Crypto/NFT 101: Explaining DAOs using SquiggleDAO as an example
Dip your toes into the next level of crypto
By Stefan Arnold, The Wallflower
Hello again, all. The last time I wrote you, I opened the Inaugural Wallflower Charity Auction. I’m happy to report the auction was a success, and I was able to donate $5,500 to the Michael J. Fox Foundation for Parkinson’s Research. With my employer’s generous match, I donated $11,000 to such a great cause. I couldn’t be happier with the result and look forward to hosting more auctions in the future.
But on to other NFTs! From time to time, I won’t showcase great art or give my thoughts on how artists and sites can sell more NFTs. Yes, once in a while, I will dive (just a bit) into terms you may have heard in the crypto space that you haven’t heard in the real world.
Let’s talk DAOs.
DAO stands for Decentralized Autonomous Organization. These organizations are made on the blockchain and are ideally set up so that community votes control transparent rules and smart digital contracts. That’s the “D,” in DAO … decentralized. There is no permanent leadership in DAOs. A group of individuals come together, sets goals, and tries to accomplish those goals through community consensus and volunteer efforts. In many cases (at least for those we care about), DAOs are focused on art, curating that art and promoting it to the wider cryptocurrency audience.
Let’s use the SquiggleDAO as an example for just a little deeper dive into DAOs.
Disclaimer: I am a member of the SquiggleDAO by owning two Chromie Squiggles. My voting power is minimal, and my current involvement with the DAO is to help with marketing efforts a few hours a week. Since the SquiggleDAO is the DAO I know best, I am presenting it here as an example.
OK, maybe we should start at the beginning. What’s a Squiggle? Well … it’s this …
Chromie Squiggles (Squiggles for short, of course) are a generative work of art made by Snowfro, an artist and the founder of ArtBlocks.io, which hosts works of dozens of generative artists. Because a computer generates the work from an algorithm the artist creates, there can be more than one. There are more than 9,000 Squiggles so far … and no two are alike. But on the way to a total of 10,000, there have been some amazingly different outputs.
I spoke with Gregg Peacock, part of the Genesis team of the SquiggleDAO, about how the DAO works and the goals it hopes to achieve. The conversation has been edited for clarity and conciseness.
Me: Thanks for joining me, Gregg. How did you first get into NFTs and Art Blocks?
Gregg: Well, I lived across the street from what is now Dapper Labs and heard about Cryptokitties from some people I knew there. I minted a few and played around with it but didn't immediately see the bigger picture. It wasn't until late 2020, when I started to look at DAOs, that it really started to make sense to me. I wasn't by any means early to CryptoPunks as investing in art itself seemed impossible to evaluate from a risk perspective. But once I started to connect the community elements together, it made total sense — this is why we launched SquiggleDAO. It was a watershed moment for me to realize that you could potentially build a community around art — or any NFT for that matter.
Thank you. Which is the favorite Squiggle that you own? You are part of the Genesis team. What exactly does that mean, and can you explain what the DAO is, where it is now, and its mission?
Well, I owned our logo squiggle. I donated it (full spectrum (a Squiggle trait)) to the contribution program. It will always be my favorite.
(The Genesis team) was the original team that brought this idea to the broader community. Our vision was simple: Bring people together around the shared belief in an NFT collection and leverage that social capital to grow its value. To date, we have collected over 250 pieces of rare NFT art worth almost $6,000,000 and have an active community of 560 members deciding what to do with it. What's most impressive is that we did this with zero funding — all art was donated to the vision in exchange for the right to vote on what happens with it. This was the first and most successful version of this launch model. Originally it was the five of us with all the voting power, but through the contribution rounds that we launched to build the Treasury (art owners giving their works to the DAO), we quickly became minority holders — the community now controls 60% of the vote. We took this approach for several reasons: We wanted to be able to launch quickly with tight coordination (small team) but rapidly distribute control during the early stages. The Genesis team still leads most of the strategic development, but the team is constantly growing.
How many Squiggles does the DAO own, and what other Art Blocks works are in the DAO? Any other NFT art that the DAO plans to acquire? Do you see Squiggles as always the main component of the DAO, or can you envision a time when the DAO may have thousands of pieces, and the Squiggles are just a small part of the DAO, despite the name?
