#814 Understanding DAOs w/ Yury Lifshits

Yury Lifshits is the Founder & CEO of Superdao, an oppressing system for Decentralized Automated Organizations. In this conversation, Yury walks us through everything related to DAOs. This is a great conversation to help you understand the basics of DAOs and why they are we important. We also discuss what Yury is building at Superdao and where he sees the industry heading in the next decade. ======================= Exodus is leading the world out of the traditional financial system by building beautiful and user-friendly blockchain products. With its focus on design and user experience, Exodus has become one of the most popular and loved cryptocurrency apps. It’s supported on both desktop and mobile, allowing you to sync your wallet across multiple devices so you can have access to your funds anywhere. You can instantly exchange around 100 different cryptocurrencies straight from your wallet. Interactive charts let you view an asset’s price history and your portfolio’s performance over time. And maybe the best part, Exodus is integrated with the Trezor hardware wallet - making advanced security easy for everyone. Visit exodus.com/pomp for your free download or search Exodus on the App Store or Playstore. ======================= Cryptocurrencies offer boundless potential, but how will you protect your crypto? Arculus is the next generation crypto cold storage wallet that combines the world’s strongest security protocols on the Arculus Key Card with an easy-to-use Arculus Wallet App. With over 20 years of experience developing leading-edge secure payment technologies, CompoSecure created Arculus to give you the power to protect your financial future. You can buy, store, swap, send and receive your crypto with a simple tap of your Arculus Key Card to your mobile device. Your private keys are encrypted on the Arculus Key Card and they never leave it. Stay safe from hackers with no cords; no charging; no Bluetooth. The only person accessing your crypto... is you. Buy yours at Get Arculus.com today ======================= Today’s episode is brought to you by Coinbase Wallet, your key to the world of crypto. Crypto wasn’t made to just buy, sell, and hodl. With Coinbase Wallet, you can do so much more: Collect more NFTs, earn more with DeFi, and trade more than 4,000 tokens. Whether you’re looking to play, stake, spend, or just explore a trending new protocol — Coinbase Wallet is your key to more. Long-time HODLers already know that wallets are a must-have if you want complete control of your crypto. That’s why Coinbase Wallet makes self-custody simple, while providing the safety and security of the most trusted name in crypto. Visit coinbase.com/wallet to learn more. ======================= _______________________________

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Yuri Lifshitz is the CEO and founder of SuperDAO. SuperDAO is an operating system for DAOs, decentralized autonomous organizations. In this conversation, we talk about what DAOs are, why they're important, how that space is evolving, what it means to build an operating system to help more people more efficiently actually build and manage DAOs, and also why this is going to become a hot sector in the crypto industry. I really enjoyed this conversation with Yuri, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. Today's episode is brought to you by Exodus, the world's leading desktop, mobile,

• 0:47Anthony Pompliano?

  and hardware crypto wallet. They offer beautiful, user-friendly blockchain products that sync across all of your devices, making it easier to send, receive, and exchange over 150 or more crypto assets in one place. And with world-class customer service available to you 24/7, Exodus always has your back. But the fun doesn't stop with staking and trading. They recently launched a new NFT marketplace where you can buy and sell your favorite NFTs on the Solana network. By partnering with the popular NFT platform, Magic Eater, they're offering the full Monty on Verified Collections, with more added every single day. Ready to check it out for yourself? Run, don't walk. Over to exodus.com/pomp for your free download today. Again, if you want the world's leading desktop, mobile,

• 1:30Anthony Pompliano?

  and hardware crypto wallet, go to exodus.com/pomp today. Today's episode is brought to you by Arculus. Cryptocurrencies offer boundless potential, but how will you protect your crypto? Arculus is the next-generation crypto cold storage wallet that combines the world's strongest security protocols on the Arculus Keycard with an easy-to-use Arculus Wallet app. With over 20 years of experience developing leading-edge secure payment technologies, CompoServe created Arculus to give you the power to protect your financial future. You can buy, store, swap, send, and receive your crypto with a simple tap of your Arculus Keycard to your mobile device. Your private keys are encrypted on the Arculus Keycard, and they Never leave it. Stay safe from hackers with no cords, no charging, no Bluetooth.

