Two Harvard Dropouts Raise $1.3M To Build The New York Stock Exchange For Web3

Tech Industry

The advent of the Internet released a torrent of new economic activity. The rise of the online world produced immense value creation offline. However, the tech corporations we have today had to be physically incorporated in the real world for them to matter as legal and financial entities. Newer forms of collaborative economic ventures such as decentralized autonomous organizations (DAOs) have shown immense promise in allowing individuals to coordinate while distributed across the globe and create vast new sums of wealth. Emmet Halm and Lucas Chu dropped out of Harvard to create DAOHQ to help facilitate the discovery, investment, and maintenance of DAOs globally. The Miami, Florida-based startup has raised $1.3M from Soma Capital, Stealth Capital, GSR, Mark Cuban, Andres Bilbao (co-founder of Rappi), BitDAO and Gitcoin and Thor Chan (AAX founder).

Bilbao says, “Ten minutes after speaking with Lucas and Emmet, I stopped and asked, ‘How old are you again?’ I quickly acknowledged that he had the kind of understanding about his business that I developed maybe two years deep into building Rappi. Emmet and Lucas blew my mind and it was a no-brainer to invest. Through their platform, anyone will be able to find great people all over the world to work and invest with. They are democratizing Web3 at scale.”

Frederick Daso: Despite the growing popularity of decentralized autonomous organizations (DAO), why are they still so hard to find and join for interested participants?

Emmet Halm and Lucas Chu: Most people still find DAOs organically on Twitter, through word of mouth, or jumping between Discord channels. At the moment, it’s up to an algorithm or chance by which DAO will be at the top of your Twitter feed or mentioned in a Discord. Hundreds of DAOs are launched each week across (brand new) use cases. In a rapidly growing & changing environment, there’s little data aggregation, standardization, or clear steps to join & invest in DAOs.

Joining a crypto community is exciting to a wide audience. Still, onboarding requires jumping over many hurdles, such as joining a Discord, setting up a centralized exchange account, purchasing crypto, creating a wallet, & interfacing with complicated on-chain voting platforms like Snapshot. Finding & joining DAOs gets even harder for “non-crypto natives” or newcomers to Web3.

Most people see these multiple barriers, the uncertainty of what a DAO is, and don’t become members. Hurtles to joining aside, it’s often unclear from Twitter & Discord what a DAO’s mission is, how it functions, & importantly, what rights token holders have. In their current state, it takes hours of due diligence, reading proposal history, & likely talking 1-on-1 with DAO members to understand what someone is buying into.

If someone goes through all the hurdles to joining & wants to contribute, it’s often unclear how to start a task. DAOs are experimenting with task-management & onboarding systems, such as making a list of “bounties” or freelance tasks that contributors can complete for tokens.

There’s no aggregation of key discussions that separates the main ideas from the noise. This makes DAOs inaccessible for casual participants who want to join multiple DAOs. Going through proposal discussions on Discord or another forum for more passive members who want to vote but not write lines of code can turn into a full-time job.

Daso: Have there been past attempts to centralize information on DAOs, and if so, why have they failed? If not, why hasn’t it been tried before?

Halm and Chu: Yes, projects like DeepDAO aims to centralize DAO financial analytics & RabbitHole aggregates “bounties” or DAO freelance projects. These current aggregators work for highly-sophisticated crypto-native users who want to see blockchain data as it is. For the average user, this is equivalent to trying to read off the code of an HTML-only website: bombarded with information that can be abstracted away from the core user experience. Current solutions fall short by not making it easy and intuitive for everyday users to understand DAOs, know what they get with “membership,” & easily invest and vote.

There’s a general attitude to building completely “web3 native,” meaning decentralized. Another way to view this is alienating non-crypto natives. When this happens, projects lose out on an opportunity to onboard & educate new users.

Past DAO aggregation projects have failed in usability. Providing analytics or descriptions is just the first step. Most people don’t learn about DAOs for their own sake; they learn about DAOs to invest, join, & participate. We’re building DAOHQ to provide the full user experience: find, invest, participate.


