Over the past year, there has been a craze over Web3 – while terms like blockchain, cryptocurrency, and NFTs have started to become more commonplace, there is still a deeper rabbit hole of other innovative concepts. In particular, this article will focus on DAOs – specifically, what they are, how they function, how they are currently being implemented, and what the future holds.

First and foremost – what are DAOs? DAO stands for decentralized autonomous organization, and at glance, they are an internet-native group of like-minded individuals that are collectively owned and managed by its members. Generally speaking, they have built-in treasuries that are only accessible by group approval and decisions are governed by voting procedures and proposals.

Before diving a little further into DAOs, it is important to have a basic understanding of smart contracts. At a high level, smart contracts “are computer programs stored on the blockchain that allows us to convert traditional contracts into digital parallels… they behave exactly as programmed and cannot be changed”. This is important because it allows for the creation of a digital marketplace built on automatic, cryptographically secure processes that are stored online transparently. This means that a smart contract will execute on its own when the terms are met, allowing for outcomes to be easily predictable, safe and publicly available.

So what do smart contracts have anything to do with DAOs? In order for a DAO to function, it must be governed by a set of rules that every member abides to – in this case, it is the smart contract. Usually, the contract also includes the definition of their treasury, such that all transactions must be approved by the group, without a central authority (thus, decentralized). Additionally, it ensures that payments are automatically authorized when a vote passes. Finally, since the smart contract is placed on the Ethereum blockchain, it cannot be changed or tampered with by any individual. Below, is a chart that compares DAOs to a traditional organization, provided by Ethereum.org

Although this provides a brief overview of DAOs and what the purpose of the structure is, perhaps the easiest way to gain a better understanding of how they function is to explore case studies of how DAOs are being used today.

Case Studies:

First and foremost, we’ll take a look at dOrg, one of the first DAOs to be legally recognized as a LLC within the United States. Within an article detailed by TIME, several members of the DAO spoke to how their company differs from traditional LLCs. First and foremost, co-founder Ori Shimony describes that there are no general management positions (e.g. CEO, CFO) and roles are fluid, such that individuals have different jobs dependent on the project they are currently working on. Additionally, everyone who officially works at the company owns a share of its LLC and all company decisions are made based off of a voting procedure using tokens, which are given to members as they complete projects. While this may sound atypical and off-putting, members within the team explain that for the first time they have real ownership over their work, and the non-hierarchical structure of the company allows for specialists to take on leadership positions when the project requires it, allowing for multiple people to provide guidance and direction. Additionally, since DAOs function remotely, it allows for team members to have more autonomy over their work schedules and hours. Finally, dOrg is also transparent with their salaries with “all salaries and budgeting are publicly maintained on the blockchain; payout logs are visible to each member”, and each member has the option of being paid in cash or tokens. This is probably the gold standard of what Web3 enthusiasts envision DAOs to be and how they can disrupt traditional company structures.

Having said that however, DAOs can vary in many shapes and forms – what is definitively a DAO can be very confusing and its legality can also be called into question. Perhaps one of the most popular DAOs today is ApeCoin DAO. With the recent release of the Otherside NFT that exclusively accepted $APE, we saw prices skyrocket all the way to an all time high of $26 with a market cap of almost 7 billion dollars. The DAO’s membership is simple – holding any ApeCoin provides membership in the DAO, which allows for participating in idea and proposal submissions in addition to voting rights. While we haven’t explored DAOs that are based on tokenomics, this is something that is commonly seen with Web3. Details regarding the governance of the DAO along with proposal processes and voting mechanisms are described in higher detail on their website. More importantly however, is understanding some of the mechanics that make ApeCoin DAO different to other DAOs. First and foremost, 62% of the ApeCoin fund was distributed to holders of the BAYC/MAYC NFTs. Secondly, ApeCoin is tradable on Coinbase, FTX, along with a variety of other large exchanges, despite not being legally registered with the SEC. And finally, the APE foundation, led by Alexis Ohanian (Co-founder of Reddit), is a legal entity that “administers the decisions of ApeCoin DAO”. These differences have caused some to raise eyebrows surrounding the DAO. Under the guise of tokenomics and a DAO, $APE is not a security, despite having “stock vibes“, the DAO never promises profit to holders and states that “One APE equals one APE” and acts as a utility token as in-game currency for Animoca Brands’ Benji Bananas. While this may cause some to be concerned, SEC regulator William Hinman explained in 2018 that if something is “sufficiently decentralized,” it may not be considered a security. Having said that, ApeCoin DAO is comparatively very centralized – not only does it have a foundation that serves as the administrators for the DAO, but BAYC/MAYC creators, Yuga Labs, have a heavy hand in shaping the utility of the token. This unique study gives interesting insight into how legality plays a role into this new organizational structure, along with some of the current flaws in the system that allows for gray areas.

