A DAO is a Decentralised Autonomous Organisation that is congruent with and inextricable from the rise of cryptocurrency and NFTs. These terms have been around for a while and the discussion of DAO as a ‘new idea’ has plateaued, but the format seems to be holding the interest of the art world.
To participate in a DAO you have to literally and intellectually buy-in to the crypto world of coins or tokens, wallets, and what appears to be an unregulated marketplace. But for some, decentralised organisation is the appeal.
A DAO is a community lead entity with no central leadership encoded on a blockchain. They can accept funding from anyone, anywhere, and members can decide how to spend the money by voting. A DAO aspires to be global and public with a voting system that means changes come from a collective will rather than sole party, but it is possible to purchase tokens which can ascribe voting power. Traditional companies have a hierarchy of executives, a board of directors, and investors who are usually operating privately, not always globally, and are answerable to government.
So what is the value when DAOs meet Art? There are examples of value being promised from the model, and value is subjective.
Jordan Huelskamp’s SalonDAO, says it aims for ‘a community-driven model to assemble a heritage collection for the digital age.’ Salon comprises 100 members and as they state in their white paper ‘Members are positioned to gain financial returns in Salon as the price of their units increase in value.’ Another example is HOFA.io based in London but existing in the digital space. Some are sceptical of the commercial potential of the format, as Brian Frye, a law professor at the University of Kentucky, told Artnet News, ‘Getting artworks for less than market value means tokenizing access to a dealer’s network, thereby diluting the dealer’s own shares in what is essentially a one-person operation.’
Others value DAO as an opportunity for activism. As reported by The Art Newspaper, the group UnicornDAO combines art collecting with a social initiative. UnicornDao was co-founded by Pussy Riot’s Nadya Tolokonnikova, Rebecca Lamis and others. They state their mission ‘is redistributing wealth and visibility in order to create equality for women-identified and lgbtq+ people.’
You could say the internet has been a democratising force for freedom of information, but it is not without its faults such as misinformation, copyright theft, and so on. You could also say that cryptocurrencies, NFTs, the metaverse and now DAOs present another opportunity, for connecting creators to consumers. As with anything there are pros and cons to consider.
DAO’s intentions have been labelled as a peer-to-peer network where capital can flow from art lovers to artists with greater transparency. If you are an artist selling work to a DAO or a collector participating in the model we’d be interested to hear from you!