More on Marketing
Jon Brosio
3 years ago
You can learn more about marketing from these 8 copywriting frameworks than from a college education.
Email, landing pages, and digital content
Today's most significant skill:
Copywriting.
Unfortunately, most people don't know how to write successful copy because they weren't taught in school.
I've been obsessed with copywriting for two years. I've read 15 books, completed 3 courses, and studied internet's best digital entrepreneurs.
Here are 8 copywriting frameworks that educate more than a four-year degree.
1. Feature — Advantage — Benefit (F.A.B)
This is the most basic copywriting foundation. Email marketing, landing page copy, and digital video ads can use it.
F.A.B says:
How it works (feature)
which is helpful (advantage)
What's at stake (benefit)
The Hustle uses this framework on their landing page to convince people to sign up:
2. P. A. S. T. O. R.
This framework is for longer-form copywriting. PASTOR uses stories to engage with prospects. It explains why people should buy this offer.
PASTOR means:
Problem
Amplify
Story
Testimonial
Offer
Response
Dan Koe's landing page is a great example. It shows PASTOR frame-by-frame.
3. Before — After — Bridge
Before-after-bridge is a copywriting framework that draws attention and shows value quickly.
This framework highlights:
where you are
where you want to be
how to get there
Works great for: Email threads/landing pages
Zain Kahn utilizes this framework to write viral threads.
4. Q.U.E.S.T
QUEST is about empathetic writing. You know their issues, obstacles, and headaches. This allows coverups.
QUEST:
Qualifies
Understands
Educates
Stimulates
Transitions
Tom Hirst's landing page uses the QUEST framework.
5. The 4P’s model
The 4P’s approach pushes your prospect to action. It educates and persuades quickly.
4Ps:
The problem the visitor is dealing with
The promise that will help them
The proof the promise works
A push towards action
Mark Manson is a bestselling author, digital creator, and pop-philosopher. He's also a great copywriter, and his membership offer uses the 4P’s framework.
6. Problem — Agitate — Solution (P.A.S)
Up-and-coming marketers should understand problem-agitate-solution copywriting. Once you understand one structure, others are easier. It drives passion and presents a clear solution.
PAS outlines:
The issue the visitor is having
It then intensifies this issue through emotion.
finally offers an answer to that issue (the offer)
The customer's story loops. Nicolas Cole and Dickie Bush use PAS to promote Ship 30 for 30.
7. Star — Story — Solution (S.S.S)
PASTOR + PAS = star-solution-story. Like PAS, it employs stories to persuade.
S.S.S. is effective storytelling:
Star: (Person had a problem)
Story: (until they had a breakthrough)
Solution: (That created a transformation)
Ali Abdaal is a YouTuber with a great S.S.S copy.
8. Attention — Interest — Desire — Action
AIDA is another classic. This copywriting framework is great for fast-paced environments (think all digital content on Linkedin, Twitter, Medium, etc.).
It works with:
Page landings
writing on thread
Email
It's a good structure since it's concise, attention-grabbing, and action-oriented.
Shane Martin, Twitter's creator, uses this approach to create viral content.
TL;DR
8 copywriting frameworks that teach marketing better than a four-year degree
Feature-advantage-benefit
Before-after-bridge
Star-story-solution
P.A.S.T.O.R
Q.U.E.S.T
A.I.D.A
P.A.S
4P’s
Francesca Furchtgott
3 years ago
Giving customers what they want or betraying the values of the brand?
A J.Crew collaboration for fashion label Eveliina Vintage is not a paradox; it is a solution.
Eveliina Vintage's capsule collection debuted yesterday at J.Crew. This J.Crew partnership stopped me in my tracks.
Eveliina Vintage sells vintage goods. Eeva Musacchia founded the shop in Finland in the 1970s. It's recognized for its one-of-a-kind slip dresses from the 1930s and 1940s.
I wondered why a vintage brand would partner with a mass shop. Fast fashion against vintage shopping? Will Eveliina Vintages customers be turned off?
But Eveliina Vintages customers don't care about sustainability. They want Eveliina's Instagram look. Eveliina Vintage collaborated with J.Crew to give customers what they wanted: more Eveliina at a lower price.
Vintage: A Fashion Option That Is Eco-Conscious
Secondhand shopping is a trendy response to quick fashion. J.Crew releases hundreds of styles annually. Waste and environmental damage have been criticized. A pair of jeans requires 1,800 gallons of water. J.Crew's limited-time deals promote more purchases. J.Crew items are likely among those Americans wear 7 times before discarding.
Consumers and designers have emphasized sustainability in recent years. Stella McCartney and Eileen Fisher are popular eco-friendly brands. They've also flocked to ThredUp and similar sites.
Gap, Levis, and Allbirds have listened to consumer requests. They promote recycling, ethical sourcing, and secondhand shopping.