Since DAOs are still relatively new and in the process of being defined, many have already started to explore implementing DAO-like structures into their projects through NFTs.

Perhaps the most notable example is Bobu the Bean Farmer. The “experiment’ explores decentralized IP management, and rather than using a custom smart contract just for a DAO, they operate by creating a tool used for decentralized voting through ERC-1155 tokens (a type of smart contract token used for NFTs). The project operates under many of the same guises and systems seen across many other DAOs, including a governance model that utilizes a multisig wallet that will require multiple members to sign off on transactions, proposals that require governance voting, and a committee that will decide which proposals will be voted on. While many of the core concepts are not original to Bobu, it is the only one that is doing so through an NFT and characterizes members through holders of the Bobu NFT token. Additionally, rather than having a smart contract that onlines voting procedures, currently, votes are held on Discord, which is far from being a decentralized system. Additionally, the Azuki team (the creators behind Bobu as well as the extremely popular Azuki collection) has the power to intervene on Proposals, as well as will be releasing a timeline, schedule and planning the general direction of the project. Although the project itself never identifies as a true DAO, it is interesting to see how NFT projects are taking these concepts and applying them to different areas within the Web3 space.

Another atypical example of a “DAO” is Proof Collective. Having recently launched their Moonbirds collection, they have been receiving a lot of press giving their extreme demand in the secondary market that has racked up over $281 million. While not officially labeled as a DAO, Proof Collective is a group of 1000 NFT collectors, and includes well known figures in the space, including Mike Winkelmann (or Beeple) and Gary Vaynerchuk. Although they are not governed by smart contract, membership to the organization can be bought through owning a Proof Collective membership pass, which originally sold for 1.99 ETH and currently resells for ~100 ETH. Additionally, members are given access to exclusive drops from the brand as well as early access to future releases. Having said that, these are features commonly found within other NFT projects.

The Future:

After studying a couple of examples of DAOs, it is possible that you may feel even more confused than before – unfortunately, given how new all of Web3 and blockchain technology is, this is the reality of the situation. Although many are enthusiastic about the potential of DAOs, such as this Harvard Business Review that echoes many of the points made by dOrg members – notably that DAOs allow for individuals to have more autonomy over where, when and how they work, more freedom to pursue more fulfilling projects, more decision-making power, ownership and transparency with compensation – there is also a lot of uncertainty with how these organizations will operate legally as well as the direction and future of how they function. Whether or not they continue to operate using more traditional tokenomics or NFTs is still yet to be seen and the line between what is considered a DAO and what is not is still currently being built and developed as we watch the world of Web3 continue to grow.

