The Web2 era is in many ways the age of social media. The coupling of social graph and the advertising business model created a powerful engine for economic value generation that has also come with many unfortunate side effects. Now Decentralized Autonomous Organizations (DAOs) are offering a new approach to social organization online that will have far-reaching consequences.

Over millennia, small close-knit communities that coalesced around the daily business of survival have grown into towns, kingdoms and eventually nation-states. Modern social networks take this process a step further, creating super-structructures of human connection on an unprecedented scale. Seen in that context, DAOs are much more than a rearrangement of incentives, potentially offering a civilizational lever for powering the next stage in human cooperation.

Here are some properties of DAOs that are likely to have the biggest impact on the business of social media:

DAOs are inherently social 

When a DAO instatiates, a social network is born. A DAO is a group of individuals who have come together with a particular goal in mind. To function and collaborate effectively, they need tools for communication and governance. DAOs naturally aggregate contributions of all members, build a common social graph and allow social data to be monetised transparently on-chain.

Bridge to Web3 for social media companies

Each social media company is a monopoly over a treasure trove of user data. That arrangement is increasingly coming under fire from both regulators and consumers. Using blockchain technology for accountability, transparency and ownership of that data can go a long way toward addressing those concerns.

Power of tokens for content creators

User-generated content and the creator economy are at the center of social media today. But most of the value produced by that activity is captured by the platforms that host it. Blockchains tokens can alter that arrangement by allowing creators to monetize their fanbase using many of the same mechanisms DAOs employ to reward their members for contributions.

Early adopters as investors

Each new network faces the cold start problem of getting the first users to join and generate activity that can attract more customers. The network effects wielded by existing social media giants is one barrier to entry that prevents new approaches from gaining purchase. DAOs can bootstrap networks into being by giving financial upside to early adopters.

The Lens Protocol, launched by Aave on Polygon in February, is an example of many of the trends listed above at work. Lens is a composable and decentralized social graph built from the ground up with modularity in mind. It also offers a DAO-inspired way to creating digital identity in Web3.

A Profile NFT is the protocol’s main primitive which conveys ownership over individual content. Following a profile creates a Follow NFT, which comes with innate rarity and utility, such as vote delegation. This simple architecture offers the building blocks for creating a social DAO, opening the door to experimentation with new social network configurations.

Reach out to learn more about how your business can leverage the power of DAOs. Keep up with the latest development on our blog.

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