Secondhand shoppers feel good about reusing and recycling clothing that might have ended up in a landfill.
Eco-conscious fashionistas shop vintage. These shoppers enjoy the thrill of the hunt (that limited-edition Chanel bag!) and showing off a unique piece (nobody will have my look!). They also reduce their environmental impact.
Is Eveliina Vintage capitalizing on an aesthetic or is it a sustainable brand?
Eveliina Vintage emphasizes environmental responsibility. Vogue's Amanda Musacchia emphasized sustainability. Amanda, founder Eeva's daughter, is a company leader.
But Eveliina's press message doesn't address sustainability, unlike Instagram. Scarcity and fame rule.
Eveliina Vintages Instagram has see-through dresses and lace-trimmed slip dresses. Celebrities and influencers are often photographed in Eveliina's apparel, which has 53,000+ followers. Vogue appreciates Eveliina's style. Multiple publications discuss Alexa Chung's Eveliina dress.
Eveliina Vintage markets its one-of-a-kind goods. It teases future content, encouraging visitors to return. Scarcity drives demand and raises clothing prices. One dress is $1,600+, but most are $500-$1,000.
The catch: Eveliina can't monetize its expanding popularity due to exorbitant prices and limited quantity. Why?
Most people struggle to pay for their clothing. But Eveliina Vintage lacks those more affordable entry-level products, in contrast to other luxury labels that sell accessories or perfume.
Many people have trouble fitting into their clothing. The bodies of most women in the past were different from those for which vintage clothing was designed. Each Eveliina dress's specific measurements are mentioned alongside it. Be careful, you can fall in love with an ill-fitting dress.
No matter how many people can afford it and fit into it, there is only one item to sell. To get the item before someone else does, those people must be on the Eveliina Vintage website as soon as it becomes available.
A Way for Eveliina Vintage to Make Money (and Expand) with J.Crew Its following
Eveliina Vintages' cooperation with J.Crew makes commercial sense.
This partnership spreads Eveliina's style. Slightly better pricing The $390 outfits have multicolored slips and gauzy cotton gowns. Sizes range from 00 to 24, which is wider than vintage racks.
Eveliina Vintage customers like the combination. Excited comments flood the brand's Instagram launch post. Nobody is mocking the 50-year-old vintage brand's fast-fashion partnership.
Vintage may be a sustainable fashion trend, but that's not why Eveliina's clients love the brand. They only care about the old look.
And that is a tale as old as fashion.
Rachel Greenberg
3 years ago
6 Causes Your Sales Pitch Is Unintentionally Repulsing Customers
Skip this if you don't want to discover why your lively, no-brainer pitch isn't making $10k a month.
You don't want to be repulsive as an entrepreneur or anyone else. Making friends, influencing people, and converting strangers into customers will be difficult if your words evoke disgust, distrust, or disrespect. You may be one of many entrepreneurs who do this obliviously and involuntarily.
I've had to master selling my skills to recruiters (to land 6-figure jobs on Wall Street), selling companies to buyers in M&A transactions, and selling my own companies' products to strangers-turned-customers. I probably committed every cardinal sin of sales repulsion before realizing it was me or my poor salesmanship strategy.
If you're launching a new business, frustrated by low conversion rates, or just curious if you're repelling customers, read on to identify (and avoid) the 6 fatal errors that can kill any sales pitch.
1. The first indication
So many people fumble before they even speak because they assume their role is to convince the buyer. In other words, they expect to pressure, arm-twist, and combat objections until they convert the buyer. Actuality, the approach stinks of disgust, and emotionally-aware buyers would feel "gross" immediately.
Instead of trying to persuade a customer to buy, ask questions that will lead them to do so on their own. When a customer discovers your product or service on their own, they need less outside persuasion. Why not position your offer in a way that leads customers to sell themselves on it?
2. A flawless performance
Are you memorizing a sales script, tweaking video testimonials, and expunging historical blemishes before hitting "publish" on your new campaign? If so, you may be hurting your conversion rate.
Perfection may be a step too far and cause prospects to mistrust your sincerity. Become a great conversationalist to boost your sales. Seriously. Being charismatic is hard without being genuine and showing a little vulnerability.
People like vulnerability, even if it dents your perfect facade. Show the customer's stuttering testimonial. Open up about your or your company's past mistakes (and how you've since improved). Make your sales pitch a two-way conversation. Let the customer talk about themselves to build rapport. Real people sell, not canned scripts and movie-trailer testimonials.
If marketing or sales calls feel like a performance, you may be doing something wrong or leaving money on the table.
3. Your greatest phobia
Three minutes into prospect talks, I'd start sweating. I was talking 100 miles per hour, covering as many bases as possible to avoid the ones I feared. I knew my then-offering was inadequate and my firm had fears I hadn't addressed. So I word-vomited facts, features, and everything else to avoid the customer's concerns.
