Israeli blockchain consultant and DAO expert Dr.Milly Perry is the founder of Blockchain University Global (BUG) and DAO4DAOs Institute. Perry was recently honored as one of the 100 Women of The Future and is reputed as one of the promising leaders in blockchain.
Perry and I recently sat down for an exclusive interview about DAOs (Decentralised Autonomous Organisations) and their potential to transform the world.
Can you briefly tell us about yourself?
I serve as an expert and consultant for innovation, blockchain, and R&D. I am the founder of DAO4DAOs Institute and BUG Blockchain University Global. I serve as the Head of the Blockchain excellence center at the Israeli Chamber of Information Technology and a board member of the Israel Fintech Community.
I am a Blockchain academic fellow lecturer at Academic Colleges and Reichman University teaching blockchain in business administration and law programs in Israel. I served as policy and strategy director at the Tel Aviv university Blockchain research center, and I am an NFT ISRAEL entrepreneur and leader.
I was elected to be one of the 100 "Women of the Future" and one of the 20 most influential Blockchain global leaders and I am known as Dr. DAO since 2017.
I am engaged in projects at the Blockchain experts group in the WEF World Economic Forum, the ISO Blockchain Governance experts group, and other international organizations such as the European Blockchain Association. I serve as the co-Chair of the academic body of the International Trusted Blockchain Applications Association and I consult for industries and governments.
I have a Ph.D. in Information Science and a second Ph.D. in Art and Culture Sciences.
I am the author of the book "Blockchain – Turning ego-system to the ecosystem,” which includes a variety of use cases, blockchain principles, and practical ideas. The book facilitates and elaborates on blockchain's new paradigm implementation in society, businesses, companies, and governments.
ConstitutionDAO raised $47 million in 2021 to buy a rare copy of the US constitution at Sotheby’s. Was this a watershed moment as far as the emergence of DAOs is concerned?
It's difficult to definitively say whether ConstitutionDAO represents a watershed moment for the entire DAO (decentralized autonomous organization) industry, as the industry is constantly evolving and changing.
However, ConstitutionDAO certainly represents a significant milestone and a notable example of the vast potential of DAOs. I can say it caught the public's attention and revived the DAO dialogue since The DAO failure (referring to The DAO of 2016).
The DAO hack of 2016 is still fresh in everyone’s memory. What do you take from it in terms of the best practices for safeguarding a DAO’s treasury?
The DAO hack of 2016 was a stark reminder of the importance of security when it comes to safeguarding a DAO's treasury. Today we are in another position regarding our understanding of smart contract auditing, and prevention of security loopholes, and we are knowledgeable regarding governance to sate in place before launching a new DAO.
DAOs should stay up-to-date with the latest developments in the industry, including new security threats and best practices for security, and have accountable consulting regarding governance methods and tools.
DAOs major proposition is to outperform traditional organizations by operating an effective decentralized organizational structure. To what extent has this proposition played out?
We are at the beginning of this journey, creating the right tools and strategies, we are not there yet, it will take some time, and strong fights, to change the form and functions of traditional organizations, to shift power from hands to a more democratic form of an agile global organization of the web3.
Should DAOs be heavily regulated?
The question of whether DAOs should be heavily regulated is a complex one, and there are arguments both for and against regulation. Ultimately, any regulatory framework for DAOs should aim to balance the need for investor protection with the potential of DAOs for innovation and decentralization. And opinions on the matter can vary depending on an individual's perspective.
https://www.youtube.com/watch?v=WnUNJVzPbfw&embedable=true
DAO is a new type of tool aiming to coordinate ideas and actions. It is a novel type of blockchain-based system that enables people to self-govern themselves through a set of self-executing rules on the blockchain. Blockchain technology removes the barriers and constraints we have in the traditional world, allowing more participation.
Furthermore, it celebrates skills and creativity and doesn't care about jurisdiction, religion, or skin color. What only matters is that you can build. The implication of this is we must explore the potential of blockchain, Web3, and DAOs with appropriate regulations in place on one hand and keep it simple on the other hand to avoid strange innovation in its infancy.
