On July 20, Web3 Journal writer and defi tinkerer Andrew Lee announced his latest experiment: Karma DAO. An exclusive Telegram group that anyone can join provided they own 200 KARMA, the project’s native token.
This being July, aka Peak Defi, what happened next was all too predictable: the crypto community piled in, the KARMA pulled a 350x and suddenly the price of entry to the coolest Telegram group in crypto was over $2,000. But that’s only half the story. While Karma DAO, like many cleverly gamified projects, has gotten too big, too fast, the market action is a distraction for a fascinating social experiment that’s taking place.
Succeed or fail, Karma DAO is pioneering a new way of forming incentivized communities that collaborate for the collective good.
The YFI of DAOs
As Andrew Lee explains, the goal with Karma DAO is:
“To have a likeminded peer group in Ethereum as well the greater crypto space adopt a networking group that values karma, which includes the qualities of being mutually helpful to others, mutually value-adding, giving to all and being kind.”
This financial barrier to entry deters low level scammers and chancers, granting the DAO an exclusivity that’s reminiscent of Silicon Valley networking app Clubhouse, while its tokenomics – or ponzinomics, if you want to be cynical – have echoes of defi sensation YFI.
“I had the opportunity to work for angel investor Jason Calacanis out of college and I saw how vital it was to surround one’s self with the right people to learn about new opportunities and to be near the people that can help you be part of them,” Andrew said. “In the spirit of encouraging learning growth and potential investment opportunities for the angel investors in the DAO, we will be inviting several teams building interesting projects in DeFi, DAOs and blockchain to present what they are working on to the group.”
Who’s in the Karma Club?
So far, almost 200 curious souls have joined the DAO and begun exchanging ideas in its closed Telegram group. They’re made up of the usual suspects you’d expect: traders, analysts, defi geeks, crypto entrepreneurs, marketers, writers, and developers.
Conversation has been civil, enthusiasm high, and ideas have flown freely. As a decentralized autonomous organization, Karma is controlled by its members who are free to suggest improvements to its token model, preferred platform (there’s talk of migrating to Discord), and roadmap. The DAO might be Andrew Lee’s brainchild, but it’s now in the hands of the community, who can steer it in any direction they like – provided they can reach consensus.
As you would expect of such an ambitious social experiment, the project is still rough around the edges. Speculative trading of its token risks excluding all but the wealthiest of ethereans, while an influx of signups could skew the signal to noise ratio, causing valuable discourse to get lost in the mix. These teething problems are to be expected, and are not insurmountable. For example, the 200 KARMA token threshold to enter could be lowered, or dollar-pegged to prevent entry becoming off-limits to the majority.
It’s a delicate balancing act though: if Karma DAO continues growing at its current rate, it risks becoming a victim of its own success and degenerating into just another frantic crypto group.
The Crypto Community Is Watching
Whatever the fate of Karma, it’s a testbed for how future web3 networks might work: incentivized, collectivized, and socialized, with members working together for the good of the group. Even if egos end up getting in the way and dilution diminishes the ethos on which it was founded, Karma DAO won’t have been in vain.
There are some extremely clever concepts being trialled in the cryptosphere right now, and defi is its epicenter. Karma DAO is at the forefront of that trend, proving – like YFI – that a strong and highly motivated community is worth more than any VC raise or premine. The touch paper has been lit. Whatever happens next with Karma DAO, it won’t be dull.