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Forget Pump and Dump, Pimp and Hodl
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New Money
If you’re invested in a company or business, wouldn’t you want that organization to thrive?
Why should only Sales, Marketing, and PR/Communications departments shamelessly promote the place that indirectly pays your rent, your retirement, and for the food to feed your kids? Why should marketing need to hire spokesmodels, spokesmen, and influencers to pump the product? Wouldn’t the success of “your company” directly reflect in your success?
Public Pumping
But what happens when the business you’re in—as an employee, stakeholder, investor, or owner—goes public? What happens when your penchant for promotion and viral marketing and your prowess in sales and communications starts inflating the value and the valuation of the company itself? This sort of market manipulation has been frowned upon for eons when it comes to public companies on the Stock Market and it’s also is being frowned upon in the crypto world of the Initial Coin Offering (ICOs), but what about other assets and investments? What about hybrids? What about companies that are investments that are coins that are tokens that are not public, per-se, but can be bought and sold and traded as though they were? And what if all the so-called market manipulation and pumping didn’t result in dumping but resulted in just a larger, healthier, more profitable entity? Wouldn’t that be cool?
The future of business might be in the form of a blockchain-backed form of incorporation that is software based and programmed to pursue growth, success, and revenue while jettisoning waste. The entire company lives distributed across blockchain nodes around the world, never actually being born or beholden to a State, City, Region, Country, or Politics. Everyone who interacts with this organization becomes a de-facto investor: investors, owners, and workers, all.
Pimp & Hodl, Inc.
Why pump and dump when you can pimp and hodl? A decentralized autonomous organization (DAO) is a self-running and self-regulating entity that can do just about anything an organization can do, and this will be even truer as the state of the art in artificial intelligence (AI) and the Internet of Things (IoT) approaches autonomic sentience. Then, DAOs will be able to bleed from the digital into the actual.
However, until robots can get loans or rob banks, the DAO will need to raise funds from humans, will need humans to do the work and even a lot of the marketing (though I am sure at least one AI has sorted out advertising on Google, Facebook, and Twitter, with just a little help, going so far as to have mastered algorithmic trading, with a little help of a copywriter, a designer, a graphic artist, and maybe an adman—at least for now. DAOs are cool. Whenever I think of them, I think of corporate personhood:
“The legal notion that a corporation, separately from its associated human beings (like owners, managers, or employees), has at least some of the legal rights and responsibilities enjoyed by natural persons (physical humans).” —Wikipedia
Fire the Boss
It’s not that they fire the CEO and all the other members of the C-Suite and the entire Board, all the Middle Management, the HR and Law department, Accounting, and all the other cost centers—they never hire them in the first place. The only humans that are retained of service are those solidly in the profit center side of the debits and credits. Theoretically, even, one could hail a job at a DAO by just benefitting it as a whole.
I assume that DAOs would really glom onto affiliate marketing and marketers. Humans who do a lot of work on spec with the hope, down the road, that they will benefit partially from all the fish they’ve landed on behalf of the company and for the company—all without being on the payroll, all without ever being a cost center.
Supranationalism
So, if DAOs could be pinned down to a nation-state, most tax forms would be for independent contractors in lieu of employees; which, in the US, means W9s and 1099s. Like Uber drivers to Uber or Lyft driver to Lyft (they would both be exceptional DAOs).
But DAOs are above the law, supranational, transcendent, and as independent of national and international laws as are Ethereum and Bitcoin. Which, realistically-saying, is as compliant as they want to be. And that country of compliance might be Malta. It’s up to you and your DAO (technically speaking, once the DAO is born, you’re no longer the boss if it, per-se—so only if incorporating in Malta is in the DAO’s best interest).
Is It a Store?
DAO PlayMarket 2.0 is an early interpretation of this vision. On the surface, it’s an e-commerce store that hosts Android apps. One might even say YAAAS (Yet Another Android App Store). But no! It’s a little bit GoFundMe, it’s a little Vanguard, it’s a little bit Google Play, and it’s a little bit Open Ledger—all about cause the DAO in DAO PlayMarket 2.0 stands for decentralized autonomous organization and so it’s much more than an e-Store.