• 2:14Anthony Pompliano?

  The only person accessing your crypto is you. Buy yours today at getarculus.com. Today's episode is brought to you by Coinbase Wallet, your key to the world of crypto. Crypto wasn't made to just buy, sell, and hold. With Coinbase Wallet, you can do so much more. You can collect more NFTs, earn more with DeFi, and trade more than 4,000 tokens. Whether you're looking to play, stake, spend, or just explore a trending new protocol, Coinbase Wallet is your key to more. Longtime holders already know that wallets are a must-have if you want complete control of your crypto. That's why Coinbase Wallet makes self-custody simple while providing the safety and security of the most trusted name in crypto. Visit coinbase.com/wallet to learn more. Again, coinbase.com/wallet to learn more.

• 3:00Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:23Anthony Pompliano?

  Let's just start real basic. What the hell is a DAO? What everyone is excited about DAOs. You're going to give me an education here. What is a DAO?

• 3:30Speaker 02

  Yeah, so there is actually two definitions. There was an old one and a new one. The old one is decentralized autonomous organization. That means something that is on a blockchain, uses smart contract instead of bylaws, but describes how everything works. And that smart contract overrides any human decisions. So called trumps kind of human relationship. And it's also decentralized. That means, you know, no one controls it. People have just tokens in it and whatnot. So now there is a much more broad definition, which is basically as long as you use blockchain as a system of record of ownership, it can be adopted. So it can be centralized and it can have human governance versus smart contract governance. So right now it's basically...

• 4:14Speaker 02

  Any blockchain company is a DAO. Got it. And so when you think about this new version, like what's changed from the old version in terms of how you think about DAOs today? The, you know, hundred times more people got excited about, you know, starting a DAO. And not all of them want to have it decentralized from day one. Not all of them want to have it like fully governed by smart contracts. And what people are excited about is, one is fast path to liquidity. So not waiting seven years to go to NASDAQ, but instead going to Uniswap or, you know, being traded on Coinbase or FTX. And the ability to be outside of national borders, bring people together as contributors and team members,

• 4:56Speaker 02

  kind of simplified employment or alternative employment or like the role of contributor instead of the employee. And also investor interest. So there is a lot of investment capital available for DAOs or projects who looks like DAOs for who eventually going towards token based liquidity and not public stock market based liquidity. And so because there's so much money flying around and the valuations for DAOs are basically 10x what they are for traditional startups. And like every smart person I know was thinking very hard, why am I not starting a DAO if those projects at the same level of traction are valued 10 times higher? All right. So let's talk about like what happens in a DAO, right? If I joined a DAO today, like what would I do? Do I just hang out on Discord all day? Or what do I do?

• 5:42Speaker 02

  Yeah, there are four things. One is governance. So you can make decisions, vote on things. There might be like elections. So you can vote for individual roles like treasure. You can decide on funding allocation, like grant making, things like that. So governance is one. Number two is shared asset ownership. So you just can own things together. So you can own real estate together or tokens or NFT art or physical art or wallets or like, you know, venture, venture equity, whatever. Number three would be a token gated content. It's kind of, you know, anything that is for members only. So if you're, if you're part of that, you can go to private events, physical, online, read private information,

• 6:23Speaker 02

  have access to private deal flow. And let's see, so governance, content. Yeah. And the fourth one is just building things together. So it can be, you know, a service DAO, like DAO that actually builds the product together. So you actually, you know, write code, design things, build the virtual universe, like

• 6:43Speaker 02

  Diverse cities together, things like that. Got it. Now talk about regulations. Is this legal? Like, how's this work? And does the US treat it differently than international? Or how do you look at that? Yeah, three things are legal. The fourth thing is questionable. So the following things are legal. One is selling NFT memberships that clearly represent utility. So if you have like a social club where it's like, you know, everyone who has an NFT can go to the concert and read the private folder with like cool investment opportunities on the you guys that seem privately. That's legal because it's an NFT, they have access to content and deal flow, but it doesn't have the expectation of rising in price. So it can be a tradable NFT, but you're not promising anyone that it will go like 10x or whatever. So utility-based, utility-oriented NFT memberships are legal.