Do my prospects know I'm insecure? Maybe not, but it added an unnecessary and unhelpful layer of paranoia that kept me stressed, rushed, and on edge instead of connecting with the prospect. Skirting around a company, product, or service's flaws or objections is a poor, temporary, lazy (and cowardly) decision.
How can you project confidence and trust if you're afraid? Before you make another sales call, face your shortcomings, weak points, and objections. Your company won't be everyone's cup of tea, but you should have answers to every question or objection. You should be your business's top spokesperson and defender.
4. The unintentional apologies
Have you ever begged for a sale? I'm going to say no, however you may be unknowingly emitting sorry, inferior, insecure energy.
Young founders, first-time entrepreneurs, and those with severe imposter syndrome may elevate their target customer. This is common when trying to get first customers for obvious reasons.
Since you're truly new at this, you naturally lack experience.
You don't have the self-confidence boost of thousands or hundreds of closed deals or satisfied client results to remind you that your good or service is worthwhile.
Getting those initial few clients seems like the most difficult task, as if doing so will decide the fate of your company as a whole (it probably won't, and you shouldn't actually place that much emphasis on any one transaction).
Customers can smell fear, insecurity, and anxiety just like they can smell B.S. If you believe your product or service improves clients' lives, selling it should feel like a benevolent act of service, not a sleazy money-grab. If you're a sincere entrepreneur, prospects will believe your proposition; if you're apprehensive, they'll notice.
Approach every sale as if you're fine with or without it. This has improved my salesmanship, marketing skills, and mental health. When you put pressure on yourself to close a sale or convince a difficult prospect "or else" (your company will fail, your rent will be late, your electricity will be cut), you emit desperation and lower the quality of your pitch. There's no point.
5. The endless promises
We've all read a million times how to answer or disprove prospects' arguments and add extra incentives to speed or secure the close. Some objections shouldn't be refuted. What if I told you not to offer certain incentives, bonuses, and promises? What if I told you to walk away from some prospects, even if it means losing your sales goal?
If you market to enough people, make enough sales calls, or grow enough companies, you'll encounter prospects who can't be satisfied. These prospects have endless questions, concerns, and requests for more, more, more that you'll never satisfy. These people are a distraction, a resource drain, and a test of your ability to cut losses before they erode your sanity and profit margin.
To appease or convert these insatiably needy, greedy Nellies into customers, you may agree with or acquiesce to every request and demand — even if you can't follow through. Once you overpromise and answer every hole they poke, their trust in you may wane quickly.
Telling a prospect what you can't do takes courage and integrity. If you're honest, upfront, and willing to admit when a product or service isn't right for the customer, you'll gain respect and positive customer experiences. Sometimes honesty is the most refreshing pitch and the deal-closer.
6. No matter what
Have you ever said, "I'll do anything to close this sale"? If so, you've probably already been disqualified. If a prospective customer haggles over a price, requests a discount, or continues to wear you down after you've made three concessions too many, you have a metal hook in your mouth, not them, and it may not end well. Why?
If you're so willing to cut a deal that you cut prices, comp services, extend payment plans, waive fees, etc., you betray your own confidence that your product or service was worth the stated price. They wonder if anyone is paying those prices, if you've ever had a customer (who wasn't a blood relative), and if you're legitimate or worth your rates.
Once a prospect senses that you'll do whatever it takes to get them to buy, their suspicions rise and they wonder why.
Why are you cutting pricing if something is wrong with you or your service?
Why are you so desperate for their sale?
Why aren't more customers waiting in line to pay your pricing, and if they aren't, what on earth are they doing there?
That's what a prospect thinks when you reveal your lack of conviction, desperation, and willingness to give up control. Some prospects will exploit it to drain you dry, while others will be too frightened to buy from you even if you paid them.
Walking down a two-way street. Be casual.
If we track each act of repulsion to an uneasiness, fear, misperception, or impulse, it's evident that these sales and marketing disasters were forced communications. Stiff, imbalanced, divisive, combative, bravado-filled, and desperate. They were unnatural and accepted a power struggle between two sparring, suspicious, unequal warriors, rather than a harmonious oneness of two natural, but opposite parties shaking hands.
Sales should be natural, harmonious. Sales should feel good for both parties, not like one party is having their arm twisted.
You may be doing sales wrong if it feels repulsive, icky, or degrading. If you're thinking cringe-worthy thoughts about yourself, your product, service, or sales pitch, imagine what you're projecting to prospects. Don't make it unpleasant, repulsive, or cringeworthy.
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Stephen Moore
3 years ago
Adam Neumanns is working to create the future of living in a classic example of a guy failing upward.
The comeback tour continues…
First, he founded a $47 billion co-working company (sorry, a “tech company”).
