Gaby Goldberg: Web 3 and DAOs
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Episode Summary
Web 3 has become the canonical term to describe new internet products that are decentralized, user owned, and orchestrated with tokens. It is compared to web 1 where the internet was user owned, but highly technical and not user-friendly and web 2 which formed centralized, and eventually extractive platforms that offered consumer friendly experiences and enabled billions of people to access the internet.
In this episode, Gaby helps us understand the emerging social behaviors and products that are being created within the web 3 paradigm and why they are better solutions to today’s socialization needs.
As a Gen Z who grew up on the internet, Gaby has noticed that generally the people she meets online have been more values aligned than people she has formed relationships with in the real world. She attributes this to people online caring more about what she has to say and forming connections with intent, rather than just circumstance, which is typical for forming relationships irl (in real life).
Given more positive relationships and experiences are now developed online first, social products in web 3 are trying to create products that feel native to online. This is compared to social apps like FB or IG of the web 2 realm where products were purpose built to share your irl experiences with your friends from the offline world, online.
While some web 3 social behaviors like the obsession with buying NFT avatars like Bored Ape Yacht Club and displaying it as your Twitter handle might seem bizarre, Gaby urges us to consider that the social value systems that drive these behaviors are not new. Affiliation with cool groups and creating a sense of exclusivity has always been a core social tendency. Moreover, spending a ton of money and time buying and applying cosmetic changes to one’s digital avatars (which is now ~$40B industry) is akin to beauty and cosmetics irl.
DAOs have become the primary social organizing entity within web 3. Gaby describes it as basically a group chat with a shared bank account. As a member of a DAO, you own tokens to that community, and therefore fractional ownership of the group and ‘skin in the game’. You have liquidity so you can leave the DAO as soon as you sell your tokens.
Where DAOs innovate is its optionality, transparency and fair decision making. There have also been really incredible examples of DAOs efficiently mobilizing towards initiatives at unprecedented rates. PartyDAO created PartyBid, a product that helps co-invest in NFTs, within a weekend. ConstitutionDAO, an investing collective, mobilized enough crowdsourced capital to bid for the US Constitution at a Sotheby’s auction.
There are still many shortcomings to DAOs. One area of improvement is around creating equality and fair access to social tokens, currently those with capital can join groups, but those without are excluded. Another is the technological stack to support DAOs, most still rely on web 2 products like Discord and Clubhouse to communicate but they are messy and overwhelming for people. Finally, the onboarding process could be improved. Many people join DAOs only to be completely perplexed about what they should be doing and how they can contribute.
About the Guest
Gaby Goldberg is an investor at TCG Crypto, where she focuses on the firm's investments at the intersection of consumer and crypto. She previously invested in early-stage consumer and internet businesses at Bessemer Venture Partners and Chapter One. Gaby writes regularly about culture, identity, and ownership in web3 at https://gaby.mirror.xyz.
Show Notes
[3:50] Shortcomings of social products in the web 2 era
[5:05] How online relationships look like today
[8:50] Why online social behaviors emerge from same core motivators as offline
[10:50] Key characteristics of web 1, web 2 and web 3
[15:40] Is web 3 really better?
[20:00] DAO explainer, successful examples and existing shortcomings
[23:05] Canonical technology stack of DAOs
[27:40] Positive outcomes that have come out of DAOs
[30:40] The social token paradox