Bibliography

• “Apecoin.” ApeCoin, https://apecoin.com/. 
• “Azuki.” Bobu The Bean Farmer, https://bobu.azuki.com/governance. 
• Chow, Andrew R. “No Bosses: What It’s like Working at a Dao.” Time, Time, 24 Mar. 2022, https://time.com/6146406/working-at-dao-dorg/.
• “Decentralized Autonomous Organizations (Daos).” Ethereum.org, https://ethereum.org/en/dao/. 
• “Ethereum’s Russian-Born Cofounder Has Been Quietly Supporting a Dao That Raised $8 Million in Crypto for Ukraine. His Dad Is Even More Involved.” Yahoo! Finance, Yahoo!, https://finance.yahoo.com/news/ethereum-russian-born-cofounder-quietly-183929743.html. 
• Glaveski, Steve. “How Daos Could Change the Way We Work.” Harvard Business Review, 7 Apr. 2022, https://hbr.org/2022/04/how-daos-could-change-the-way-we-work. 
• Locke, Taylor. “Russian-Born Ethereum Co-Founder Vitalik Buterin Quietly Donates $5 Million to Ukraine Relief Efforts.” Fortune, Fortune, 8 Apr. 2022, https://fortune.com/2022/04/08/vitalik-buterin-ukraine-donation-ethereum-russian-invasion/. 
• Locke, Taylor. “What Is the Moonbird NFT Collection, and Why Did It Surge so Quickly?” Fortune, Fortune, 19 Apr. 2022, https://fortune.com/2022/04/18/moonbird-nft-collection-surge/. 
• Lopatto, Elizabeth. “Will APECOIN and Yuga Labs Make the Regulators Go Ape?” The Verge, The Verge, 25 Mar. 2022, https://www.theverge.com/2022/3/25/22994795/apecoin-yuga-labs-sec-regulation-utility-token.
• Roose, Kevin. “What Are Daos?” The New York Times, The New York Times, 18 Mar. 2022,
  https://www.nytimes.com/interactive/2022/03/18/technology/what-are-daos.html. 
• “Smart Contracts.” Ethereum.org, https://ethereum.org/en/smart-contracts/. 
• Stevens, Robert. “What Is Tokenomics and Why Is It Important?” CoinDesk Latest Headlines RSS, CoinDesk, 11 Apr. 2022, https://www.coindesk.com/learn/what-is-tokenomics-and-why-is-it-important/. 
• Tan, Eli. “YouTuber Logan Paul Files Trademarks for NFT Marketplace, Dao Ventures.” CoinDesk Latest Headlines RSS, CoinDesk, 10 Feb. 2022, https://www.coindesk.com/business/2022/02/10/youtuber-logan-paul-files-trademarks-for-nft-marketplace-dao-ventures/. 

Our world is becoming increasingly digital – in the past year, the metaverse and NFTs have become a household buzzword, causing a massive “gold rush” into developing bleeding-edge innovation surrounding immersive experiences.

Augmented Reality (AR) focuses on blending the physical and digital worlds together in cohesive experiences. AR overlays digital elements on top of the real-world, which “keeps the real world central but enhances it with other digital details, layering new strata of perception, and supplementing your reality or environment”. Perhaps the most well known example of this is Pokémon GO. Virtual Reality (a fully immersive digital experience that features computer-generated imagery and sounds that requires a head-mounted display, headset and haptic controllers) and Mixed Reality (experiences where users can interact with both physical and digital items and environments at the same time), concepts that are highly associated with AR, are often looped into the same conversation. 

Having said that, the majority of the fashion products and experiences currently available on the market primarily utilize AR; this article will mainly be focusing on how more established, traditional brands are embracing this immersive technology in comparison to those born in the Web3 era.

Traditional Fashion Labels:

Perhaps one of traditional fashion labels doing the most with AR is Louis Vuitton. In the past couple of years, they have launched a variety of AR products, collaborating with the likes of Dr. Helen Papagiannis, one of the most influential figures in the AR is. In addition to having worked with the technology and industry leaders in the space for over a decade, she has explored NFTs, had her work displayed in Time Square, and collaborated with some of the largest luxury fashion labels today. In October of 2021, her work was featured as 1 of 200 visionaries in Louis Vuitton store windows globally, where she had the opportunity to reimagine LV’s iconic trunk as “an abundant future garden blooming with possibilities and pulsing with life” through a mixed reality experience. The trunks (both physical and digital) will be on auction at Sotheby’s in 2022.

Louis Vuitton has also explored other digital projects and avenues. Other projects have included a Travel Book collection that acts as an invasion to real and virtual voyages. In an edition published in 2019, the book pages would become animated with sound when scanned with the Google Lens mobile app. Additionally, in a 2019 collaboration with League of Legends, Louis Vuitton released AR Instagram filters that would allow users to try on co-branded accessories.