Which is more important in a DAO, governance or security?
Both governance and security are essential components of a DAO, and it's difficult to say which one is more important as they are interconnected and interdependent. Governance is important in a DAO because it determines how decisions are made and how the DAO operates.
Effective governance structures can help ensure that the DAO is operating in the best interests of its members and that decisions are made transparently and fairly. Governance also helps to establish accountability and ensure that the DAO is following its stated objectives and values.
On the other hand, security is critical in a DAO to protect the DAO's assets and the interests of its members. A lack of security measures can leave the DAO vulnerable to hacks, fraud, and other security threats that could result in significant losses for its members.
Without proper security measures, the DAO's governance structure could become irrelevant, as members may lose trust in the DAO's ability to safeguard their assets. Therefore, it's important to have a balanced approach to both governance and security in a DAO.
The governance structure should include measures to ensure that the DAO is operating transparently and fairly, while also taking into account the need for security measures to protect the DAO's assets and the interests of its members. Ultimately, the success of a DAO depends on both effective governance and strong security measures.
What, in your view, is the biggest challenge facing DAOs today?
One of the biggest challenges facing DAOs today is the lack of mainstream adoption and understanding of the technology. DAOs are still a relatively new concept, and many people are not familiar with the technology or the benefits that it can offer.
As a result, there is a lack of infrastructure and tools to support the growth and development of DAOs. For example, there are few legal frameworks or regulatory guidelines for DAOs, which can create uncertainty and discourage participation. There are also challenges around user experience and onboarding, which can make it difficult for new users to engage with and contribute to DAOs.
Another challenge facing DAOs is the potential for governance issues and conflicts of interest. DAOs are designed to be decentralized and autonomous, but this can make decision-making and governance more complex. There is a risk of power imbalances and conflicts of interest, particularly if a small group of members or stakeholders hold a disproportionate amount of power or influence.
Finally, security is an ongoing challenge for DAOs. As DAOs hold and manage large amounts of digital assets, they are attractive targets for hackers and other malicious actors. DAOs need to have strong security measures in place to protect against these threats. In summary, the biggest challenges facing DAOs today include a lack of mainstream adoption and understanding, a lack of infrastructure and tools, and governance issues.
How much growth has the DAO industry witnessed so far?
The growth of the DAO industry has been significant over the past few years, although it is important to note that it is still a relatively nascent industry.
In 2020, the total value locked (TVL) in DAOs was around $140 million. However, this number has grown exponentially since then, and as of September 2021, the TVL in DAOs had surpassed $10 billion.
This growth has been driven by several factors, including the increasing popularity of decentralized finance (DeFi) applications, the proliferation of NFTs (non-fungible tokens), and the growing interest in community-driven projects and governance.
In addition to the growth in TVL, the number of DAOs has also increased significantly. In 2020, there were around 30 active DAOs, whereas as of September 2021, there were over 2,500 DAOs in existence. Today DeepDAO is reporting a total treasury of 23.6 M $, 6.7 M voters, and 1.8 proposal makers. They report 12015 DAOs and 2352 are included in their data.
Overall, the growth of the DAO industry has been impressive, and it is likely to continue to grow as more people become aware of the benefits of decentralized governance and community-driven decision-making. However, as with any emerging industry, there are also likely to be challenges and setbacks along the way.
Are DAOs here to stay?
DAOs allow members from anywhere in the world to pool capital and code rules for how they would allocate capital. Governance is meant to be automated by code and de-centralized (in other words, no one can tamper with the rules). DAOs promise new forms of organizational structures and collaboration in the digital and global space. As significant digital value is created, through non-fungible tokens or the metaverse, DAOs could be the native entity for value creation in cyberspace. Many blockchain protocols are built as global collaborations across borders.
DAOs are supposed to enable trustless and decentralized collaborations by coding governance rules. In my eyes, DAO is the Blockchain killer app and will have the most impact on the global economy in the next 10 years.