1:52BYeah.
1:52AAnd can you just share with people tuning in what a decentralized autonomous organization is?
2:00BYeah, we can break it down one by one. It’s, it’s an organization. So, you know, a collection of actors, people, Who who all work together? It’s autonomous, meaning that you don’t need an intermediary or some sort of some sort of overseer in order to facilitate you know that the orchestra of work that happens. Everything is autonomous, meaning everything exists in code. is maintained and, you know, all of the code necessary for the organization to maintain itself, upgrade itself, iterate through development, all of it is there. And then decentralized refers to the fact that there is no geographical central location where all of this has to happen. So unlike, you know, you got people who work Apple HQ, you know, everybody, every, every, everybody is, or not everybody, but the majority of the people who work for Apple are centralized to that area, you know, or there’s plenty of other examples. But yeah, essentially a decentralized autonomous organization is a business that, that can be managed by its owners. And its owners don’t need any intermediary, you know, intervening in order to facilitate the management of that organization. It can be done completely autonomously.
3:44AIt’s also, or at least my understanding is, it’s very democratic with the either users or participants in a DAO being able to vote on various propositions or changes.
4:00BYep.
4:01AAnd so how does that process work in a typical DAO versus personal DAO?
4:08BIt’s pretty much the same across the board. You know, that’s, that’s a standard within decentralized autonomous organizations. Any changes to the code that, that, you know, that the software product consists of, any changes to that code must undergo a proposal. Any member of that decentralized autonomous organization is able to submit a proposal. From that point on, everybody votes on the proposal, all of the, the other members, and majority rules. So if 51% vote to adopt the proposal, then it’s adopted. If 51% vote to reject the proposal, then it’s rejected. Now, to become a member, in most cases it’s permissionless. All you have to do is purchase the token and then stake that token, and you can do that without having to get permission from any, any overseer.
4:08BIn the case of Personal DAO, The difference there is that it’s not permissionless. It’s a gated DAO, meaning anybody who wants to be a part of that organization, they have to receive approval by the governing, the governing body of that organization, the members of that organization, of that personal DAO, and then once the members of their personal DAO say, hey, yes, you can be a part of it. You know, from that point on, they get to be a part of it, which is necessary in many use cases. There are a lot of communities who need to be able to manage things amongst themselves. So think about people who are geographically bound to a specific area, and they want to maintenance a piece of code that services their specific geographical area.
4:08BYou don’t want somebody from the other side of the world who is of a completely different, you know, environment than you to be able to come in without permission and be able to influence the organization that you all depend on for you all’s specific use case. So for that reason, I made the decision to make it a gated DAO. so that small communities can create these exclusive organizations that are specific to them, whatever common trait that they share, whether it’s a geographical trait or whether it’s a common interest, whatever the case may be. I would say that’s the difference. Other than that, You know, it’s pretty identical to most other ones.
7:07AComing back to this concept of Personal DAO, it is essentially a customizable DAO product that is gated. And what are some of the features that I’m not talking about or I’ve left out? And also, what sets Personal DAO apart from other DAO projects out there?
7:31BOne of the characteristics that is specific to Personal DAO is that these are -- it’s a turnkey DAO that’s meant to be deployed to the internet in multiple replicas, multiple instances. And by that, I mean, for every community that wants one, they get their own DAO. Now, as far as appearances go, if I got -- if I have my own DAO for my community and you have one for your community, As far as appearances go, they appear the same and they function the same. The difference is that those are 2 different digital entities. You know, mine would have one URL that you would visit. Yours would have a different one.
7:31BMine would have, you know, all of the data that is, you know, populated within that DAO. It will be saved to its own database. It has its own treasury. And then yours has -- you would have your own database and your own treasury. So although they would look the same, they would be 2 completely separate entities. And so think of it kind of like a, for lack of a better term, a little bit like a franchise. You can have 2 different McDonald’s. If one is hit by a meteor, the other one is completely intact. Same with PersonalDAO. If one PersonalDAO is hit with whatever the digital equivalent of a meteor is, the rest of them are completely intact.
7:31BAnd that’s by design. What that architecture does is it enables, it enables more resilience for the ecosystem that we intend to build. Other DAO products, they’re typically just one. Everybody goes to the same URL. Everybody’s data is stored in the, you know, in the same database. And what that does is it creates a huge honeypot that becomes extremely attractive to bad actors. And so what ends up happening is you get these huge hacks. Wormhole is an example. There was just a hack that affected a few projects in the ICP ecosystem. That’s what we aim to avoid. We don’t want to, you know, we don’t want to create something that has these vulnerabilities where, you know, essentially the bigger it gets and the more popular it gets, the more attractive it is to steal from it.