Daso: One could consider a recent predecessor to DAOs being open-source software movements and organizations, with the majority being non-profit. How have these movements shaped your conception of the massive for-profit potential of DAOs, given that more individuals collaborate online remotely nowadays to create value in the real world?

Halm and Chu: Open-source software movements have taught us two important lessons. First, contributors follow a power law. For example, 1% of Wikipedia users write nearly 80% of the articles. While not as dramatic, DAOs often have a small team of dedicated contributors who drive 80% of results.

Second is the power of transparency & composability. Anyone can propose improvements when anyone can see the software, which assets are in the DAO’s treasury, & what the votes are. Builders can build new tools on top of existing organizations, and investors can monitor how their money is put to work. If either isn’t satisfied, members can quit and often get rewarded and build a better organization if they choose. DAOs can take the best qualities of startups and open-source organizations, and their organizers can choose how many of these qualities to embody.

We live in a world where value-creation & social interactions are online. DAOs allow like-minded people from any corner of the world to work together, building shared values. Unlike corporate employees or freelancers, DAO members are simultaneously owners, investors, & employees. With so many options, people can select work they are passionate about. This is critical because the employees become employers, and founders become funders.

Employees can work for, with, and over their people. With DAOs, anyone can have as many jobs as they want, as quickly as possible, and with as much ownership as they want because of how early we are and because they can define their jobs. Less-flexible corporate jobs will be pressed to compete.

Daso: In our discussions, you two have compared DAOs being the 21st century/Web 3.0 equivalent of modern corporations. If that is the case, how do tokens from a DAO differ from shares of stock in a public corporation beyond the former’s utility?

Halm and Chu: In a publicly traded corporation, shareholders get dividends, quarterly financial statements, & occasionally get to vote. In DAOs, “investors” or tokenholders have the opportunity to be more actively involved in running the organization.

Financial data is live in real-time and 24/7, votes happen weekly or more, & tokenholders can submit proposals or do work themselves. Theoretically, nobody can stop you from doing what you want with what you own. Practically, it’s so early that there’s a lot of utility that is being built out right now.

Owning a token might give you “free” “stuff,” like access to servers, physical spaces, and events. This is where the social nature of DAOs comes into play. While most people purchase shares of stock for appreciation & dividends, DAOs add an element of community. Even in investment DAOs, joining the DAO creates an exclusive social space for its members.

Tokens (and DAOs, by extension) are powered by their community’s combined intelligence, trust and blockchain technology. You own part of a democratic treasury, network, currency, technology, and even a vibe when you own a token. The same can’t be said of a stock share.

Daso: How does the utility of a token result in a better incentive structure compare to traditional stock ownership?

Halm and Chu: DAOs solve the classic owner vs. employee mindset tension (and the Principal-Agent Problem). Startups partially solve this problem by granting equity to early employees, giving them an “ownership mentality” to succeed at all costs. Owners will go above and beyond for their business because they own equity. Most DAOs pay contributors in their own governance token, the equivalent of equity. Unlike traditional stock equity, these tokens are liquid & can be exchanged for USD stable coins or Ethereum.

As an investor, once you buy stock in a corporation, all you can do is sit on it, hope for appreciation, and wait for dividends. In DAOs, investors take a more active role: voting & creating proposals to shape the organization. This puts the power back in the hands of the stakeholders.

Incentive structures vary based on the DAO’s structure. Some DAOs use a direct-democracy approach: everyone can vote on every proposal. Others vote to delegate day-to-day operations to a salaried core team. In some DAOs, members can optionally delegate their vote to another trusted member & retake it at any time. This allows for extremely flexible governance & time commitment.

Daso: How do you and your cofounder combine to build a marketplace for DAOs to become the standard for how economic value is created?

Halm and Chu: With high flexibility paired with high discipline, we balance each other out. For years, we have respected each other’s work ethic and honesty, which helps us to improve and course-correct when needed constantly. While Lucas loves combining and starting new ideas, Emmet loves building teams and getting things done efficiently. DAOHQ is actively hiring right now.


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