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The Theory of Bankless DAO

The purpose of the DAO and why its critical in scaling the bankless revolution
David Hoffman David Hoffman May 12, 202114 min read
The Theory of Bankless DAO

Dear Bankless Nation,

The Bankless community has been in DAO mode the last couple week and if you’re part of the Bankless DAO, I think you’ll love this post.

But even if you’re not yet part of the DAO (more opportunities to join coming soon!) I think you’ll still enjoy this post.


If Josh Rosenthal is right about humanity entering a Crypto Renaissance then the DAO structure is going to be an essential primitive for social organization.

Maybe more important than the C-corp.

There will come a time when DAOs eat entire companies for breakfast.

Best to follow Josh’s advice and figure these things out now.

That’s what we’re doing.

This is the journey west—everything’s new.



Bankless Writer: David Hoffman, Co-Founder of Bankless

Growing Bankless

Growing Bankless with Ryan has been a ton of fun.

All the things that I intrinsically enjoying doing, I get to do as a job. Podcasting is basically thinking out-loud, and writing is basically thinking on paper, and these two things comprise much of what I do at Bankless, LLC, and I am blessed to have a gig that lets me pay the bills while doing the things I love.

Of course, it’s not all fun and games. Operating an LLC comes with all the typical responsibilities one would expect. Scheduling guests, managing the content calendar, coordinating with sponsors, hitting advertising goals, etc is the less-fun side of the business. But, of course, it must be done. Ryan calls these the ‘brushing the teeth and making the bed’ parts of the business; you just gotta do it, or else your teeth fall out. But truth be told, I don’t make my bed.

As we say, Bankless is a revolution, and it can be a revolution many orders of magnitude larger than just what Ryan and I can produce. The maximum potential of the Bankless revolution is one that scales to the whole entire global population. In order to grow that revolution, it can’t just be done with a podcast, youtube, and newsletter.

It needs everything.

In order to scale the Bankless revolution, (which is primarily a revolution in culture), Bankless LLC has dabbled with NFTs, Apparel (coming soon™️), and DeFi products, all playing their part in growing the Bankless Nation. 🏴

The only problem is…growing a company is limiting. And neither of us have any interest in managing the growth of a centralized company as large as it needs to be to maximize the Bankless revolution—nor do we think a mega media company is the right structure for this movement.

Bankless doesn’t need a CEO.

Frankly, I’m pretty disorganized, and being responsible for the salaries of any more than a handful of people sounds like a perpetual state of stress. Ryan is the organized prefrontal cortex of the company and is largely the reason why Bankless seems much larger than a team of two owners and three point-guards, and even he has no interest in growing out Bankless LLC to the size that it needs to be to become a global empire of Bankless culture. (RSA—I spent 4 years managing a business unit at a publicly traded company…never again!)

And plus, how oxymoronic would it be if the Bankless revolution was led by a centralized company? By definition, the Bankless Nation needs to be something crypto native and distributed.

The goal of the Bankless revolution is to be a headless brand of emergent coordination. If it was co-opted by a single entity, what’s the point?

Remember how angry you about the Wells Fargo acquisition April fools joke? Yeah…that’s because THIS SHOULD NEVER be possible. No one should be able to acquire the bankless movement.

Capitalism Scales Evil

I was chatting with Kevin Owocki of Gitcoin one night on zoom (RSA—piece from Kevin tmrw!).

We were talking about the concept of Digital Organizations and their legacy counterparts, the Company. He said “capitalism is only evil at scale” and it immediately landed with me.

A lot of suffering in the world is the result of capitalism at scale. Facebook, Amazon, and essentially monopolies are sources of evil exclusively due to the scale at which they operate. In the typical LLC or C-Corp structure, it is simply impossible to align incentives at the scale in which these entities operate. The bottom employees are too far away from the c-level executives, and the consumers of these company’s products are treated no better than livestock. The shareholders aren’t even in the same dimension.

When you buy local products, that money stays inside your community. You go to the local butcher, grocer, boutique, etc and when you spend your money, you’re handing your money to your neighbor, who, in turn, now has money to spend at your shop.

Value is shared inside of a closed system, and an economic body arises out of the demand to produce more for others inside the same economy. As a participant inside your local economy, you're entering economic transactions with people you sit next to on the bus, share a church pew, or drive on the same roads. You can’t externalize your harm to them, because everyone can see you do it.

