amongst the members," Lakoff said.
Lakoff believes that the future is organized by DAO, and it will make a lot of sense in the long term. In the short to medium term, however, there are issues to take into account. For example, DAOs currently face high gas fees, which subsequently create problems with on-chain voting, community decision-making, and anything else that needs user engagement. This leads to loss of interest, new members being priced out of participation, and communities ceasing to function.
"People are still figuring out how this works most efficiently, how things make sense, and we are still very much figuring out the best way for all these things. This is a lot of it. The future is organized by DAOs. In the long term, I think it will make a lot of sense. In short to medium term, it's murky, and there will be learnings along the way," Lakoff said when asked whether DAO structure is good for business decisions and revenue generation.
He said he is a lot more involved with his other DAO at the moment - Charged Particles.
"In terms of pushing the limits of NFTs, Charged Particles is very much doing that. It's a protocol that allows you to take your NFT and deposit tokens inside of it. The real power when thinking about NFTs is something more than art, as financial products, like in-game items, and many other things. With Charged Particles, we are very much actively encouraging people to push the limits of NFTs," he explained.
Even though he believes in decentralization, it does not make much sense to be fully decentralized from the beginning and do it gradually instead.
"I don't think it makes sense to go DAO right from the beginning. There needs to be this path of progressive decentralization where you have more involvement early on, and you slowly move towards this next goal of "oh my gosh, we are going to be fully decentralized, and the community is involved in every decision," Lakoff said.
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