• 7:29Speaker 02

  Then the second thing that is legal is raising through promises of future tokens from private accredited investors. So if you create like, you know, traditional delivery corp with token warrants or soft promises of future tokens and you go only to, you know, funds like Andreessen Horowitz, it's again, it's legal because the investment, it's a private transaction, so you're not publicly promoted. Yeah, it can be seen as a security, who knows? But it's a private transaction with accredited investors. So even if it is a security, you're still in the clear. The other thing is you can also give NFTs for core early contributors. Again, if it's just one NFT contributor, more like, you know, VIP tier kind of founding member.

• 8:13Speaker 02

  And again, utility-oriented kind of NFT-based not say compensation, it's more like, you know, it's like giving, you know, when you build a university and they put the name of a donor on the building. So that's kind of okay. And then another thing is okay is giving also private token, non-tradable, non-transferable locked tokens to early employees. And maybe a participant on your marketplace, if you're building like a marketplace. So this is all legal. The final step, which is, you know, token liquidity, when you put the token on exchange, either decentralized like Uniswap or centralized like Coinbase, and say, hey, now you can trade for the token. That's a big question mark. By that time. And most new DAOs, they delay that for, you know, anywhere between six months and three years.

• 8:57Speaker 02

  Uh, it can be perceived as a security and then, but by that time you have so much liquidity, uh, sorry, utility built in. So you, you provide for token holders, some sort of utility as well. So if you feel like you're ninety percent utility by that time, you probably can risk even like being present in the United States. Other than that, you, yeah, you exclude the United States when your token becomes publicly traded on exchanges and say, yeah, we don't know if it's security, utility or both, but just to be safe, we just exclude you. Yes. But only, only the last step you need to include, yes, when you have this publicly traded. Got it. And then talk to me about how somebody goes through actually launching one of these things. Is it just like you click a couple of buttons and all of a sudden you got a DAO? Or is it similar to setting up like a corporation or like, how, how does this work?

• 9:38Speaker 02

  Yeah. So basically you need two pieces. One is smart contract and second is interface. So a smart contract is a code on the blockchain that describes in a programming language, uh, how your organization works. So like who has the NFTs or tokens, who has the rights, who can make decisions? Can this contract be upgraded? Uh, who can make changes? Can you, uh, print more NFTs or extra, uh, tokens? And, uh, if you, uh, do you own any wallets? Do you have any agreements with off-chain entities? Things like that. So basically it's a smart contract. It contains the, the regulation for your entities, similar to bylaws. It's similar to what you file in Delaware, but it is written in a programming language, not in a English language. Now, the second part is all kinds of interfaces.

• 10:21Speaker 02

  So interface is, um, basically a way for a human to, number one, uh, you know, generate a smart contract and deploy it on the blockchain. Number two, see who the members are or, you know, send information to them as a kind of investor updates. So, you know, NFT holder update, token update, uh, you can, uh, see all your wallets, kind of treasury dashboard, uh, and things, things like that. Yeah, you can connect this court. You can also make this court only available for the token holders or NFT holder, something like that. So essentially you can think one smart contract and there are many operating, uh, interfaces that can interact with, with a smart contract. Kind of basically checking, hey, who are the current members of the DAOs? What privileges do they have? What roles, tiers and so on. So. I'm actually a founder of a company called SuperDAO and we help with both.