7:31BThat’s what we aim to avoid. Rather than creating something with that architecture, we chose to go a different route where no single actor could cripple the ecosystem as a whole. Maybe, you know, it’s, you know, if at worst case scenario, you know, if, if one were to be breached, through some form or fashion or another, it wouldn’t affect the rest of them that’s in the ecosystem. And so having, having that kind of resilience in an ecosystem is necessary if it’s going to grow, if it’s going to survive the attacks that will come, whether it be from government regimes, it may, it could come from, you know, like I said, bad actors, black hat hackers, hackers, it could come from non-hackers who just, who just want to, uh, who have enough money to, uh, conduct, carry out a 51% attack.
7:31BThese are the things that we want to be able to guard against. And the best way to guard against it isn’t by building, um, a single big door, uh, as in a case, you know, a big door with a big lock on it.
11:27ARight.
11:28BUh, the best way to guard against it is by putting more doors in place so that if someone is successful at, you know, picking one of the locks, they still have plenty more that they have to get through, right?
11:44ASo, so no one single point of failure.
11:48BExactly. That’s, that’s the theme. That’s the theme here. No single point of failure. Decentralization, right? That’s the goal.
11:56AAnd I think there’s some other features that Personal DAO is going to be embarking on as you’re moving past the testing phases. So what are some of those features that users can look forward to?
12:12BSo thus far, I’ve described some of the characteristics. I wouldn’t even call them features, right? So the characteristics of the product, how it’s built and how it’s built to sustain and be resilient. I haven’t explained what it’s used for. It’s used for, as a, as a lending institution that is owned, operated, and governed by the users of it. So my vision, my goal is to be able to create a product that churches, or, you know, small communities, villages, you know, small organizations, whatever the case is, entities, they can kickstart their own lending institution that doesn’t require some intermediary to come through and, and be the, the person who facilitates, dictates yes or no, you’re able to do finance this way or not.
12:12Bthat’s the use case. People, um, ideally will be able to, uh, start their own, onboard whoever they want. It could be, you know, uh, specific to a geographical region. It could be specific to, um, you know, common interests. Whatever the case is, they select who they want to onboard to this new lending institution that they Kickstart, and they conduct lending amongst themselves. And what that does is it keeps the money within that community. Whenever interest is paid out, it’s paid to somebody who is in that community. It’s not paid out to some big corporation who, you know, then uses your money to figure out how they can take more money from you.
12:12BIt’s paid out to the people that you onboard. So In my case, I have 2 parents, both entrepreneurs. I have 5 siblings, some of them -- 4 siblings, 5 of us total. Some are entrepreneurs, some are not. My friends, family, whenever borrowing happens, whenever they need to borrow money, I would much rather it be me that lends them the money.
14:35ARight.
14:35BOr if I need to borrow money, I would much rather borrow it from one of them. As opposed to having to go to some traditional finance institution where they put me under heavy, heavy scrutiny because they don’t know me. And then that scrutiny results in either a no or a yes, but that yes comes with excessive interest rate. And then once that interest rate is paid out, it goes to that institution and that institution uses it to figure out how they can squeeze more money from, if not me, you know, the economy that, that, that we coexist within. Rather than that being the case, rather than having that as your only option, I propose an alternative, um, one in which, uh, you borrow from the people that know you best.
14:35BUm, they, they have a system to account for how much you owe them. They have all of the loans, you know, will have the option to be collateralized against assets. And so if they want to see to it that you service your loans, they can do that by requiring collateral. Or they can say, hey, you know, I know you, I know you’re good for it, I’ll loan you the money without any collateral. That flexibility that you can have when you have a, you know, a connection with the person that you’re doing business with. That’s what I want to exist. And that currently doesn’t exist when you go to big institutions.
14:35BIt can’t exist because the people who have the decision-making capacity, the power to make those decisions as to whether or not you get approved, those people don’t know you from a can of paint. They can’t know everybody because they often service too many people to know everybody. And so I reject that, that as the only lending model. The way in which I demonstrate my rejection of that is to build the alternative, which is what Personal DAO is.
16:41AAnd yeah, and I think that really speaks to the beauty of Web3, DAOs, and decentralized finance, which I think all those things altogether are great. And it’s piqued my interest a lot because I wrote a book about decentralized finance, and we’ve had a chance to talk about that.