In more recent news, during this year’s New York Fashion week, label Maisie Wilen presented their latest collection with 7-foot-tall holographic models. The virtual models were lined up and “performed” repetitive loops and featured retro futuristic clothes, created by 106 cameras around the models capturing 360 imaging in super sharp 6K resolution to create a “living GIF lookbook”. Schloss, the designer behind the collection, explained that by utilizing digital presentations and taking a hybrid approach, she would be able to access home viewers as well as in-person attendees. Additionally, the collection is available through their shoppable site, which also features AR versions of the models that allows fans of the brand to play with the digital assets in their own environments.

Burberry also released an A.R. app in 2021 that would allow users to customize sculptures of Burberry’s pocket bags using their designer patterns, prints, and shapes from the “In Bloom” spring/summer 2021 collection and place them virtually within their home. This was in continuation with their previous efforts of launching an AR shopping tool through Google Search technology, that would allow consumers to see an AR version of the product at scale within the context of their own environments. Additionally, Burberry also launched an exclusive AR experience activated through QR codes that was available in their flagship store opening in Ginza, Tokyo as well as a digital pop-experience powered by Google Lens.

Similarly, even retailers such as Farfetch and Goat, platforms that sell products from a variety of boutiques and brands are partnering with AR technology companies to produce their own versions of virtual try-on technology. Both have launched AR experiences within their respective apps to let users try on a range of sneakers from brands such as Gucci, Versace and Off White.

Unlike some of its competitors, Chanel’s immersive technology experience focuses on make-up, rather than fashion elements. Their product utilizes a Lipscanner, which uses AI to take any image and match it to a lip color from the brands selection of over 400 products. The patented technology incorporates “intensive algorithm training” and can identify exact shades and textures from images to render AR products onto the customers’ faces.

According to Erin Schmidt from Coresigh Research, “Virtual try-ons drove over twice the engagement, as well as higher conversion and retention rates, doubling the number of sessions from the previous quarter in its second quarter earnings report of 2021, dated 5 Feb., 2021”. In addition to all of the hype and attention related to Web3 and NFTs, with these discovered KPIs, it is no surprise that traditional brands have been implementing this technology within their branding and marketing experiences.

Web3 Fashion Labels:

In addition to the slew of established luxury brands exploring immersive technology, there have also been a number of newly formed companies born in the Web3 space that fully embrace it and rely on this technology for their core products.

AUROBOROS, a London based brand, is a fashion label focused on creating digital couture. Consumers can buy digital garments from their website by sending them a clear photo in good lighting. Their team then applies the garment onto the customer’s photos by customizing their “made-to-measure” digital clothes precisely to their client’s body shape. In 2021, the brand debuted their inaugural ‘Biomimicry’ collection at London Fashion Week’s DiscoveryLAB; consumers could scan a QR code featured on posters and billboards around London that unlocked an AR try-on experience on Snapchat.

As of now, digital clothing marketplace DressX embraces similar concepts and ideas as AUROBOROS to allow consumers to buy their garments on their website. The difference however, is that DressX focused on selling clothing from a variety of designers and brands at varying price points. The brand raised a seed round of $2 million, and has been developing an app that focuses on creating digital try-on experiences with AR, to ultimately replace the current buying experience. Co-founder Natalia Modenova explained that their clothing is “ultimately designed to be compatible across different universes online” including Zoom.

RTFKT studios is another brand that has explored AR technology, primarily through digital streetwear and sneakers. As part of their marketing, the brand creates viral content on social media that features their real-time AR try-on, enabled by recent hardware and software companies from Snapchat and Apple. By capitalizing on the hype from social media, the brand has been able to sell NFTs of their digital goods for as much as $15,000 USD. (Refer to Elon Musk wearing the “CYBERSNEAKER”). Their website also features 3 Snapchat filters than anyone can try by scanning a QR code, featuring try-on shoes, a massive meta pigeon that can appear in any environment, and their puffer meta jacket. The brand has since shifted their focus more to CloneX, an NFT profile picture project. Shortly after, it was announced that Nike acquired RTFKT as a step towards embracing the metaverse and the ever growing digital creative community.