• 11:06Speaker 02

  So we help for new DAOs to generate their smart contract. And we also provide out of the gate kind of building interface for a member directory and newsfeed, treasury dashboard and task board, which is kind of job board for your DAO. But our smart contracts are on a chain, you know, very clear kind of standard. So the other apps and interfaces can interact with our smart contracts as well. Got it. And so when you think about this, help me understand in terms of like, what's an example of a DAO that you're like, yeah, they're doing things the right way. That one seems to be working and is successful. Yeah, so there are two generations of DAOs. There is what we call classic DAOs and modern DAOs. The classic DAOs were all for crypto native kind of insiders of crypto economy.

• 11:50Speaker 02

  So they were for DeFi and protocols. So those are, you know, DAOs that manage any, any, any protocol or DeFi project. I would say one inch or threshold network have a very functional DAOs with very clear management system and so on. And the modern DAOs, the DAOs that are more like maybe centralized at the start and decentralized over time. And have called some, you know, off-chain assets together, things like that. So this, so many, so many, so many verticals. There are investment DAOs like Blizzard DAO, flaminga DAO, the Lao. There are property DAOs that own big property together or aspire to own big property together. Like, you know, Constitution DAO that everyone's heard of, but also Kraus House

• 12:36Speaker 02

  that aspire to own an NBA team and Links DAO that wants to own a golf course and many others. There's upcoming Ski DAO that wants, you know, own skiing slopes and things like that. And then another one is learning DAOs. There are people, it's more like a membership club where people come together to learn more about things. And they basically buy NFT to have access to this shared learning experience. Things like Odyssey and Invisible College, there are a few more. And then another category would be almost like the reinvention of union or freelancer guild. Kind of people get together and brand themselves as very special profession, professionals in their. Field and then say, hey, come to our DAO and we'll find an individual contributor who can work for your project. So they kind of do a talent representation in a way.

• 13:21Speaker 02

  So there are vector DAO for designers and there is developer DAO for developers. And there is also upcoming DAO for salespeople. Got it. And then when you start to think about something like governance, one thing that I always go back to is if there's a hundred thousand people trying to make decisions, usually no decision gets made, right? And like, and like kind of the legacy world without DAOs, et cetera. How do you think about whether you can technically coordinate a hundred thousand people to make a decision or not? Like, is that good for an organization? Is there trade offs that you think about in terms of democratization of decision making versus the downside? What do you think there? Yeah, yeah, there are so many lessons in history that can be reapplied for those. So first of all, like, let's look at the national governance system.

• 14:03Speaker 02

  So we had, you know, absolute dictatorship and then we have, you know, monarchy or constitutional monarchy. And then we have, you know, parliamentary republic and then we have, you know, a direct democracy with elected president and so on. So the same can be in the DAO. So you can elect the executive director, you can elect representatives, you can vote for individual roles. You can vote for annual budget. You can delegate your vote to other people to vote on your behalf called liquid democracy. So all kinds of schemes are available because it's very programmable governance system. And much more even programmable than, you know, real world. So I think we will start with copying a lot of stuff that was in politics and then we'll go even beyond that.

• 14:47Speaker 02

  So the thing that on a practical level, the things that we've seen are number one is a limit. Community governance do decision, decision based governance, not proposal based governance. So proposal based, that means, you know, anyone can write any kind of proposal, people vote and then it's, you know, a DAO has to follow. That's too much and maybe probably too much, as you said, that may be too chaotic and too powerful for most DAOs, not for all. And then what people do instead is they, they, they specify the specific type of decision that can be made. Like, hey, it's an investment DAO, we just vote on deals. Do we want to invest in this deal? Do we want, like, let's say it's a forum DAO and people can vote on next speaker to go live on your show. And they can only approve or disapprove the speakers and that's, that's the limit of their power. And maybe I'll get voted out of. Stage tomorrow.