He established WeLive to disrupt apartment life.
Then he created WeGrow, a school that tossed aside the usual curriculum to feed children's souls and release their potential.
He raised the world’s consciousness.
Then he blew it all up (without raising the world’s consciousness). (He bought a wave pool.)
Adam Neumann's WeWork business burned investors' money. The founder sailed off with unimaginable riches, leaving long-time employees with worthless stocks and the company bleeding money. His track record, which includes a failing baby clothing company, should have stopped investors cold.
Once the dust settled, folks went on. We forgot about the Neumanns! We forgot about the private jets, company retreats, many houses, and WeWork's crippling. In that moment, the prodigal son of entrepreneurship returned, choosing the blockchain as his industry. His homecoming tour began with Flowcarbon, which sold Goddess Nature Tokens to lessen companies' carbon footprints.
Did it work?
Of course not.
Despite receiving $70 million from Andreessen Horowitz's a16z, the project has been halted just two months after its announcement.
This triumph should lower his grade.
Neumann seems to have moved on and has another revolutionary idea for the future of living. Flow (not Flowcarbon) aims to help people live in flow and will launch in 2023. It's the classic Neumann pitch: lofty goals, yogababble, and charisma to attract investors.
It's a winning formula for one investment fund. a16z has backed the project with its largest single check, $350 million. It has a splash page and 3,000 rental units, but is valued at over $1 billion. The blog post praised Neumann for reimagining the office and leading a paradigm-shifting global company.
Flow's mission is to solve the nation's housing crisis. How? Idk. It involves offering community-centric services in apartment properties to the same remote workforce he once wooed with free beer and a pingpong table. Revolutionary! It seems the goal is to apply WeWork's goals of transforming physical spaces and building community to apartments to solve many of today's housing problems.
The elevator pitch probably sounded great.
At least a16z knows it's a near-impossible task, calling it a seismic shift. Marc Andreessen opposes affordable housing in his wealthy Silicon Valley town. As details of the project emerge, more investors will likely throw ethics and morals out the window to go with the flow, throwing money at a man known for burning through it while building toxic companies, hoping he can bank another fantasy valuation before it all crashes.
Insanity is repeating the same action and expecting a different result. Everyone on the Neumann hype train needs to sober up.
Like WeWork, this venture Won’tWork.
Like before, it'll cause a shitstorm.
Max Parasol
3 years ago
Are DAOs the future or just a passing fad?
How do you DAO? Can DAOs scale?
DAO: Decentralized Autonomous. Organization.
“The whole phrase is a misnomer. They're not decentralized, autonomous, or organizations,” says Monsterplay blockchain consultant David Freuden.
As part of the DAO initiative, Freuden coauthored a 51-page report in May 2020. “We need DAOs,” he says. “‘Shareholder first' is a 1980s/90s concept. Profits became the focus, not products.”
His predictions for DAOs have come true nearly two years later. DAOs had over 1.6 million participants by the end of 2021, up from 13,000 at the start of the year. Wyoming, in the US, will recognize DAOs and the Marshall Islands in 2021. Australia may follow that example in 2022.
But what is a DAO?
Members buy (or are rewarded with) governance tokens to vote on how the DAO operates and spends its money. “DeFi spawned DAOs as an investment vehicle. So a DAO is tokenomics,” says Freuden.
DAOs are usually built around a promise or a social cause, but they still want to make money. “If you can't explain why, the DAO will fail,” he says. “A co-op without tokenomics is not a DAO.”
Operating system DAOs, protocol DAOs, investment DAOs, grant DAOs, service DAOs, social DAOs, collector DAOs, and media DAOs are now available.
Freuden liked the idea of people rallying around a good cause. Speculators and builders make up the crypto world, so it needs a DAO for them.
,Speculators and builders, or both, have mismatched expectations, causing endless, but sometimes creative friction.
Organisms that boost output
Launching a DAO with an original product such as a cryptocurrency, an IT protocol or a VC-like investment fund like FlamingoDAO is common. DAOs enable distributed open-source contributions without borders. The goal is vital. Sometimes, after a product is launched, DAOs emerge, leaving the company to eventually transition to a DAO, as Uniswap did.
Doing things together is a DAO. So it's a way to reward a distributed workforce. DAOs are essentially productivity coordination organisms.
“Those who work for the DAO make permissionless contributions and benefit from fragmented employment,” argues Freuden. DAOs are, first and foremost, a new form of cooperation.
DAO? Distributed not decentralized
In decentralized autonomous organizations, words have multiple meanings. DAOs can emphasize one aspect over another. Autonomy is a trade-off for decentralization.
DAOstack CEO Matan Field says a DAO is a distributed governance system. Power is shared. However, there are two ways to understand a DAO's decentralized nature. This clarifies the various DAO definitions.