Conclusion:

After exploring a variety of traditional fashion houses and newer Web3 brands, it is clear that companies value AR experiences and are focused on continuing to develop these technologies. Having said that, immersive experiences are still at its infancy. The majority of the experiences related to the space have been AR try-ons, and almost none of them incorporate VR and MR in substantial ways. In efforts to speed up development, Meta hosted their first Luxury Innovation Summit in 2021 and brought together 50 top luxury executives to discuss the potential of virtual and augmented reality for their brands. In addition to showcasing examples of how VR can enable potential clients to engage with the brand in new ways, Meta is also investing in tools to help brands have higher conversion rates. 

As more interest, hype and money continues to move into the metaverse and Web3, so will the technology related to immersive experiences. We are just getting started.

Resources:

• Artnet News. “Burberry Just Released an A.R. App That Lets You Design Your Very Own Virtual Sculptures Featuring the Brand’s Iconic Imagery.” Artnet News, Artnet News, 7 June 2021, https://news.artnet.com/style/burberry-ar-app-1977138.
  
• “Auroboros Presents Biomimicry Digital Collection at London Fashion Week In Partnership with IODF.” YouTube, Auroboros , 12 June 2021, https://www.youtube.com/watch?v=ldOUbyCxIRI.
  
• Chitrakorn, Kati. “An Augmented Reality Shopping Boutique Is Here.” Vogue Business, 19 Feb. 2021, https://www.voguebusiness.com/consumers/augmented-reality-store-machine-a-institute-of-fashion-design.
  
• Facebook, Vogue Business for. “The Augmented and Virtual Reality Opportunity for Luxury.” Vogue Business, Facebook, 16 June 2021, https://www.voguebusiness.com/technology/the-augmented-and-virtual-reality-opportunity-for-luxury.
  
• Ferere, Cassell. “Snap Inc.. and Complexcon Are Using Augmented Reality to Allow Attendees and Fans at Home to Shop.” Forbes, Forbes Magazine, 5 Nov. 2021, https://www.forbes.com/sites/cassellferere/2021/11/05/snap-inc-and-complexcon-are-using-augmented-reality-to-allow-attendees-and-fans-at-home-to-shop/.
  
• Jasman, Asri. “Try on off-White Sneakers Virtually with the Farfetch App.” Esquire SG, 14 Aug. 2020, https://www.esquiresg.com/farfetch-virtual-try-on-off-white-sneakers-wannaby-ar-technology/.
  
• McDowell, Maghan. “Why Ar Clothing Try-on Is Nearly Here.” Vogue Business, 26 July 2021, https://www.voguebusiness.com/technology/why-ar-clothing-try-on-is-nearly-here.
  
• “Nike, Inc.. Acquires RTFKT.” Nike News, 13 Dec. 2021, https://news.nike.com/news/nike-acquires-rtfkt.
  
• Nowill, Rob. “Is It Time to Invest in Virtual Fashion?” HYPEBEAST, HYPEBEAST, 25 Jan. 2021, https://hypebeast.com/2021/1/virtual-ar-fashion-tribute-rtfkt-aglet.
  
• ​​Onufrowicz, Martin. “AUROBOROS Is the Tech Fashion House Creating Celestial Cyber Couture.” Dazed, 12 Feb. 2021, https://www.dazeddigital.com/fashion/article/51913/1/auroboros-celestial-couture-alexander-mcqueen-vr-technology-digital-fashion.
  
• Palumbo, Jacqui. “Digital Dress Codes: What Will We Wear in the Metaverse?” CNN, Cable News Network, 15 Dec. 2021, https://www.cnn.com/style/article/metaverse-digital-fashion/index.html.
  
• Palumbo, Jacqui. “New York Fashion Week Show Staged with 7-Foot-Tall Holographic Models.” CNN, Cable News Network, 15 Feb. 2022, https://www.cnn.com/style/article/maisie-wilen-fall-2022-nyfw-holograms/index.html.
  
• Papagiannis, Helen. “XR Goes Pop.” XR Goes Pop, 6 Feb. 2022, https://xrgoespop.com/.
  
• Scott, Nateisha. “Chanel’s New Lipscanner Technology Is Proof That Virtual Reality Beauty Testing Is Here to Stay.” Yahoo!, Yahoo!, 22 Feb. 2021, https://uk.style.yahoo.com/chanels-lipscanner-technology-proof-virtual-101436907.html.