"They’re beginning to democratize entry." Jeff Dorman of Arca on the affect of crypto on the organizational construction and different key developments to search for in 2021
What impact will crypto have on the types of organizations? Will experiments in crypto's governance laboratory lead to lasting trends in corporate orchestration?
This week, on the Opinionated Podcast, we discussed this big topic with Jeff Dorman, Chief Investment Officer of Arca, a crypto hedge fund.
Dorman, a CoinDesk columnist, argues that “community tokens” (like LINK or SUSHI) will inevitably outperform “VC tokens” (like COMP, ATOM) because of the preferred incentives in the game.
And he believes the trend of community ownership of crypto will merge with the wider shift towards companies that are properly traded by a range of stakeholders and only by their shareholders.
Dorman contrasts a DeFi project like Uniswap with Airbnb and DoorDash, which are now heading for the IPO. The former rewards liquidity providers (and soon token holders too) who are involved in the success of the system. The latter firms were built on the labor of homeowners and deliverers, but all profits from a public listing go to shareholders.
"With digital assets, you begin to democratize access to these companies and distribute income inequality," he says.
Incentives are key to more democratic governance. “Nobody cares about governance until it affects their bottom line. Twitter won't change its governance for ideological reasons. If there is governance for cash flow, that's a different story. "
A keen thinker with two decades of investing experience, Dorman had plenty of insight into our conversation about Bitcoin, NFTs, and Twitter after the Capitol attack this week.
Now watch the episode and read Dorman's CoinDesk columns here.