A decentralized infrastructure allows a DAO to be decentralized. It could be created on a public permissionless blockchain to prevent a takeover.
As opposed to a company run by executives or shareholders, a DAO is distributed. Its leadership does not wield power
Option two is clearly distributed.
But not all of this is “automated.”
Think quorum, not robot.
DAOs can be autonomous in the sense that smart contracts are self-enforcing and self-executing. So every blockchain transaction is a simplified smart contract.
Dao landscape
The DAO landscape is evolving.
Consider how Ethereum's smart contracts work. They are more like self-executing computer code, which Vitalik Buterin calls “persistent scripts”.
However, a DAO is self-enforcing once its members agree on its rules. As such, a DAO is “automated upon approval by the governance committee.” This distinguishes them from traditional organizations whose rules must be interpreted and applied.
Why a DAO? They move fast
A DAO can quickly adapt to local conditions as a governance mechanism. It's a collaborative decision-making tool.
Like UkraineDAO, created in response to Putin's invasion of Ukraine by Ukrainian expat Alona Shevchenko, Nadya Tolokonnikova, Trippy Labs, and PleasrDAO. The DAO sought to support Ukrainian charities by selling Ukrainian flag NFTs. With a single mission, a DAO can quickly raise funds for a country accepting crypto where banks are distrusted.
This could be a watershed moment for DAOs.
ConstitutionDAO was another clever use case for DAOs for Freuden. In a failed but “beautiful experiment in a single-purpose DAO,” ConstitutionDAO tried to buy a copy of the US Constitution from a Sotheby's auction. In November 2021, ConstitutionDAO raised $47 million from 19,000 people, but a hedge fund manager outbid them.
Contributions were returned or lost if transactional gas fees were too high. The ConstitutionDAO, as a “beautiful experiment,” proved exceptionally fast at organizing and crowdsourcing funds for a specific purpose.
We may soon be applauding UkraineDAO's geopolitical success in support of the DAO concept.
Some of the best use cases for DAOs today, according to Adam Miller, founder of DAOplatform.io and MIDAO Directory Services, involve DAO structures.
That is, a “flat community is vital.” Prototyping by the crowd is a good example. To succeed, members must be enthusiastic about DAOs as an alternative to starting a company. Because DAOs require some hierarchy, he agrees that "distributed is a better acronym."
Miller sees DAOs as a “new way of organizing people and resources.” He started DAOplatform.io, a DAO tooling advisery that is currently transitioning to a DAO due to the “woeful tech options for running a DAO,” which he says mainly comprises of just “multisig admin keys and a voting system.” So today he's advising on DAO tech stacks.
Miller identifies three key elements.
Tokenization is a common method and tool. Second, governance mechanisms connected to the DAO's treasury. Lastly, community.”
How a DAO works...
They can be more than glorified Discord groups if they have a clear mission. This mission is a mix of financial speculation and utopianism. The spectrum is vast.
The founder of Dash left the cryptocurrency project in 2017. It's the story of a prophet without an heir. So creating a global tokenized evangelical missionary community via a DAO made sense.
Evan Duffield, a “libertarian/anarchist” visionary, forked Bitcoin in January 2014 to make it instant and essentially free. He went away for a while, and DASH became a DAO.
200,000 US retailers, including Walmart and Barnes & Noble, now accept Dash as payment. This payment system works like a gift card.
Arden Goldstein, Dash's head of crypto, DAO, and blockchain marketing, claims Dash is the “first successful DAO.” It was founded in 2016 and disbanded after a hack, an Ethereum hard fork and much controversy. But what are the success metrics?
Crypto success is measured differently, says Goldstein. To achieve common goals, people must participate or be motivated in a healthy DAO. People are motivated to complete tasks in a successful DAO. And, crucially, when tasks get completed.
“Yes or no, 1 or 0, voting is not a new idea. The challenge is getting people to continue to participate and keep building a community.” A DAO motivates volunteers: Nothing keeps people from building. The DAO “philosophy is old news. You need skin in the game to play.”
MasterNodes must stake 1000 Dash. Those members are rewarded with DASH for marketing (and other tasks). It uses an outsourced team to onboard new users globally.
Joining a DAO is part of the fun of meeting crazy or “very active” people on Discord. No one gets fired (usually). If your work is noticed, you may be offered a full-time job.
DAO community members worldwide are rewarded for brand building. Dash is also a great product for developing countries with high inflation and undemocratic governments. The countries with the most Dash DAO members are Russia, Brazil, Venezuela, India, China, France, Italy, and the Philippines.
Grassroots activism makes this DAO work. A DAO is local. Venezuelans can't access Dash.org, so DAO members help them use a VPN. DAO members are investors, fervent evangelicals, and local product experts.