• 15:32Speaker 02

  Yeah, you can maybe, maybe you pick the speakers and like if people vote against them, you have to immediately take them off air or something. Yeah. I don't know. Is your So, yeah. Is your thought process that every organization could be a DAO or will become a DAO over time? Or is it just for specific types of organizations? Yeah, so if you use this broad, modern definition of a DAO, which is basically any on-chain organization that that doing something on-chain with money together. Then I would say everyone will be a DAO, like there will be no exception, but 100% of organizations will be DAO. Because as simple of a thing as like owning a wallet for a business is basically make you a DAO. Because now there is a single wallet that owns by your organization. So you're you are on-chain organization because you have on-chain assets.

• 16:15Speaker 02

  So if you start paying money out of it for, you know, crypto freelancers or, you know, holding more tokens because you use them to spend for, you know, gas fees and whatnot. You're on-chain organization. So you're kind of a DAO. So basically you can be a DAO without a DAO-style governance. Because you have a DAO-style asset management, or you have a DAO-style employment, or you have a DAO-style private resource sharing. Yeah, it's fascinating when you start to think about how this plays out. And so in terms of right now, in the United States, people have to sell these in the private market to accredited investors. And then, once it becomes liquidly traded, they're supposed to block out US investors.

• 16:54Speaker 02

  Is that going to hamper kind of the success of of some of these assets or these, you know, DAOs as we move forward? Yeah, so essentially, I think what happens is that more DAOs are getting created. They eventually become, yeah, reached to the point when they have a publicly traded token, let's say primarily outside of the United States. And then they're under pressure to maybe move most of the operations outside of the United States or things like that. And eventually it creates a pressure against the, you know, governing bodies of the United States to consider whether you continue to outlaw publicly traded DAOs or you create some sort of meaningful regulation.

• 17:36Speaker 02

  So essentially, maybe you create a new concept which is not the same. As publicly traded securities on NASDAQ, you create a subclass, I don't know, call it crypto asset or crypto security or crypto something crypto equity, I don't know. To create a new subclass of things and you're regulated, but not as tightly or a little bit more flexibly than traditional equity. And therefore you kind of legalize DAOs back in the United States. So the hope is basically for scenarios similar to Uber and Airbnb. So I think the the the heart of the security law is to protect the retail investors. So protect retail investors who might be a little less educated on the matters and might be victim to, you know, too aggressive over marketing of DAO style securities.

• 18:21Speaker 02

  So the question is, can DAOs be traded while still protect the interest of retail investors? And I hope the the solution can be found. The problem though is the United States is under no pressure to do it soon. So because of that, basically DAOs getting traded primarily outside of US for now. But as more and more of DAOs created, the total volume of, you know, DAO equity grows. There would be eventually more reason for the United States to legalize rather than continue to outlaw.

• 18:49Speaker 03

  John, what questions you got? Hey Yuri, thanks for joining us. My question is around just what are the financial incentives for people to join a DAO besides the governance part of it?

• 18:59Speaker 02

  Yeah, so what kind of utility the DAO can give to to to members? So let's see, so typically a few things. One is governance, number two is access. So access to private events, private content, deal flow, ability to go on a opening night to an NBA team owned by a DAO, kind of VIP tickets, some kind of private lounge type of stuff. Number three would be, let's see, access, governance, and then services of a DAO. So every DAO has services, like, not every, but many DAOs. So if it's a DAO building, you know, a hotel, you know, using the, you know, staying at the hotel.

• 19:40Speaker 02

  If it's a, if it's a NBA franchise, go in, if it is a golf course, go in, play golf. So basically access to to the services that DAO provides. That's very special for individual DAOs. It's a learning DAO, like taking classes from that DAO, so and so on. And then, yeah, I guess those three kind of primary services, content, governance. Yeah. And then what are the different ways to show your participation in a DAO? Yeah, so we're definitely heading to a thing people call on-chain resume. So essentially, very much like your wallet currently holds the NFTs you own, it will hold the DAOs you're part of, as well as special role or level or tier you have there.