The PlayMarket platform can run a Token Sale to raise funds to develop Android apps; it’s an e-commerce site where people can upload apps to sell and visitors can download to use; it’s an Index Fund because all apps, at some point, convert from being products that make the developer and investors rich into becoming assets that are owned and that benefit anyone who owns investment Tokens; and it’s a decentralized exchange (DEX) where investors can buy, sell, and trade their ownership in PlayMarket and the apps through their buying, selling, and trading their Tokens.
Go Team!
In many ways, the DAO only works if everyone financially involved works as hard as possible to make the corporate entity as successful as possible, from promoting not just your own apps in the PlayMarket store but all the apps in the store, to the exclusion of all other store and all apps that haven’t joined up. It would behoove all members of the PlayMarket family to tread their DAO more like their favorite sports team or their alma mater than just the convenience store where they just mindlessly clock in and out of. It’s more like a family-owned ethnic restaurant where the grandparents, the parents, the kids and grandkids all work there. All for one and one for all. To me, it’s a compelling business model—even more than just because of the autonomous and decentralized nature of the business model and how there are virtually—ideally—no cost centers and only profit centers. I like it most of all because everyone who works is also become part owner—or could if they wished, instead of cashing out—and because success is more emergent than designed. All things come from the bottom up. In an environment where each member is so tied to the success of the larger corpus, pimp and hodle—not pump and dump—would be de rigueur.
Originally published on Newconomy
DAO FAQ
1. What is the main idea behind "Forget Pump and Dump, Pimp and Hodl"? The article advocates for a long-term investment and support strategy for blockchain projects and DAOs, contrasting the short-term "pump and dump" tactics often seen in the crypto market. It emphasizes the role of stakeholders, including employees and investors, in actively promoting and supporting their investments to ensure mutual success.
2. How does Chris Abraham contribute to the concept of marketing blockchain projects? Chris Abraham, with his expertise in SEO, influencer marketing, and online community engagement, highlights the importance of authentic and strategic promotion of blockchain projects. His approach suggests leveraging deep knowledge of the crypto community and digital PR techniques to build lasting engagement and support for blockchain initiatives.
3. Why is the "Pimp and Hodl" strategy considered beneficial for blockchain projects? "Pimp and Hodl" encourages a sustained, collective effort in promoting and holding onto blockchain assets or investments, fostering a stable and growing ecosystem. This approach benefits all stakeholders by potentially increasing the value and success of the project through genuine support and advocacy, rather than speculative trading.
4. What role do Decentralized Autonomous Organizations (DAOs) play in the new economy? DAOs represent a shift towards a decentralized, blockchain-based form of organization that operates autonomously, guided by smart contracts and collective stakeholder decisions. They symbolize a move away from traditional, centralized business models, offering a transparent, efficient, and democratic way to manage projects and assets.
5. How can digital PR professionals like Chris Abraham influence the success of DAOs and blockchain projects? Digital PR professionals can utilize their skills in SEO, social media, and influencer marketing to craft compelling narratives around DAOs and blockchain projects, attracting attention and support from the wider community. Their understanding of online dynamics and ability to engage with niche audiences can significantly boost a project's visibility and credibility.
6. What challenges do blockchain projects face in gaining mainstream acceptance, and how can they be addressed? Blockchain projects often grapple with public skepticism, regulatory uncertainty, and the technical complexity of the technology. Addressing these challenges requires clear communication, education efforts to demystify blockchain, and strategic partnerships to demonstrate practical applications and benefits.
7. What distinguishes a DAO from traditional organizational structures? A DAO operates on blockchain technology, making it fundamentally different from traditional organizations. Unlike conventional companies managed by individuals or boards, DAOs run on a set of predefined rules encoded as smart contracts on a blockchain. This setup ensures operations are executed automatically without centralized control, based on consensus mechanisms among stakeholders.
8. How do stakeholders influence decisions within a DAO? In a DAO, decision-making is democratized. Stakeholders, typically token holders, participate in governance by voting on proposals concerning the organization's direction, including development projects, utilization of funds, and changes to protocols. Voting power is often proportional to the number of tokens an individual holds, ensuring decisions reflect the collective will of the stakeholders.
