Inside a Social DAO: How an Online Community Becomes a Digital City

As Friends With Benefits DAO continues to scale, how will it incorporate decentralized governance principles and processes into its next phase of growth?

AccessTimeIconOct 17, 2022 at 4:47 p.m. UTC
Updated Oct 18, 2022 at 3:17 p.m. UTC
AccessTimeIconOct 17, 2022 at 4:47 p.m. UTCUpdated Oct 18, 2022 at 3:17 p.m. UTCLayer 2
AccessTimeIconOct 17, 2022 at 4:47 p.m. UTCUpdated Oct 18, 2022 at 3:17 p.m. UTCLayer 2

If I was part of any DAO, I would want it to be “Friends With Benefits.” It is just so darn cool. As a vortex of creative energy and cultural innovation, the purpose of its existence seems to be to have fun. FWB is a curated decentralized autonomous organization (DAO) filled with DJs, artists and musicians with banging distribution channels for writing, non-fungible token (NFT) art and more.

FWB’s vision is to equip cultural creators with “the community and Web3 tools they need gain agency over their production” by:

  • Making the concepts and tools of Web3 more accessible
  • Building diverse spaces and experiences that creatively empower participants
  • Developing tools, artwork and products that showcase Web3’s potential

The DAO has already made significant progress towards this mission, with some of its members finding major success in the art world. One example is Eric Hu, whose generative AI butterfly art “Monarch” raised $2.5 million in presale funds alone.

Kelsie Nabben is the recipient of a PhD scholarship at the RMIT University ARC Centre of Excellence for Automated Decision-Making & Society and a researcher in the Blockchain Innovation Hub and Digital Ethnography Research Centre. She actively contributes to open-source research network Metagov and DAO Research Collective.

The DAO crosses from the digital realm to the physical via its members-only ticketed events around the world, including exclusive parties in Miami, Paris and New York. The latest of these events was “FWB Fest,” a three-day festival in a forest two hours east of Los Angeles.

FWB wants to grow in a decentralized way by having its members run local events around the world based on the FWB Fest model. But the problem is that FWB’s governance and funding isn’t exactly decentralized, which is paradoxical to its mission.

A social DAO

The DAO essentially meets online via the chat app Discord, where it has various interest channels including fashion, music and art. FWB is the native token of the DAO, and anyone with 5 FWB can become a local member, which grants them access to Discord channels, a newsletter, livestreamed event content and other semi-exclusive perks. To become a global member, one must fill out an application, pass an interview with one of the 20-30 rotating members of the FWB Host Committee, and then purchase 75 FWB at market price. Membership also provides access to a token-gated event app called Gatekeeper, an NFT gallery, a Web3-focused editorial outlet and in-person party and festival events. According to the community dashboard, the current treasury is $18.26 million.

FWB started as an experiment amongst friends in the creative industries who wanted to learn about crypto. The original founder of the DAO is a hyper-connected Los Angeles music artist and entrepreneur named Trevor McFedries. While traveling as a full-time band manager, he followed the rise of bitcoin, using his paid time off to locate bitcoin ATMs and talk to weird internet people. Trevor wanted to run an experiment by “airdropping” a made-up cryptocurrency token to his influencer and community-building friends. He knew a lot of people deep in tech, venture capital and creative spaces, and soon FWB took off. According to early core team member Jose, Trevor is “not around anymore” but showed up at FWB Fest and was “just blown away” at the growth and progress of the project.

The FWB team realized it was becoming more legitimate as more and more people wanted in during the DAO wave of 2021-2022. COVID-19 only compounded this, as people longed for social connection while in quarantine. When those interested in joining extended beyond friends of friends, FWB launched an application process. Now, the DAO has nearly 6,000 members around the world.

FWB Fest was described as “an immersive conference and festival experience at the intersection of culture and Web3,” aka two days of non-stop friends and benefits in a forest in Idyllwild, two hours east of Los Angeles. With a vision for an online community to meet offline to forge a “digital city IRL,” the event was set to be the Web3 retreat of the year.

Building a digital city

The story of how I got to FWB Fest is the same as everybody else’s. I first got connected through a friend who told me about the FWB Discord. One of the core team members from FWB, Jose, then invited me to speak at FWB Fest based on a piece I wrote for CoinDesk on crypto and live-action role playing (LARPing). FWB members on Twitter officially nicknamed the event “LARP FOREST.”

LARPing refers to games where participants physically portray characters by wearing costumes, assuming personas, and pursuing goals within real-world environments while interacting with other players in character. LARPs can range in size from a few participants to large public events with thousands of people. Games can be designed for educational or political purposes with the goal of awakening or shaping thinking. Ultimately, they can change how we organize and interact across digital and physical spaces. In this way, FWB Fest served as a LARP in cultural innovation, peer-to-peer economies, and decentralized self-governance.

The vision of FWB Fest was to build an immersive offline town. As the FWB team wrote in an email newsletter leading up to the festival: “What happens when a Discord group chat moves into a 200 acre Arts Academy in the woods? Join us at FWB FEST, where our digital internet city will come to life for three days and turn into an offline town.”

At first, the idea of FWB community members buying a ticket to hear an academic like me speak was amusing. But then I noticed the other speakers – including Kei Kruetler, author and innovator at Gnosis Guild; Glen Weyl, infamous co-author with Vitalik Buterin and radical markets crypto-politician; and Pussy Riot, the feminist band that got arrested for playing punk music in a church in Moscow in protest against President Vladimir Putin. Why were researchers, radical politics advocates and feminist activist bands being recruited to speak at a festival?