When capitalism scales beyond your local community, things start to go awry. Facebook now governs over countries in which have no say in Facebook governance. Amazon employs people in far-off lands, who labor for the company, but the profits only flow to Amazon shareholders. Capitalism is good, but humans have not yet made coordination systems to prevent capitalism’s evil at scale.

There are misaligned incentives everywhere. This is the natural outcome of over-extended hierarchies. Hierarchies oppress. They calcify. Capital gets stuck at the top, and labor is kept at the bottom. Climbing the ranks becomes increasingly difficult, as does dislodging those at the top.

The history of humanity is an inevitable pendulum swing between networks and hierarchies, and we can already see the pendulum gaining momentum back towards the side of the network.

The future of scaled organizations is with Digital Organizations, which have a much flatter topology of organization, where the leadership and the laborers work shoulder-to-shoulder inside the same communication channels.

Discord vs. Slack

Discord and Slack have a ton of similarities. They’re basically group coordination software that allows for work streams to stay focused and organized, in order to enable asynchronous coordination between people. You don’t have to be perpetually present; things can progress without you being there, and you can tune into them as you’re ready to, and get caught up to speed.

Different Slack/Discord channels are spun up for different work streams, and the fluidity of movement between channels allows for work streams to come together as needed, in case there is a product being made that is the combination of separate work-teams.

But the main difference between Discord and Slack is that Discord is public. Discord is just inside-out Slack. Like the blockchain, everything is viewable to everyone else. This isn’t completely true; you have just as many privacy features in Discord as you can in Slack, but there’s something about the culture of Discord that promotes openness and access.

Slack culture is very much top-down. It’s very corporate. Discord culture is very bottom-up. It’s emergent.

Here’s the state of the BanklessDAO discord, just 1 week after birth:

Discord is the org chart

People like DAO member Above Average Joe are largely responsible for running traffic around the DAO, and making sure conversations, workstreams, and specialists find their way into the appropriate channel.

The Bankless DAO is a Discord of over 3,300 members, who are in various parts of their journey to try and find their niche in helping grow the DAO and grow Bankless.

Hiring sucks

Ask anyone who has ever run a company before, and they’ll tell you that the #1 least-enjoyable activity is hiring. It’s a slog. You have to get it right, so you have to allocate a lot of time to it. If you get it wrong, it costs you in multiple different ways, but largely in wasted time and money.

At the end of the day, the question of “why do you want this job?” is always answered by “money, obviously”.

Talent 🤝 Job match-making sucks.

But in DAOs, and on Discord, it’s different.

Bottom-up talent discovery allows for people to find the area they want to intrinsically do the most. This is in stark contrast with the top-down bestowment of responsibilities, regardless of whether you personally resonate with them or not, because you need to put the food on the table.

The future of work is inside of Digital Organizations, where you arrive voluntarily and without asking permission, after shopping around from DO to DO to see how you can best contribute the most value. Not unlike typical job hunting, but with DAOs in their ideal form, things are done on a merit and volunteer basis and compensation is allocated basis on contributions rather than employment agreements.

As I said in the Digital Culture Revolution: Not only do the legacy institutions of the world have to compete with the permissionless labor-monetization tools offered by Ethereum, but they also have to compete with the lifestyle that these tools offer: the freedom to work for oneself. No 9-5, no boss; just a creator and their computer.

Rather than a paper-pushing 9-5, I imagine the future of work as fluid, asynchronous contributions to digital organization that rewards its contributors on the merits and value of their contributions.

Scaling Bankless via the DAO

Ryan and I want to grow Bankless as much as possible. Not Bankless LLC, but Bankless the revolution. We think that Bankless DAO has the potential to scale the Bankless revolution far beyond what Bankless LLC ever could. Even if Ryan and I had the hungry disposition to grit our teeth and grow a 1,000 person media company (we don’t), that would take years and years to get done.

We don’t have that kind of time! The Bankless revolution is now! We need to move fast.

Bankless DAO, and Digital Organizations at large, will be able to scale faster and larger than centralized LLCs or C-Corps, because they will form via Chaordic Organization: A chaordic organization is a system of organization that blends characteristics of chaos and order. It is emergent organization, or auto-organization.

As with all social groups across talent, talent will rise to the top, and the community will self-select good leaders with good ideas. It’s truly the best of all worlds.

  1. David and Ryan are not the types of people to grow a 1,000+ person company to help steward the Bankless revolution.
  2. There are so many individuals who really want to contribute to the Bankless revolution.
  3. Digital Organizations allow for efficient, auto-organization using free-market principles to self-select for talent and leadership in work teams (we like to call them squads) to produce valuable Bankless products.