9. What are the advantages of DAOs over traditional business models? DAOs offer several advantages, including increased transparency, as all transactions and decisions are recorded on the blockchain; enhanced security and reduced fraud risk, thanks to the immutable nature of blockchain; and improved efficiency, with smart contracts automating operations and eliminating the need for intermediaries. Furthermore, DAOs facilitate global participation without geographical limitations.
10. How does a DAO launch and raise funds? A DAO typically launches through an Initial Coin Offering (ICO) or a token sale, where it sells its native tokens to raise the capital needed for development and operations. These tokens often confer voting rights, giving holders a say in the organization's governance. The funds are usually managed by smart contracts, aligning with the DAO's operational autonomy.
11. Can DAOs face legal or regulatory challenges? Yes, DAOs can encounter legal and regulatory challenges due to their novel and decentralized nature. The lack of a legal framework specifically designed for DAOs raises questions about liability, taxation, and compliance with existing laws. Jurisdictions vary in their approach to blockchain and crypto assets, making the regulatory landscape for DAOs complex and fluid.
12. What are some notable examples of DAOs and their purposes? Examples include MakerDAO, focusing on decentralized finance (DeFi) by allowing users to lend and borrow cryptocurrencies; Aragon, providing tools to create and manage DAOs; and Decentraland, a virtual world governed by its users. Each DAO has unique goals, from financial services to digital governance and virtual real estate development.
13. How do DAOs contribute to the concept of a decentralized internet or Web3? DAOs are foundational to Web3, the envisioned next phase of the internet, emphasizing decentralization, blockchain technologies, and token-based economics. By enabling autonomous, decentralized governance and ownership, DAOs exemplify Web3's principles, potentially reshaping how online platforms and communities operate and interact.
Comprehensive Glossary
- Blockchain: A distributed ledger technology that allows data to be stored across a network of computers, ensuring transparency, security, and immutability of transactions.
- DAO (Decentralized Autonomous Organization): An organization represented by rules encoded as a computer program that is transparent, controlled by the organization members, and not influenced by a central government.
- Pump and Dump: A manipulative scheme that involves inflating the price of an owned stock or cryptocurrency through false and misleading positive statements to sell at a higher price.
- Pimp and Hodl: A strategy advocating for actively promoting and holding onto blockchain investments for the long term, contributing to the project's success and stability.
- DEX (Decentralized Exchange): A type of cryptocurrency exchange that operates without a central authority, allowing users to conduct transactions directly with one another.
- ICO (Initial Coin Offering): A fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for bitcoin and ether, similar to an initial public offering (IPO) for stocks.
- Digital PR: The use of online strategies to manage a brand or organization's presence and reputation, including engaging with target audiences through social media, blogs, and other digital platforms.
- Smart Contracts: Self-executing contracts with the terms of the agreement directly written into code, allowing for transactions and agreements to be automatically executed when conditions are met.
- Crypto-World: The ecosystem that encompasses cryptocurrencies, blockchain technology, and the various projects, platforms, and communities that operate within this digital space.
- Supranationalism: The idea or advocacy of transcending national boundaries or interests to form a higher level of political or economic cooperation among states or organizations.
- Consensus Mechanisms: Algorithms used in blockchain and DAOs to achieve agreement on a single data value among distributed processes or systems. Consensus mechanisms ensure security and integrity, with common types including Proof of Work (PoW) and Proof of Stake (PoS).
- Tokenomics: A portmanteau of "token" and "economics," referring to the study of how cryptocurrencies work within the broader ecosystem. This includes considerations like supply mechanisms, distribution, and how they incentivize behavior in a DAO.
- Decentralized Finance (DeFi): A blockchain-based form of finance that does not rely on central financial intermediaries, enabling direct peer-to-peer transactions via smart contracts on DAOs and other blockchain platforms.
- Immutable Ledger: A blockchain ledger whose entries cannot be altered or deleted, ensuring a permanent and tamper-proof record of all transactions. This feature is crucial for the trustless operation of DAOs.
- Token Governance: A system within DAOs where decision-making power is tied to the ownership or possession of cryptocurrency tokens. Token governance allows stakeholders to propose, vote on, and implement changes based on token ownership.