When I heard that attendees were also contributing their creative talents, I wanted to as well. So I decided to create an ethnography of the FWB community and answer the question: What is the purpose of a social DAO?

The road to Idyllwild

As I drove my rental car to the Idyllwild Arts Academy, I wondered why people had come from all around the world to be here. Was this forest festival of any benefit to the broader community? Was there a political call to action or an underlying theme or message? Or was it just a big party?

The event was the ultimate self-organizing ad hoc network, with DJ sets, art installations, tea ceremonies and a livestream. This was not just a pop-up economy but a pop-up city. Micro economies emerged within it. Although the FWB team developed its own merch for the event, member @sister_jam beat it with his own, cooler merch for sale via cash, crypto or Venmo in the Discord chat.

I wondered if the FWB digital city had the political ambitions of a “network state” – an online community that garners enough resources and influence to compete with nation-state level actors for diplomatic influence. Although FWB does reportedly have $18.26 million of funds in the DAO's treasury, I don’t think its intention is to compete with nation-states. In practice, FWB’s ambitions extend about as far as collectively crowdfunding the purchase of one of the oldest Chinese restaurants in LA, which the DAO ultimately decided against.

The ephemeral quality of the event was perfectly encapsulated by a group “star gazing” session on the final evening. As I witnessed my first meteor shower, I recognized it would be here one moment and gone the next, but the impact would be lasting. FWB Fest provided a road map for future FWB events to take the concept and push it even further.

“Our culture is very soft,” stated Dexter, a core team member during his talk with Glen Weyl on the richness of computational tools and social network data. It is a gentle way to learn about Web3, where peoples’ knowledge and experience are at all levels, questions are OK and the main focus is shared creative interests, with just a hint of Web3.

The DAO provides something for people to coalesce around. It serves as a nexus, larger than the personal connections of its founder, where intersectional connections of creativity collide in curated moments of serendipity. FWB DAO creates trust through reputation, as friends are often told about the DAO from other friends and then vetted through an application process. Having pre-verified friends scales trust in a safe and accessible way.

The next plan is to provide a way for members to host their own FWB events, which will help the DAO scale its impact. Provisioning tools like the Gatekeeper ticketing app (built by core team member Dexter, a musician and self-taught software developer) provide a pattern to enable community members to take ownership of running their own events by managing ticketing in the style and culture of FWB.

Yet, now that FWB has built this city (both digitally and physically), how will it be governed and sustained? Its challenge is to imbed decentralized governance principles and processes into its next phase of growth.

Decentralizing the digital city

It wasn’t until my final evening of the Fest that I realized that FWB itself had raised $10 million in VC capital at a $100M valuation from some of the biggest names in U.S. venture capital, including Andreessen Horowitz and a16Z.

According to some community members, the raise was controversial for the community (although that was not reflected in the outcome of the vote, which passed at 98%). Some see it as the financialization of creativity.

“All this emphasis on ownership and value. And I feel like I’m contributing to it by being here!” stated one LARPer at FWB Fest, who runs an art gallery IRL. “Right now, it’s still a [frigging] pyramid.”

Crypto communities are learning that the age-old human coordination challenge of governance is hard. It is difficult to operate counter to the culture you come from without perpetuating it. This has a direct effect on decentralized governance and community participation, if Web2 governance strategies are being perpetuated instead of new ones that facilitate the values of Web3.

Participation in FWB DAO governance is limited, at best. Proposals are gated by team members who help edit, shape and craft the language according to a template before it can be posted to Snapshot by the Proposal Review Committee. Members can vote on proposals, with topics including “FWB x Hennessy Partnership,” grant selections and liquidity management. According to core team members in their public talks, votes typically pass with 99% in favor every time, which is not necessarily a good signal of genuine, political engagement and healthy democracy.

This DAO community, like many others, hasn’t yet figured out decentralized governance. For its next phase of growth and mission to empower its constituency and multiply its influence, it has to.

So far, the community has remained successfully intact, or “unforked.” Yet, progressive decentralization through the localization of events is not the same as decentralized governance. The goal of FWB should be to accomplish both. The goal of any DAO should not be to exit a start-up or provide a return on investment to venture capital firms. Similarly, FWB needs to support their mission in subversive ways instead of relying on traditional funding models to pursue their mission.

The goal of this social DAO to allow people to gain agency through the creation of new economies and propagate cultural influence must carry through each localization, and somehow align back with the overarching DAO – to create not just culture but to support the principle of decentralization in line with the mission of creatives directly benefiting from their work.

Final thoughts

Surprisingly, the highlight of the weekend for me was not James Blake playing an acoustic piano set in the middle of a forest. It was the serendipity of conversations with newfound friends.

As I sat on the grassy knoll of the amphitheater under the canopy of mushroom cloud tarps to watch James Blake play a live piano set, my neighbor professed to me: “Personally, I’m going to become a member. I want to build here because it’s cool.” At that moment, we shared mutual acknowledgment of the cultural significance of the moment we were experiencing. In search of an alternative to her experience of the daily grind of working for an ad agency, she had bought into the broader Web3 vision of doing things differently, of which we are all a part.

What remains to be seen is how this creative community can collectively facilitate authentic decentralized organizing for the impassioned believers, through connections, tools, funding, and creative ingenuity. In the meantime, I will probably join, too.

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Kelsie  Nabben

Kelsie Nabben is the recipient of a PhD scholarship at the RMIT University ARC Centre of Excellence for Automated Decision-Making & Society and a researcher in the Blockchain Innovation Hub and Digital Ethnography Research Centre. She actively contributes to open-source research network Metagov and DAO Research Collective.

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