What is DAO? And what does it have to do with fashion? From English decentralized autonomous organization, it is a novel way of organizing and managing organizations by issuing or selling cryptocurrency tokens that track individual ownership. A type of organization that is controlled entirely by algorithms known as smart contracts and which determine the rules on how the parties involved in the DAO must cooperate. The DAO therefore acts autonomously and carries out the actions envisaged and codified by the smart contract without the need to equip itself with human management both for governance and for the operational part.
But in addition to being autonomous, the DAO is also decentralized because it is based on a blockchain network or on a particular technology capable of recording exchanges and information in a secure and permanent way through a shared database and without intermediaries. The exercise of power within the DAO is therefore collective and regulated horizontally according to the operating criteria of the smart contract and the blockchain. In this way, the traditional structure of a “physical” organization based on a hierarchical scale with shareholders, managers, executives and directors is no longer necessary.
With the DAO, this opens the door to a new level of business and cooperation between humans, machines and other smart contracts. Aspects that, in part, we have already learned about with the Metaverse, the new tech fashion that has already clashed with the real economy as happened with the iconic Hermès bags in digital version: the Meta Birkin by artist Mason Rothschild. A clash that rewrites the relationship between the real world and the digital world.
How will DAOS change the fashion industry?
“Decentralized autonomous organizations are the latest cryptocurrency trend to take off and fashion should pay attention to it.” It is the increasingly shared thought of industry experts. “With cryptocurrencies, we see people starting to pool their capital and work from a shared account, increasing the potential of such a collaboration,” Aaron Wright of Tribute Lab, the company that helped launch Red DAO, told Bof. the best-known DAO of fashion and who bought one of Dolce & Gabbana’s NFTs, the Doge Crown, for nearly $ 1.3 million worth of Ether cryptocurrency. Also Tribute Lab, which “supports digital stylists and collects objects, creations, clothes, accessories that may, in the future, increase in value”, has also collaborated with digital sneaker brand RTFKT to create a Metaverse-centric DAO called Neon DAO. , which currently controls about $ 20 million worth of Ether, and which has precisely the purpose of buying items from the Metaverse especially related to fashion, just like RTFKT digital sneakers “.
MacKinnon-Lee, founder of Digitalax, also believes that DAOS are the future of fashion, so much so that he helped launch a DAO which is a “cooperative” of independent designers operating on a set of rules encoded on a blockchain. “DAOS like these have the potential to disrupt the fashion system and transform a world, that of fashion, which risks atrophying and disappearing if it does not welcome and adapt to technological innovations”.
But alongside DAOS pooling funds and money for the purchase of creative digital works, DAOS are being born to govern the actual process of these creations. An example is Brud, the company that gave birth to Lil Miquela, the virtual influencer with more than 3 million followers on Instagram, and which is in the process of transforming itself into a DAO.
Other DAOs, then, try to do what traditional fashion brands do: create fashion to sell, which in their case takes place in the Metaverse. The Global Designer Network does so, a group of nearly 100 independent stylists created by the digital fashion design laboratory Digitalax, with the aim of transferring more power into the hands of creators, be they stylists or influencers, “because – as explained by the founder himself – web 2.0 companies including Facebook, Twitter or Youtube steal content, ideas and creativity from their creators. Thanks to DAOS, they can partially become owners of those groups that benefit most from their work “.