- Smart Contract Auditing: The process of reviewing the code of smart contracts to ensure they are secure and function as intended. Given smart contracts' pivotal role in DAOs, auditing is critical to prevent vulnerabilities and ensure the integrity of operations.
- Decentralized Applications (dApps): Applications that run on a peer-to-peer network of computers rather than a single computer, leveraging blockchain technology. dApps are often associated with DAOs, serving various purposes from gaming to finance without central control.
- Web3 (Web 3.0): The proposed next stage of the internet, characterized by decentralized networks, blockchain technologies, and a greater emphasis on user privacy, ownership, and peer-to-peer interactions.
- Blockchain Node: A computer connected to a blockchain network that uses a client to perform tasks such as validating transactions, participating in consensus, and maintaining a copy of the shared ledger.
- On-Chain Governance: A governance system for blockchain projects where changes and decisions are made through proposals, discussions, and voting recorded directly on the blockchain, ensuring transparency and immutability.
Overview of "Pimp and Hodl" Strategy vs. Traditional Investment Approaches
A detailed introduction to the "Pimp and Hodl" strategy could clarify how it differs from traditional investment tactics like "Pump and Dump." This section could address how “Pimp and Hodl” advocates for active, long-term support and promotion of blockchain projects rather than speculative short-term trading. It could emphasize the benefits of consistent stakeholder engagement, underscoring how it builds a project’s foundation, reputation, and sustained growth.
The Role of Decentralization in Modern Investment Models
This section could explain the significance of decentralization within blockchain projects and DAOs (Decentralized Autonomous Organizations). It could cover how decentralized models differ from traditional businesses in terms of governance, control, and accountability, making the “Pimp and Hodl” strategy particularly relevant.
Implications of DAOs on Traditional Corporate Structure
An analysis of how DAOs challenge and potentially revolutionize the traditional corporate hierarchy could be useful. This section could discuss the concept of "firing the boss," where DAOs eliminate the need for centralized authority, redefining how organizations are managed and structured. Highlighting the efficiency and transparency brought by DAOs, it would underline the impact of a flat organizational model that operates solely on blockchain technology.
Marketing and PR in the Age of DAOs and Blockchain
Since the article discusses the role of stakeholders in promoting their projects, this section could elaborate on how digital marketing and PR practices differ in the blockchain and crypto space compared to traditional markets. Specific examples of how influencers, investors, and community members contribute to a DAO’s success through organic promotion could illustrate the decentralized nature of marketing in this space.
Case Studies of Successful DAOs and the "Pimp and Hodl" Model
Including real-life examples or case studies of DAOs that have successfully implemented a “Pimp and Hodl” approach would add credibility. Profiles of projects like MakerDAO, Decentraland, or PlayMarket 2.0 could illustrate how collective promotion and sustained support have positively impacted their growth, valuation, and community engagement.
Legal and Regulatory Challenges for DAOs
DAOs face unique challenges, particularly in the legal and regulatory arenas. This section could explore how DAOs navigate these complexities and what compliance requirements, if any, they must meet. Mentioning jurisdictions like Malta or Wyoming, which are creating legal frameworks for blockchain projects, could demonstrate how regulatory environments influence DAOs' operations.
The Future of Work and Employment in a DAO-Driven Economy
This section could delve into how DAOs are redefining traditional employment. By leveraging freelancers, independent contractors, and affiliate marketers instead of full-time employees, DAOs are shifting toward a gig-like economy model. Exploring how this affects job stability, income potential, and professional growth for contributors would provide readers with insights into the new dynamics of working in the blockchain space.
Potential Drawbacks and Risks of the "Pimp and Hodl" Strategy
While "Pimp and Hodl" promotes long-term stability, it is not without risks. This section could address potential pitfalls, such as over-reliance on community promotion, volatility, regulatory crackdowns, or market manipulation concerns. By discussing these, readers gain a balanced perspective on both the advantages and challenges of adopting a "Pimp and Hodl" approach.
Comprehensive Glossary Expansion
An expanded glossary section that includes newer terms, such as "smart contract auditing," "tokenomics," and "on-chain governance," would benefit readers who are new to crypto jargon. A complete glossary aids in comprehension and enhances accessibility for readers unfamiliar with the blockchain or decentralized finance (DeFi) landscape.
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