What impact will crypto have on the nature of organizations? Will experiments in crypto’s governance lab lead to lasting trends in how companies are orchestrated?
This week on the “Opinionated” podcast we discussed this big topic with Jeff Dorman, the chief investment officer at Arca, a crypto hedge fund.
Dorman, a CoinDesk columnist, argues that “community tokens” (like LINK or SUSHI) will inevitably outpace “VC tokens” (like COMP, ATOM) because of the preferable incentives at play.
And he believes the trend of community ownership in crypto will meld with the wider shift towards companies doing right by a range of stakeholders as well as just their shareholders.
Dorman contrasts a decentralized finance (DeFi) project like Uniswap with Airbnb and DoorDash, which are now heading for initial public offerings. The former rewards liquidity providers (and soon token holders) who share in the system’s success. The latter companies were built on the work of homeowners and delivery guys, but all the gains from a public listing will go to stock holders.
“With digital assets, you’re starting to democratize access to these companies and you’re starting to spread out income inequality,” he says.
Incentives are key to make more democratic governance work. “Nobody cares about governance until it affects their bottom line. Twitter isn’t going to change its governance for the sake of ideology. If there’s governance for the sake of cash flows, that is another story.”
A sharp thinker with two decades of investing experience, Dorman had plenty of insights in our conversation covering bitcoin, nonfungible tokens (NFT) and Twitter in the wake of the Capitol attack this week.
Check out the episode now and read Dorman’s CoinDesk columns here.