Every month, proposals and grant applications are voted on via the Dash platform. However, the DAO may decide not to fund you. For example, the DAO once hired a PR firm, but the community complained about the lack of press coverage. This raises a great question: How are real-world contractual obligations met by a DAO?
Does the DASH DAO work?
“I see the DAO defund projects I thought were valuable,” Goldstein says. Despite working full-time, I must submit a funding proposal. “Much faster than other companies I've worked on,” he says.
Dash DAO is a headless beast. Ryan Taylor is the CEO of the company overseeing the DASH Core Group project.
The issue is that “we don't know who has the most tokens [...] because we don't know who our customers are.” As a result, “the loudest voices usually don't have the most MasterNodes and aren't the most invested.”
Goldstein, the only female in the DAO, says she worked hard. “I was proud of the DAO when I made the logo pink for a day and got great support from the men.” This has yet to entice a major influx of female DAO members.
Many obstacles stand in the way of utopian dreams.
Governance problems remain
And what about major token holders behaving badly?
In early February, a heated crypto Twitter debate raged on about inclusion, diversity, and cancel culture in relation to decentralized projects. In this case, the question was how a DAO addresses alleged inappropriate behavior.
In a corporation, misconduct can result in termination. In a DAO, founders usually hold a large number of tokens and the keys to the blockchain (multisignature) or otherwise.
Brantly Millegan, the director of operations of Ethereum Name Service (ENS), made disparaging remarks about the LGBTQ community and other controversial topics. The screenshotted comments were made in 2016 and brought to the ENS board's attention in early 2022.
His contract with ENS has expired. But what of his large DAO governance token holdings?
Members of the DAO proposed a motion to remove Millegan from the DAO. His “delegated” votes net 370,000. He was and is the DAO's largest delegate.
What if he had refused to accept the DAO's decision?
Freuden says the answer is not so simple.
“Can a DAO kick someone out who built the project?”
The original mission “should be dissolved” if it no longer exists. “Does a DAO fail and return the money? They must r eturn the money with interest if the marriage fails.”
Before an IPO, VCs might try to remove a problematic CEO.
While DAOs use treasury as a governance mechanism, it is usually controlled (at least initially) by the original project creators. Or, in the case of Uniswap, the venture capital firm a16z has so much voting power that it has delegated it to student-run blockchain organizations.
So, can DAOs really work at scale? How to evolve voting paradigms beyond token holdings?
The whale token holder issue has some solutions. Multiple tokens, such as a utility token on top of a governance token, and quadratic voting for whales, are now common. Other safeguards include multisignature blockchain keys and decision time locks that allow for any automated decision to be made. The structure of each DAO will depend on the assets at stake.
In reality, voter turnout is often a bigger issue.
Is DAO governance scalable?
Many DAOs have low participation. Due to a lack of understanding of technology, apathy, or busy lives. “The bigger the DAO, the fewer voters who vote,” says Freuden.
Freuden's report cites British anthropologist Dunbar's Law, who argued that people can only maintain about 150 relationships.
"As the DAO grows in size, the individual loses influence because they perceive their voting power as being diminished or insignificant. The Ringelmann Effect and Dunbar's Rule show that as a group grows in size, members become lazier, disenfranchised, and detached.
Freuden says a DAO requires “understanding human relationships.” He believes DAOs work best as investment funds rooted in Cryptoland and small in scale. In just three weeks, SyndicateDAO enabled the creation of 450 new investment group DAOs.
Due to SEC regulations, FlamingoDAO, a famous NFT curation investment DAO, could only have 100 investors. The “LAO” is a member-directed venture capital fund and a US LLC. To comply with US securities law, they only allow 100 members with a 120ETH minimum staking contribution.
But how did FlamingoDAO make investment decisions? How often did all 70 members vote? Art and NFTs are highly speculative.
So, investment DAOs are thought to work well in a small petri dish environment. This is due to a crypto-native club's pooled capital (maximum 7% per member) and crowdsourced knowledge.
While scalability is a concern, each DAO will operate differently depending on the goal, technology stage, and personalities. Meetups and hackathons are common ways for techies to collaborate on a cause or test an idea. But somebody still organizes the hack.
Holographic consensus voting
But clever people are working on creative solutions to every problem.
Miller of DAOplatform.io cites DXdao as a successful DAO. Decentralized product and service creator DXdao runs the DAO entirely on-chain. “You earn voting rights by contributing to the community.”
DXdao, a DAOstack fork, uses holographic consensus, a voting algorithm invented by DAOstack founder Matan Field. The system lets a random or semi-random subset make group-wide decisions.
By acting as a gatekeeper for voters, DXdao's Luke Keenan explains that “a small predictions market economy emerges around the likely outcome of a proposal as tokens are staked on it.” Also, proposals that have been financially boosted have fewer requirements to be successful, increasing system efficiency.” DXdao “makes decisions by removing voting power as an economic incentive.”
