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Exploring the World of Game DAOs | State of the DAOs
You're reading State of the DAOs, the high-signal low-noise newsletter for understanding DAOs.
As readers know, gaming DAOs are on fire. In fact, Game7 DAO has been our sponsor for the last several months, and they are one of many DAOs making big inroads into building blockchain into a new era of gaming.
In this issue we take a first-person perspective on gaming DAOs, looking at the various models in play and loading you up with some examples to check out for yourself. It’s not clear yet whether web3 is infiltrating gaming or gaming is infiltrating web3, but bit by bit we’re seeing gaming guilds and communities awaken to the power of tokenized ownership.
“As the gaming industry continues to grow and evolve, Game DAOs will likely play an increasingly important role in shaping its direction and providing new opportunities. Whether you are a casual gamer looking to connect with others, an investor looking for opportunities in the gaming industry, or an esports fan looking to support your favourite team, there is likely a Game DAO out there for you.”
Also in this issue we summarise some excellent long-form content that is worth your time to read in full. It’s fair to say that the honeymoon period might be over for DAOs. While there is plenty of inherent value in the tooling and processes developed by DAOs, and even the potential for this to assist cooperatives to scale more effectively, challenges remain in the form of contributor working conditions and the ever-present regulatory quagmire. It’s time to consider what works, what doesn’t, what the opportunities are, and what limitations exist for DAOs.
It’s time to take a closer look at the State of the DAOs.
🙏Thanks to our Sponsor
Game7 is excited to launch Summon, our novel DAO governance platform.
Summon is a community LiveOps tool that takes governance to the next level by making it easy for DAOs to measure the contributions of their members, and reward them in ways that go beyond money.
How it works: Each community member mints a Soulbound NFT that evolves as the member contributes to the community, making the NFT upgradeable and unique. As each contributor completes quests and tasks, they earn experience points (XP), which help them move up in rank and unlock features and rewards in real time.
By tracking, measuring, and rewarding contributions, Summon provides decision-making capabilities to those who invest time and effort into the community, as opposed to only those who contribute capital.
The result is a meritocratic governance model that distributes power and governing rights to the most productive members of the community.
👉 Sign up to the Game7 waitlist to experience Summon.
👉 Follow Summon on Twitter.
Exploring the World of Game DAOs
Web3 is not only revolutionizing finance through DeFi, ReFi, NFTs, staking protocols, and lending protocols, but across the globe, DAOs are being formed around sports, mental wellness, governance and development, wealth generation, and so much more. The convenience and efficiency associated with organizing communities and developing projects in such a decentralized manner holds great appeal to many people, particularly in the world of gaming. Let's discuss what Game DAOs are, take a look at several types of gaming DAOs, and highlight some existing DAOs in the gaming industry.
Just as the term indicates, Game DAOs are decentralized organizations that specifically focus on the gaming industry. They aim to advance decentralized gaming and to empower gamers with greater control over their gaming experience. These DAOs operate on decentralized networks like Optimism or Arbitrum, fostering more transparent and fair gaming environments. Traditionally, game developers and publishers have complete control over game development, rules, and rewards, which often results in an unequal power dynamic. In a Game DAO, however, power is distributed among participants, many of whom are gamers themselves, allowing for more democratic decision making.
Types of Game DAOs
Here's a quick overview of several DAO types in the gaming industry:
Tokenized Game Asset DAOs allow players to trade and own in-game assets on the decentralized system, eliminating the need for a centralized platform. This fosters a more open and equitable gaming economy where players can trade, lend, or borrow game assets.
Game Development and Funding DAOs are for developers to pitch and fund game development projects. They allow users to have more input into the game development process, including suggesting features and helping to test new games.
Game Distribution DAOs are focused on decentralized game distribution. They assist developers in reaching a larger audience by distributing their games via a decentralized platform, thereby reducing the need for centralized game distribution platforms.
Community-driven Game DAOs are dedicated to building a vibrant gaming community, enabling gamers to connect, collaborate, and play together. They frequently have a strong social element, with members organizing events and activities, exchanging tips and strategies, and assisting one another in improving their game play.
Investment-oriented Game DAOs seek to maximise financial returns for their members. They put money into gaming projects like game development studios, esports teams, and gaming hardware manufacturers. Members of these DAOs typically conduct due diligence on potential investments and track their performance over time.
Governance-focused Game DAOs are concerned with influencing the gaming industry's future. They aim to persuade game developers, publishers, and other stakeholders to create games that are more in line with gamers' interests. These DAOs frequently have a strong advocacy aspect, with members participating in campaigning, public relations, and other activities to further their objectives.