The DAO owns 233 Squiggles and a few other choice Art Block pieces. Our primary focus will likely always be on the Chromie Squiggle. It is the most important Art Block series since it was the first to launch on Art Blocks and authored by Snowfro himself. The goal of the DAO is to create social capital through the shared love of Squiggles, and so it will likely remain the focal point for the community. I could see the DAO building off of the Squiggle similarly to what (the FingerprintsDAO) has done (derivative artwork), but that will be left up to the community. The thesis here is that the shared love of this specific art series will attract and retain attention from DAO members.
You said all the Squiggles and other art were contributed. This was for the $SQUIG token. What is a token, and how does it control the DAO's governance? What other purposes does the $SQUIG token have?
Good question ... the $SQUIG token is the voting token we generated to enable the community to operate. It confers voting rights to the holder for DAO activities (enabled by Snapshot, which records changes to data). Although the token will ultimately trade with liquidity, it does not confer any rights to revenue or direct ownership over the Treasury. Although it's important to recognize that DAO members could ultimately vote to do whatever they want with the treasury, the vision is to avoid any financialization of the treasury (via fractional ownership, for example). We hope this will be a community, not an asset.
So what you are saying is, the token will likely have value beyond voting rights soon. What you want the community to avoid is having an individual or group controlling the DAO by owning a majority of the $SQUIG? ... This will get harder to do as the DAO grows, correct?
That was not our (Genesis) intention but of course; it's not our decision anymore. I think it's fair to say that the community will act in its own best interest, whatever that may be.
As part of the Art Blocks Community, I agree with your sentiments and hope the DAO stays focused on the community. But, as you say, the members will vote on it! ... The main way to join the DAO is by owning a Squiggle. Are there other ways? And how can people earn $SQUIG? What are the current plans for trading $SQUIG on broader markets? As for governance, how is the DAO divided, and how can members help if they desire?
Discord is our primary community and requires a Squiggle to join. We've explored changing this to $SQUIG ownership as prices continue to rise, and we feel that the community would likely support broader participation.
Like many other DAOs, we will be launching a Seasons program that will include specific strategic outcomes and a substantial allocation of $SQUIG tokens to reward those to help make it happen. This is currently underway and will likely launch in the next few weeks. We're also planning to launch a Scholarship program to enable those without a squiggle to participate.
Enabling $SQUIG liquidity is also on the roadmap and will likely follow this initiative. We're trying to decide on the best approach before bringing it to the broader community for approval. I should also mention that "we" is quite fluid here. The Genesis team provides much of the impetus, but many of these ideas and much of the work are being done by other community members. We hope that our first Season will further expand the contributions from community members.
Editor’s Note: The SquiggleDAO primarily consists of four committees: Community, Marketing, Curation, and Acquisition. Through these committees, working in conjunction, members of the DAO work toward set goals as defined by Seasons (usually 90 days).
If an artist would like their work chosen for purchase by the Squiggle DAO, is there a way to apply? Are generative artists your only focus, or do you envision the DAO expanding its holdings to all NFT art?
There is an initiative being explored by the Acquisition Committee to do exactly this. Collecting and supporting crypto-native art is a core component of the DAO, so it is likely that this will exist in some form.
Awesome. Anything else you would like to add about the DAO?
My favorite part of this grand experiment is how excited and aligned the team is around this emerging model of value creation. I believe that DAOs are the future of work for many of us. Even a small win for SquiggleDAO is a huge win for a future where anyone with talent, curiosity, or the desire to grow will be given the opportunity to do so.
That sounds like a great future indeed. Well, as a Squiggle owner, I think we need a catchphrase when we say goodbye to another owner. So, Gregg, you decide: "Squiggle on," "Squiggle you later," … or should we send it to committee?
Haha. There are some creative people on the Marketing Committee. I'm sure they'd love to take a crack at it.
Squiggle on it is! .... Thanks, Gregg!
Great ... thank you.
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Thanks to Gregg for the insight into the SquiggleDAO. For more, see the DAO’s blog here. Or look at all their pretty Squiggles! There are many more DAOs involved in many aspects of the cryptocurrency and NFT space. Find one you’d like to join and make that corner of our favorite online hobby a little better place!
Until next time, good hunting!
Stefan
Stefan Arnold is a former gallery owner connecting artists and collectors in the digital space. He tweets from his FreaklionArt account. He can also be found talking about all things Art Blocks on the Art Blocks Discord.