Field explains that holographic consensus “does not require a quorum to render a vote valid.”
“Rather, it provides a parallel process. It is a game played (for profit) by ‘predictors' who make predictions about whether or not a vote will be approved by the voters. The voting process is valid even when the voting quorum is low if enough stake is placed on the outcome of the vote.
“In other words, a quorum is not a scalable DAO governance strategy,” Field says.
You don't need big votes on everything. If only 5% vote, fine. To move significant value or make significant changes, you need a longer voting period (say 30 days) and a higher quorum,” says Miller.
Clearly, DAOs are maturing. The emphasis is on tools like Orca and processes that delegate power to smaller sub-DAOs, committees, and working groups.
Miller also claims that “studies in psychology show that rewarding people too much for volunteering disincentivizes them.” So, rather than giving out tokens for every activity, you may want to offer symbolic rewards like POAPs or contributor levels.
“Free lunches are less rewarding. Random rewards can boost motivation.”
Culture and motivation
DAOs (and Web3 in general) can give early adopters a sense of ownership. In theory, they encourage early participation and bootstrapping before network effects.
"A double-edged sword," says Goldstein. In the developing world, they may not be fully scalable.
“There must always be a leader,” she says. “People won't volunteer if they don't want to.”
DAO members sometimes feel entitled. “They are not the boss, but they think they should be able to see my calendar or get a daily report,” Goldstein gripes. Say, “I own three MasterNodes and need to know X, Y, and Z.”
In most decentralized projects, strong community leaders are crucial to influencing culture.
Freuden says “the DAO's community builder is the cryptoland influencer.” They must “disseminate the DAO's culture, cause, and rally the troops” in English, not tech.
They must keep members happy.
So the community builder is vital. Building a community around a coin that promises riches is simple, but keeping DAO members motivated is difficult.
It's a human job. But tools like SourceCred or coordinate that measure contributions and allocate tokens are heavily marketed. Large growth funds/community funds/grant programs are common among DAOs.
The Future?
Onboarding, committed volunteers, and an iconic community builder may be all DAOs need.
It takes a DAO just one day to bring together a passionate (and sometimes obsessive) community. For organizations with a common goal, managing stakeholder expectations is critical.
A DAO's core values are community and cause, not scalable governance. “DAOs will work at scale like gaming communities, but we will have sub-DAOs everywhere like committees,” says Freuden.
So-called holographic consensuses “can handle, in principle, increasing rates of proposals by turning this tension between scale and resilience into an economical cost,” Field writes. Scalability is not guaranteed.
The DAO's key innovation is the fragmented workplace. “Voting is a subset of engagement,” says Freuden. DAO should allow for permissionless participation and engagement. DAOs allow for remote work.”
In 20 years, DAOs may be the AI-powered self-organizing concept. That seems far away now. But a new breed of productivity coordination organisms is maturing.
Ben
3 years ago
The Real Value of Carbon Credit (Climate Coin Investment)
Disclaimer : This is not financial advice for any investment.
TL;DR
You might not have realized it, but as we move toward net zero carbon emissions, the globe is already at war.
According to the Paris Agreement of COP26, 64% of nations have already declared net zero, and the issue of carbon reduction has already become so important for businesses that it affects their ability to survive. Furthermore, the time when carbon emission standards will be defined and controlled on an individual basis is becoming closer.
Since 2017, the market for carbon credits has experienced extraordinary expansion as a result of widespread talks about carbon credits. The carbon credit market is predicted to expand much more once net zero is implemented and carbon emission rules inevitably tighten.
Hello! Ben here from Nonce Classic. Nonce Classic has recently confirmed the tremendous growth potential of the carbon credit market in the midst of a major trend towards the global goal of net zero (carbon emissions caused by humans — carbon reduction by humans = 0 ). Moreover, we too believed that the questions and issues the carbon credit market suffered from the last 30–40yrs could be perfectly answered through crypto technology and that is why we have added a carbon credit crypto project to the Nonce Classic portfolio. There have been many teams out there that have tried to solve environmental problems through crypto but very few that have measurable experience working in the carbon credit scene. Thus we have put in our efforts to find projects that are not crypto projects created for the sake of issuing tokens but projects that pragmatically use crypto technology to combat climate change by solving problems of the current carbon credit market. In that process, we came to hear of Climate Coin, a veritable carbon credit crypto project, and us Nonce Classic as an accelerator, have begun contributing to its growth and invested in its tokens. Starting with this article, we plan to publish a series of articles explaining why the carbon credit market is bullish, why we invested in Climate Coin, and what kind of project Climate Coin is specifically. In this first article let us understand the carbon credit market and look into its growth potential! Let’s begin :)
The Unavoidable Entry of the Net Zero Era
Net zero means... Human carbon emissions are balanced by carbon reduction efforts. A non-environmentalist may find it hard to accept that net zero is attainable by 2050. Global cooperation to save the earth is happening faster than we imagine.