Game Asset Management DAOs aim to manage in-game assets, such as virtual goods, virtual money, and other kinds of virtual property. With the help of these DAOs, players can pool their funds and jointly manage their assets, which can improve pricing, increase liquidity, and lower transaction costs.
Esports-focused Game DAOs have a vibrant fan base with participants who follow their favourite teams and athletes and participate in online forums and other activities. These DAOs concentrate on assisting the esports communities by offering funding, materials, and other forms of assistance. They offer coaching and training, aid in developing a robust esports ecosystem, and assist players and teams in participating in competitions.
As the gaming industry continues to grow and evolve, Game DAOs will likely play an increasingly important role in shaping its direction and providing new opportunities. Whether you are a casual gamer looking to connect with others, an investor looking for opportunities in the gaming industry, or an esports fan looking to support your favourite team, there is likely a Game DAO out there for you.
Popular Gaming DAOs
Now, let’s take a look at some examples of existing gaming DAOs.
DFL is a blockchain-based platform that enables users to participate in competitive tournaments, vote on game results, and contribute to the platform's development. Additionally, DAO Fight League participants can engage in world-first Player versus Player (PvP) virtual reality boxing competitions where they face off against other fighters from around the world.
This DAO is a multi-tier platform, consisting of player guilds (DACs) and sub-DAOs reflecting factional, regional, and local interests of the Star Atlas game – a “grand strategy game of space exploration, territorial conquest, and political domination”. By locking POLIS tokens, members of the Star Atlas gaming ecosystem can decide how the ecosystem as a whole will be affected. The DAO is governed by seven guiding principles, including excellence, purposefulness, security, openness, and governance as a metaverse activity. Members propose and vote on POLIS Improvement Proposals to improve the ecosystem. The Star Atlas Council, an elected body of representatives, directs the DAO, and the Star Atlas Constitution lays out its guiding principles.
The Decentral Games DAO is a community-led initiative that aims to bring millions of people into the metaverse. Power is distributed among all token holders through its decentralized governance structure. The xDG token is the governance token that represents ecosystem ownership, with holders receiving voting power and governance rewards in proportion. The Decentral Games Treasury supports initiatives that help the ecosystem grow and holds a variety of crypto assets. Members can help by suggesting and voting on decisions like treasury fund allocations, new game features, and changes.
Treasure is the decentralized DeFi and NFT ecosystem built for virtual world projects on Arbitrum. Every project listed on the platform's marketplace utilizes MAGIC in their respective metaverses, with each community creating its own lore for this resource. In Treasure, token holders ratify essential decisions proposed by the Council and community through a decentralized framework.
SmithyDAO is an entity that operates on the Treasure Ecosystem and is built on the Arbitrum network. The MAGIC token is used and provided utility by the DAO. Its main product is Smithonia, a world that supports a hybrid economy of in-game/off-chain currency and resources. The currency and resources are linked to the cryptocurrency ecosystem and the global economy, supporting and promoting both.
The Merit Circle DAO is committed to combining the limitless potential of blockchain technology with the most recent advancements in gaming to create the next level of captivating gaming adventures. The Merit Circle DAO carries out activities across four verticals, each offering a unique product. Together, these products create an ecosystem that enhances the value of the MC token and the DAO as a whole. These four verticals are:
Merit Circle investments
Merit Circle gaming
Merit Circle studios
Yield Guild Games is a gaming community focused on providing an equal opportunity support system for players worldwide to achieve more. It began as a lending platform for NFTs and has grown into one of the largest web3 gaming guilds with players from all over the world. As a DAO, they plan on revolutionizing how we play games and laying the groundwork for the next generation of games and gamers using web3 technology.
The Blockchain Gaming Revolution Is Just Getting Started
Game DAOs represent an exciting new future in gaming and blockchain technology. These DAOs have the potential to transform the way games are made, played, and monetized, restoring control to gamers. With the gaming industry's rapid expansion and the increasing popularity of cryptocurrency and blockchain, it is evident that in the years ahead, Game DAOs will continue to be an area of innovation and exploration.
🔥 and 🧊 insights from across the DAO ecosystem
Authors: Laura Lotti, Nick Houde, Tara Merk
🔑 Insights: Working for a DAO involves diverse forms of labor within a flexible organizational structure based on open membership and collective ownership. While some celebrate DAOs as the future of work, their implementation varies greatly, ranging from token-mediated protocols to more traditional company-like structures with on-chain elements.
Surveys analyzing the working conditions of contributors to the web3 ecosystem reveal challenges such as unstable compensation, navigating a decentralized work environment, and unclear on- and off-boarding processes.
These surveys have limitations in distinguishing contributor types, fostering in-depth conversations, and identifying missing mechanisms for long-term viability of DAO contribution as a work option.
