Interview
Ian Lee: Why DAOs Will Replace Venture Capital; Biggest Threat to Web3 | 20VC #893
- Predicts the emergence of NFT-powered media and commerce platforms, such as versions of Spotify, Amazon, YouTube, and TikTok, within one to three years, accelerating previous decade-long estimates to potentially generate hundred billion to trillion dollar outcomes.
- Projects that over a five to ten-year-plus timescale, active native investors and those with genuine intent will dominate the Web3 economy, while short-term "tourists" and profit-seeking entities will eventually disappear or cause setbacks.
- Foresees that over 10 to 20+ year time spans, new markets created by DAOs will significantly outsize the existing traditional markets they are transforming.
- Anticipates a near-term (one to three years) trend of skeuomorphism where DAOs primarily operate by transforming existing legal structures, such as venture capital funds, rather than as purely novel entities.
- Envisions that within five to ten years, dozens or thousands of DAOs will operate at a scale managing billions of dollars in capital, moving beyond current single-entity levels like BitDAO.
- Identifies that current hurdles include poor user interfaces, complex crypto wallets, and a need for better infrastructure to enable billions of new users to access the technology.
- Notes that in the near and medium term, the industry faces persistent risks from short-term profit-seeking behaviors, regulatory challenges, hacks, and fund exploitation which may delay progress by several years.
- Expects that in the long run, projects designed to solve real societal needs will prove more resilient and ultimately succeed over systems driven by short-term gains or centralization of control.
- Predicts that Web3 will not become a completely separate entity from Web2 within five to ten years but will evolve as the next iteration of the internet with a mix of traditional VC structures and non-traditional community organizations.
- Recognizes a dual potential for Web3 to either decentralize ownership and wealth or, conversely, to centralize control and value if specific conditions are not met.
- Emphasizes that successful Web3 adoption requires building "best practices" where DAOs with explicit, specific mandates demonstrate greater staying power than those without clear goals.
- Stresses the necessity for new narratives and improved communication strategies to connect with individuals outside the current insider circle to cultivate the talent required for mainstream growth.