As DAOs grow, they will swallow more B2B markets. But B2D is a failed method. The dominance of the D2D strategy may force B2B companies to become DAOs. And it may happen faster than you think.
Fund reserves are being built
DAOs know very well that the next few years may not be smooth sailing. People are trying to accumulate funds for long-term development. However, many DAOs still hold their own governance tokens, which account for a large proportion of the treasury.
Diversification of treasury becomes important
In order to hedge the fluctuations of the DAO’s own governance Token, they need to diversify their investment. Changing the treasury Token into a stable currency is one way. But this requires raising funds (whether from the community or venture capital) or selling to the open market.
D2D Token swap can become an effective choice for treasury diversification
Exchanging Tokens with other DAOs is a win-win strategy. Both DAOs are winners because they can diversify their treasury + avoid the pressure of token sales/discount.
But in practice, D2D Token exchange is not the best choice. Why? Because they are pure financial means. A better approach is to exchange value between DAOs working together to some extent. Both DAOs have a vested interest in the success of the other.
DAOs introduce a model in which ownership and governance are democratized and distributed among stakeholders. In order to win, DAOs need stakeholders, and these stakeholders are not only motivated by the Token price. The vested interest among the partners is a step in the right direction.
This is where the agreement/product/service DAOs appear. Suppose you are a DAO and the treasury is filled with your own governance Token + you need to buy things. Who should you choose as the supplier? Those DAOs that will accept your governance Token as a payment method!
The supplier DAO accepts the governance Token as the payment method:
- Diversify their funds
- Seize the upside of the communities they serve
- Obtain governance rights in an ecosystem where they have vested interests
By exchanging value in this way, DAOs are actually performing token exchanges efficiently. Because of the same interests, both parties will benefit.
Both parties in the exchange got:
- Share the upside in the success of the other party
- Governance power in the communities they depend on/care about
Let’s imagine a world where every supplier that DAO works with them does this. If you are a web2 company that serves DAOs, you are at a disadvantage. The benefits of operating as a DAO rather than a company are much greater. D2D is the dominant strategy.
Therefore, we may see that companies that currently serve DAOs themselves have become DAOs. As DAOs grow stronger and merge more B2B markets, this trend may continue to drive a large number of companies to transform into DAOs.
This article also has many assumptions-this logic does not apply to all companies and DAOs. But this is not a new phenomenon-these assumptions have also worked in cooperatives. In isolation, individual cooperatives are more likely to fail, while cooperative networks are often more likely to succeed.
We are still so immature, and there are many unresolved things at present. But the macro trend is that more and more companies are transitioning to DAOs for various reasons. The dominance of D2D strategy may accelerate this trend, and much faster than we thought.