The optimistic case for the DAO is that the DAO can become the vehicle of scale for the Bankless revolution, and it’s going to be able to scale the revolution by creating Bankless products.


Bankless LLC has been working on three new revenue streams that were originally going to go the LLC. But they should be directed to the organization that’s responsible for scaling this movement. They should go to the DAO instead.

1) DeFi Products

The BED Index

Ryan has recently been leading the charge behind The BED Index

Get in BED with Bankless!

The BED Index is a proposed new index made in partnership with Index Coop. The BED index is meant to track crypto’s top 3 investable assets: Bitcoin, Ether, and the DeFi Pulse Index (DPI). A true set-and-forget product that is a full portfolio solution intended for beginners, or as part of a core-satellite construction for more advanced investors, and also a pristine form collateral for DeFi apps.

The BED index is currently undergoing Index Coop approval process, so this is not a sure thing. It’s already made its was to Decision Gate II (successfully passed Decision Gate I governance vote).

If the BED Index was approved by INDEX governors, the BED index would collect on👏chain👏revenue👏 with a 0.35 % Streaming fee (.175% to Bankless ~~LLC~~ DAO, .175% to Index Coop)…plus Index methodolist rewards denominated in INDEX tokens.

The Bankless revolution is a revolution in money and finance. If the DAO can execute, then this is just the first of many DeFi products that the DAO can coordinate to produce.


2) Apparel

Apparel is a huge missing niche in crypto. Current apparel opportunities suuuuccckk. Just go type in ‘Bitcoin’ or ‘Ethereum’ into Esty or Amazon and you’ll see. It’s pretty bad.

Which is weird, because crypto people have a lot of money but no good ways to express themselves in their clothing. It seems like a mass TAM with zero competition.

There’s another DAO out there that has realized this: MetaFactory.

MetaFactory sits at the intersection of community, culture and finance. It is a bridge through which online worlds connect to the physical worlds via unique apparel and brand experiences that are designed, curated and owned by the community.

Bankless DAO, meet MetaFactory 🤝

MetaFactory, meet Bankless DAO 🤝

MetaFactory is a distributed team of designers, manufacturers, and culturalists, who are intent with outfitting the Bankless Nation with the world’s dopest swag. Bankless LLC was in the middle of forming a long-term partnership with MetaFactory to start producing Bankless Apparel. We want the DAO to take this partnership over.

We have a formal announcement post about the Bankless L̶L̶C̶ DAO 🤝 MetaFactory partnership that was scheduled to be released on Monday, but if you are a DAO member, you can find this post inside of the DAO discord channel right now.

Go read it, and let’s get a conversation going in the Discord.

The best part is, we have the perfect DAO members to get this done.


DAO, meet Sinjun (Sinjun#0283).

Sinjun found us after we made a PSA on a Weekly Rollup episode after we said we are looking for artists and designers to help build out Bankless Apparel. Sinjun made this pitch video for us and we were instantly sold.

Sinjun went to the Fashion Institute of Design and Merchandising and has a degree in  Apparel Manufacturing Management. Also, he’s a Bankless DAO member. Sinjun and Bankless LLC’s (and DAO member) Head of Culture Michael Wong are leading the charge into Bankless Apparel.

The revenue from apparel that we sell in collaboration with MetaFactory—which comes in the form of MF’s native token $ROBOT—all goes to the DAO.

It’s up to the DAO to:

  1. Think up and agree on super dope apparel designs
  2. Work with MetaFactory to get the apparel quality and sale mechanism done right
  3. Figure out how to market the apparel and maximize for on👏chain👏revenue👏

There’s also the concept of tokenized apparel, which worked amazing with the BAP0 sale with the Balancer Smart Pool. People like tokens, and when something has a token, for some reason it fetches a much higher value. We should figure out a way to tokenize apparel sales, like we did with BAPs. It would probably 10x the revenue, and people love tokens.

There are three different apparel drops coming from Sinjun designs and MetaFactory manufacturing. All this goes to the DAO.

If you’re part of the DAO, go find the announcement post in the Discord.

Give us feedback, because we want to launch this thing on Monday.

3) NFTs

As we all know, NFTs are the future of cultural expression (a.ka. art). We want become an NFT production facility of Bankless art and Bankless culture.

At Bankless LLC, we’ve found two rising artists who are capable of making really awesome bankless memes and NFTs.


Bankless DAO, meet Fred:

Fred is the mastermind behind the Pass it On gif, the ETH has no Supply Floor gif, and the Just Keep Chugging gif, as well as many of the illustrations you see in my previous articles and on the Bankless Rarible.