• 20:23Speaker 02

  So essentially, and that would be on-chain, hopefully, shared standard across all the services. So if someone participates in 10 DAOs, in SuperDAO, my company, and then in 5 DAOs, you know, formed elsewhere, and then, you know, start their own DAO and so on, they can have on-chain the resume that contains all those achievements in one. It's kind of distributed LinkedIn in a way. Yuri, explain SuperDAO in terms of building the infrastructure. Is your thought process that you can basically make it with a couple of clicks? Somebody can create it, somebody can manage it, could shut it down, do whatever they want in terms of the infrastructure you're building? I absolutely love the question about shutting it down. You're like, I really love that because that's a part of our roadmap. And I think I have not met yet another DAO company, DAO formation company, that thinks about this solution. I think it's very important.

• 21:09Speaker 02

  So in simplest terms, we're Shopify for DAOs. Like Shopify made it easy to start an online store. We make it easy to start a DAO. We help with two parts. The first part is smart contracts. So it's basically writing the regulation and description of your DAO on-chain. So where basically it's a code that describes, are you having membership that's based on NFTs? Or is it based on token or both? Who can get the tokens and NFTs? How many? Who can override or extend, expand the smart contract? Is there governance system in place or not just yet? Is there shared assets like wallets and off-chain property? Are there any agreements with third-party vendors or representation outside and so on? So we help any DAO to form a smart contract. We do it two ways. One is kind of more manual.

• 21:54Speaker 02

  It's like, you know, you call me, like, Telegram me, whatever. So we start working that. Number two, eventually there will be a bunch of dropdown kind of forms. We'll just click a bunch of checkboxes and we generate a smart contract. Based on the needs. Uh, number two is we give interface. Yeah. So our uh operating system operating interface from SuperDAO has four major parts, which and uh member directory, treasury dashboard, uh news feed and dashboard. So those are the four primary things that we need to basically employ people, see the assets that you have, inform people about the new stuff and deliver content as well as uh see who else is in DAO. Uh, but uh we're also like uh like eventually building a kind of app store for DAO extension.

• 22:36Speaker 02

  So bringing more DAO tooling in the system so that, you know, DAO creators can use third-party tools as well. Got it. If you look out over the next 10 years, what what's your kind of best hope for DAOs in terms of like what this grows into? Yeah, I would say let's employ 100 million people. So let's more people work for DAOs. Let's all these smart kids work for DAOs. Because in DAOs, you can be anonymous. In DAOs, you can work for 10,000 parallel. In DAOs, you can work for one DAO for one week and here in three weeks and here what. And you can do like, you know, you do the grant application here, you did successfully. Now you're in the core team. Now in the three core teams. Now you have an agency that, you know, serves other DAOs. So kind of faster careers. I want more economic opportunities globally.

• 23:17Speaker 02

  So more, you know, kids from all kinds of countries to participate in DAO economy. I want DAO ecosystem to be more compliant and more kind of meeting halfway. So regulation adapting to DAOs and DAOs adapting to regulation. So I think we need new legal language very much like with gig economy. Hopefully in a more friendly way for both parts because I think there are a lot of questions, question marks about, you know, regulation of gig economy. Uh, yeah, uh, I want to see a million DAOs. Uh, so the mission of SuperDAO is help launch a million DAOs. I love it. Where can we send people to find you on the internet or find out more about SuperDAO? Yeah, so Twitter is the best. So SuperDAO underscore CEO or my personal URL assets in in one word.

• 23:57Speaker 02

  Uh, uh, yeah, follow us on Twitter. We we we also host a bunch of private workshops like helping creators to figure out how to plan their specific DAOs. Just DM me for more details. Amazing. Thank you so much for taking the time to do this. I feel like people have no clue what DAOs are. So this is super helpful. Thanks for you to helping us educate more people and bring more people to DAO economy. You got it, man. All right. Talk soon. Thanks, Yuri. Thank you. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com.

• 24:40Speaker 02

  We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.