As labor struggle takes center stage, can DAOs democratize work?

Web3 has given rise to a number of innovative business models. In particular, decentralized autonomous organizations (DAOs) have started gaining traction as Web3 as the creator economy comes to fruition. 

Natalie Salemink, CEO and founder of Prismatic — a tooling and treasury management platform for DAOs — told Cointelegraph that DAOs are internet-native organizations that utilize smart contracts to facilitate coordination and governance in pursuit of a common goal. 

When it comes to traditional businesses, though, one of the most interesting aspects a DAO structure can provide is leadership based on computer-generated code rather than individual authority. The idea of operating a business without any central governance has become especially intriguing to brick and mortar companies struggling to incorporate fair rights for workers. 

For instance, Starbucks, Amazon and Apple employees are currently uniting across America to form unions to ensure that retail workers receive fair benefits and humane working conditions. Yet, some members of the Web3 community believe that DAOs could serve as another way for employees to receive equal representation.

Brick-and-mortar DAOs

For example, Daniel Carias, co-founder of TheCaféDAO, told Cointelegraph that TheCaféDAO seeks to disrupt the corporate coffee shop model by serving as one of the world’s first brick-and-mortar business DAOs. “The idea for a brick-and-mortar DAO developed from a Reddit post I posted in August 2021,” said Carias.

Given the unique nature of a brick-and-mortar DAO, Carias’s Reddit post caught the attention of several other individuals who agreed that a physical DAO, rather than a digital DAO, could be an innovative business model. For instance, Dustin Tong, who also serves as the co-founder of TheCaféDAO, told Cointelegraph that Carias’s Reddit post was the only search result he found when researching “brick-and-mortar DAOs.”

After discovering the post, Tong joined TheCaféDAO’s Discord channel, where the community eventually decided to create a physical coffee shop based on a DAO governance model. According to Carias, TheCaféDAO was established to solve a real-world problem rather than just serving cups of coffee to a community of people who believe in Web3 models:

“We are solving a societal issue, which is how to give workers true ownership over their work. I believe that a DAO structure could help ensure this. I know that worker cooperatives and labor unions currently exist, but I believe that DAOs could serve as a happy medium.”

Like traditional DAO protocols with clear goals, voluntary participation and distributed ownership, Carias explained that TheCaféDAO aims to provide ownership to anyone who enters its coffee shop. The first instance of this will be demonstrated at TheCaféDAO’s pop-up taking place at the Seattle nonfungible token (NFT) museum from April 30 through May 1, 2022. “Customers who purchase one cup of coffee can immediately become co-owners of TheCaféDAO and steer the future of the business,” explained Carias.

Tong added that while the economics behind TheCaféDAO is still in development, the DAO will use a combination of Ethereum signatures and blockchain technology to ensure that everyone who makes a purchase at the Seattle pop-up location will be offered ownership of the DAO. He said:

“We are starting off by tracking every purchase made using Google Sheets. We know this is centralized, but we are going to be very public about each transaction. We are also providing a simulated distribution of our coffee tokens to everyone who makes a purchase at our upcoming pop-up. The coffee tokens serve as a piece of ownership into the DAO.”

Moreover, Tong explained that holders of coffee tokens will be able to vote on decisions regarding how the DAO is governed and managed.”The DAO can do what it wants with the tokens based on votes from customers and employees. The tokenomics model here is that ownership is created off the profits generated from the DAO.” 

Staying true to traditional DAO ideals, Tong also mentioned that DAO ownership is voluntary, meaning that only customers who wish to participate in the DAO can do so. “We are only collecting Ethereum signatures and tying those to a Discord handle for customers who wish to partake in governance.”

While TheCaféDAO is still an emerging concept, Carias pointed out that a DAO model applied to a brick-and-mortar business demonstrates the flaws in today’s corporate structure:

“Traditionally, corporations are a hierarchy built from the top down, but now we are seeing workers push back and form unions or join existing unions to counterbalance that power imbalance. But, we believe there is another option that no one is talking about yet, and we are trying to carve that out slowly through TheCaféDAO.”

Recent: Brain drain: India’s crypto tax forces budding…