While contributors are attracted by DAO ideals, the lack of public goods mechanisms and social security poses challenges in realizing the vision. Instead of categorizing DAOs under a single frame, considering them as hybrid forms may provide a more productive approach.
What’s Next? Using ethnographic interviews and a focus group, the team hopes to understand the day-to-day experience of working in DAOs and web3, mapping social mechanisms and value flows to develop new strategies and mechanisms that address contributors' needs and replicate the benefits of legacy social security systems.
Authors: Sarah Hubbard, Connor Spelliscy, Nathan Schneider, Samuel Vance-Law
🔑 Insights: The dominance of major tech players has lead to societal problems such as data privacy issues, mental health crises, political interference, and fake news. This report says attempts to control such harms have not been successful and suggests that technology cooperatives could potentially compete if given access to tooling developed for DAOs.
Cooperatives have not scaled successfully but could do so with tools to improve voting, engagement, and member compensation.
Onchain record keeping could help to maintain transparency and accountability for cooperatives.
Experimenting with funding models being explored by DAOs could help cooperatives compete with corporations.
Author: Kelsie Nabben
🔑 Insights: Accountability refers to the procedures and systems that hold people, groups, or institutions accountable for their choices. The author writes that establishing and upholding accountability is essential for establishing trust and legitimacy and fostering effective and responsible governance in public institutions, private organizations, or self-governed communities.
Accountability sits at the heart of decentralized governance. It occurs at multiple scales between multiple actors and forums. That means it could be different in decentralized public blockchain protocols, DAOs, or liquid staking protocols.
Trust, legitimacy, confidence, and accountability are essential components of effective governance — hence decentralized technologies defer some administrative and regulatory processes of coordination to software-encoded rules, establishing a system of “trustless trust.”
Accountability can occur through a blend of social trust-based and regulatory measures. In both blockchain protocols and DAOs, governance depends on both social and technical monitoring, verifiability, and enforcement that occurs both on and off the blockchain.
🔑 Insights: The article discusses the rise of DAOs and their impact on traditional centralized systems. It explores how DAOs are transforming industries and reshaping governance and decision-making processes, with the trends, challenges, and opportunities that DAOs present.
DAOs' innovative governance mechanisms will evolve to address scalability, efficiency, and stakeholder participation, enabling decentralization of ecosystems and paving the way for novel economic models through cross-platform functionalities, collective decision making, and tokenized assets.
The inherent decentralization of DAOs presents legal, regulatory, and security challenges, emphasizing the need for balanced regulation, robust security measures against smart contract bugs, and improved user interfaces for enhanced user experience.
DAOs enhance financial inclusion by removing intermediaries, fostering tokenized economies with incentive structures. The transparency and immutability of blockchain technology used in DAOs boost trust, accountability, and fairness among participants.
DAOs' future may involve symbiotic relationships with traditional organizations, leveraging their funding, knowledge, regulatory compliance, and market access to create a hybrid model that combines the benefits of centralized and decentralized systems.
For a sustainable future, DAOs must address ethical considerations such as inclusivity and diversity in decision making, scalability, and governance efficiency, with a focus on privacy, data security, and dispute resolution mechanisms.
🙏 Thanks to our Sponsor
Game7 is a community formed to accelerate the adoption of Web3 gaming through crowdsourcing, to create public goods that can be owned by many. It’s a home for those who seek to influence, shape and build a better gaming industry, where the interests of developers and players are aligned.
Communities are formed through shared missions, experiences and support. Game7 operates much like a collaborative game. A member’s actions and contributions are measured to unlock influence.
Game7 prioritizes steady growth over short-term profit, enabling teams to maintain focus on building and real impact. The DAO aims to invest its treasury in infrastructure building, tool acquisition, development of the community, and gaming.
The community actively supports open-source software. They created a grants program to fund open-source software development; a way to encourage builders to focus on building without having to worry about funding (or anything other than building). Game7 does not expect financial returns as this is their way of supporting public goods.
Organizing global events so people can connect and collaborate is very important to Game7. The events could range from academic conferences to annual summits and pop-up online events conducted both digitally and in real life.
Game7 recently launched Summon, a tool that allows DAOs to measure the contributions of members and reward them in ways that go beyond money: status, rewards, influence, power. Summon intends to provide a contemporary solution to modern DAO governance by progressively rewarding those who contribute. Summon is a meritocratic governance model and it can integrate with any existing management tool stack. Visit their waitlist and click “Join Now” to sign up for the Game7 community prototype.
Game7 believes everyone has something unique to offer. You can join by organizing initiatives, collaborating with like minded individuals, and building products that benefit everyone.