Fred has been instrumental for generating digital graphics and art that help spread Ethereum messaging and Bankless culture, and we’ve already begun generating some ETH-denominated revenue from Fred NFT sales.

Oh yeah, and he’s a DAO member: Fred.#5650


Bankless DAO, meet Chi.

We’ve been working with Chi to produce some Ultra Sound Money NFTs on Rarible, and he’s the guy behind Ultra Sound Money Man:

The model for Bankless DAO and NFT sales should be simple:

  1. Find competent artists
  2. Allow them to make Bankless-stamped NFTs
  3. Agree to revenue split between DAO and artist
  4. Sell them under a Bankless DAO Rarible/Foundation/SuperRare account.

This is a simple model that can scale with more artists.

But NFTs don’t stop there. There’s even more opportunity with these tokens as we find more applications that fit the mold of the bankless mission (think tickets to events!).

Snowflake Growth

We’ve seen an insane amount of energy inside the Bankless Discord. There have already been so many proposals to do so many things, and it’s amazing to see that level of early excitement.

The challenge is that the energy is pretty unstructured. The first week of the DAO felt like a chicken running around without its head; we went in every single direction simultaneously.

These three above paths towards can help capture and focus this energy into meaningful productive output.

  • DeFi Products
  • Apparel
  • NFTs

These are all concrete, partially-formed vehicles for on👏chain👏revenue👏👏👏. We can use these early products as scaffolding for the rest of the DAO. DAO members who are interested in contributing can focus their energies on build and perfecting these specific revenue paths.

Once these paths are established, they can offer scaffolding for future DAO structures.

Snowflake Movies

Future structures could easily be:

  • Courses on Ethereum DeFi (using Bankless content that we’ve already made)
  • Newsletters with advertising revenue (eat our lunch, I dare you)
  • Real-world events, hackathons, and conferences .
  • Something we haven’t even thought of yet!

Some of these ideas from frogmonkee were pretty exceptional.

But in this early stage of the DAO, it’s important we start small, and build out the foundations that the DAO will can grow upon. Successful products makes room for more contributors to build off of those successful products.

Let’s take a money legos approach to the DAO, and focus on building out our first foundational legos, so that we can use them to build more legos in the future.

Next Steps

Part of the optimistic case for the future of DAOs is that ‘next steps’ can always be in many different directions at once. So here are some next steps that would best contribute to the DAO and help it grow over the long term:

  • Launch the Bankless BED Index (we need help with this—vote yes on DG2!)
  • Launch the Apparel Store (launches on Monday led by Mike & Sinjun)
  • Launch NFT Sales (First sale is live here)
  • Aggregate referral links to generate on-chain fees (1inch referral link is here)
  • Find Community Managers to moderate chat (Shoutout AboveAverageJoe!)
  • Find writers for Weekly DAO Substack Update (1st edition live—writers crushed it)
  • Build out the full Bankless website

On the website…

Right before we launched the DAO, I was working on sourcing website designers/builders to finally get Bankless LLC the website it deserves. I was going through this process while simultaneously Lucas and Ryan were leading the charge building out the genesis team to get Bankless DAO up and running.

I called up Ryan one day and asked…

“If we go through the trouble of getting a Bankless (LLC) website… what happens if the DAO makes a website too… then there are two Bankless websites… seems inefficient and misaligned…”

The conclusion we came to is that Bankless LLC doesn’t need a website, and for any website needs that we have, we should just funnel it through the DAO anyways. This then spun into a larger conversation about ‘where does growth occur in Bankless?’ to which the answer came down to ‘scale and growth and new innovation should be inside the DAO, not the LLC.’

Therefore, my personal next steps is to find all the DAO members who want to help build out the Bankless DAO website (which, we should just call the Bankless website), because we need a place to advertise and market all of our products:

  • Bankless Homepage
  • Bankless Content
  • Merch store
  • NFT Store & Gallery
  • BED Index & other financial products metrics
  • Courses? DeFipedia? Whatever else the DAO can come up with!

My personal next steps is to spearhead the coordination of website design, so Bankless can have a formal place to live, and we can instantiate our products and developments on the website.

Now I ask you…

What are your next steps for the DAO?

Action steps

  • Identify what you can do for the DAO
  • Read up on the Bankless DAO

In this article

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David Hoffman

Written by David Hoffman

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Co-owner at Bankless. Optimistic storyteller of frontier technology.

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