In the Paris Agreement of COP26, concluded in Glasgow, UK on Oct. 31, 2021, nations pledged to reduce worldwide yearly greenhouse gas emissions by more than 50% by 2030 and attain net zero by 2050. Governments throughout the world have pledged net zero at the national level and are holding each other accountable by submitting Nationally Determined Contributions (NDC) every five years to assess implementation. 127 of 198 nations have declared net zero.
Each country's 1.5-degree reduction plans have led to carbon reduction obligations for companies. In places with the strictest environmental regulations, like the EU, companies often face bankruptcy because the cost of buying carbon credits to meet their carbon allowances exceeds their operating profits. In this day and age, minimizing carbon emissions and securing carbon credits are crucial.
Recent SEC actions on climate change may increase companies' concerns about reducing emissions. The SEC required all U.S. stock market companies to disclose their annual greenhouse gas emissions and climate change impact on March 21, 2022. The SEC prepared the proposed regulation through in-depth analysis and stakeholder input since last year. Three out of four SEC members agreed that it should pass without major changes. If the regulation passes, it will affect not only US companies, but also countless companies around the world, directly or indirectly.
Even companies not listed on the U.S. stock market will be affected and, in most cases, required to disclose emissions. Companies listed on the U.S. stock market with significant greenhouse gas emissions or specific targets are subject to stricter emission standards (Scope 3) and disclosure obligations, which will magnify investigations into all related companies. Greenhouse gas emissions can be calculated three ways. Scope 1 measures carbon emissions from a company's facilities and transportation. Scope 2 measures carbon emissions from energy purchases. Scope 3 covers all indirect emissions from a company's value chains.
The SEC's proposed carbon emission disclosure mandate and regulations are one example of how carbon credit policies can cross borders and affect all parties. As such incidents will continue throughout the implementation of net zero, even companies that are not immediately obligated to disclose their carbon emissions must be prepared to respond to changes in carbon emission laws and policies.
Carbon reduction obligations will soon become individual. Individual consumption has increased dramatically with improved quality of life and convenience, despite national and corporate efforts to reduce carbon emissions. Since consumption is directly related to carbon emissions, increasing consumption increases carbon emissions. Countries around the world have agreed that to achieve net zero, carbon emissions must be reduced on an individual level. Solutions to individual carbon reduction are being actively discussed and studied under the term Personal Carbon Trading (PCT).
PCT is a system that allows individuals to trade carbon emission quotas in the form of carbon credits. Individuals who emit more carbon than their allotment can buy carbon credits from those who emit less. European cities with well-established carbon credit markets are preparing for net zero by conducting early carbon reduction prototype projects. The era of checking product labels for carbon footprints, choosing low-emissions transportation, and worrying about hot shower emissions is closer than we think.
The Market for Carbon Credits Is Expanding Fearfully
Compliance and voluntary carbon markets make up the carbon credit market.
A Compliance Market enforces carbon emission allowances for actors. Companies in industries that previously emitted a lot of carbon are included in the mandatory carbon market, and each government receives carbon credits each year. If a company's emissions are less than the assigned cap and it has extra carbon credits, it can sell them to other companies that have larger emissions and require them (Cap and Trade). The annual number of free emission permits provided to companies is designed to decline, therefore companies' desire for carbon credits will increase. The compliance market's yearly trading volume will exceed $261B in 2020, five times its 2017 level.
In the Voluntary Market, carbon reduction is voluntary and carbon credits are sold for personal reasons or to build market participants' eco-friendly reputations. Even if not in the compliance market, it is typical for a corporation to be obliged to offset its carbon emissions by acquiring voluntary carbon credits. When a company seeks government or company investment, it may be denied because it is not net zero. If a significant shareholder declares net zero, the companies below it must execute it. As the world moves toward ESG management, becoming an eco-friendly company is no longer a strategic choice to gain a competitive edge, but an important precaution to not fall behind. Due to this eco-friendly trend, the annual market volume of voluntary emission credits will approach $1B by November 2021. The voluntary credit market is anticipated to reach $5B to $50B by 2030. (TSCVM 2021 Report)
In conclusion
This article analyzed how net zero, a target promised by countries around the world to combat climate change, has brought governmental, corporate, and human changes. We discussed how these shifts will become more obvious as we approach net zero, and how the carbon credit market would increase exponentially in response. In the following piece, let's analyze the hurdles impeding the carbon credit market's growth, how the project we invested in tries to tackle these issues, and why we chose Climate Coin. Wait! Jim Skea, co-chair of the IPCC working group, said,
“It’s now or never, if we want to limit global warming to 1.5°C” — Jim Skea
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