How DAOs Open Doors for the Unbanked

It’s a new, borderless world. This article is part of Future of Work Week.

AccessTimeIconJun 30, 2022 at 12:12 p.m. UTC
Updated Jun 14, 2024 at 6:30 p.m. UTC

Consider the millions of people in advanced economies who began working remotely for the first time during the COVID-19 pandemic. Tens of thousands of people whose jobs previously limited them to high-cost cities, such as San Francisco or New York, moved to lower cost areas, taking their salaries with them. For the first time, they had an opportunity to build wealth that wasn’t swallowed up by astronomical rents and other living expenses.

Could it be that a similar trend across the world might take hold as Web3 tools become more widely adopted? Decentralized autonomous organizations (DAOs) are borderless entities that unlock a global workforce, drawing skill and talent from all corners of the world.

Ryan Berkun is the founder and CEO of Teller Finance. This op-ed is part of "Future of Work Week."

This means that people who live in countries without advanced financial sectors don’t have to be limited to the business or employment opportunities that are physically close enough to pay them in their local currency. And it might have serious implications for the 1.7 billion adults worldwide the World Bank estimates lack a bank account – greatly increasing their difficulty in finding good-paying work, safely accruing capital and making significant investments.

DAOs offer the world’s unbanked a mirror image of the same dynamic as the Great Migration. For the first time, they can make a better living than they could otherwise find in their local economies, without having to move somewhere else to find it.

DAOs foster fair, merit-based compensation

DAOs enable advancement based on merit. One way this is achieved is through allowing members to remain anonymous; this way, contributions are valued solely on their merits without getting mixed up in the social dynamics and biases too often implicit in traditional workplace structures. A recent article in the Harvard Business Review discussed how anonymizing applications to use the Hubble Space Telescope resulted in more women being approved for scarce time slots to use it.

DAOs offer the possibility of this kind of anonymity on a grand scale, with massive implications for removing biases based on ethnicity, nationality, gender and other identity characteristics that aren’t related to the value of an employee’s contributions.

While this is fairer for everyone, it is particularly important to the unbanked. It removes the downward pressure on compensation created by the perception that the unbanked lack viable economic alternatives.

Furthermore, transparent blockchain transactions mean DAOs can promote compensation commensurate with the value workers generate, helping to create competitive salaries within and across the crypto ecosystem.

DAOs help the unbanked generate wealth

It is extremely difficult to build wealth without a bank account to securely store and accrue value that earns interest. For unbanked individuals living in countries with unstable economies, this challenge is compounded, especially in countries with extreme hyperinflation like Venezuela, Sudan, Zimbabwe and Yemen.

The best atmosphere for wealth generation is a stable, predictable and fair investment climate, governed by rules rather than the whims of individuals. Transparency International’s annual Corruption Perceptions Index (CPI) is a good working proxy for the state of a country’s investment climate. The CPI rates 180 countries by their people’s perception of public sector corruption on a scale from 0 (“highly corrupt”) to 100 (“very clean”).

According to the World Bank study referenced above, nearly half of the world’s unbanked population resides in only seven countries – Bangladesh, China, India, Indonesia, Mexico, Nigeria and Pakistan. Not one of these countries scores above a 45 on the CPI. All but two of them are in the bottom half of countries ranked.

DAOs can contribute to creating a more ideal environment for wealth generation by offering the transparency and clarity on governing systems that many economies lack. A DAO’s code is open source, meaning that anyone can go through it and learn exactly what it will do.

Even if one isn’t a developer, most major DAOs choose to be audited by reputable security experts. This means that DAOs are predictable and fair in the way they allocate returns on investment. Also, since a DAO’s members interact with it directly – not through the traditional financial system – they are protected from any theft, graft and corruption that might be occurring among their local public officials or private bankers.

In addition, because DAOs and the DeFi ecosystem are global, the unbanked can make investments worldwide. They can be paid or hold savings denominated in various cryptocurrencies – even in stablecoins pegged to the world’s leading fiat currencies or backed by a basket of other assets. This can be a huge boon to those whose local currencies tend to be weak or lose value.

The unbanked have historically suffered many disadvantages, but DAOs may offer a turning point. Through mass adoption of these Web3 protocols, the unbanked can gain meaningful access to opportunity, fair compensation and a real chance to generate wealth.

Further Reading of CoinDesk’s Future of Work Week series:

It may be a bear market, but there are still plenty of jobs to be had at crypto companies.

Crypto can make it faster and cheaper to pay workers. This article is part of the Future of Work series.

By adopting a more open, fluid model, traditional firms would find it easier to attract talent and end up with a more passionate, engaged workforce.


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Ryan  Berkun

Ryan Berkun is the founder and CEO of Teller.