Decentralized Autonomous Organizations (DAOs) and Decentralized Finance (DeFi) walk the same line, but they take different paths, both of which can significantly benefit the long-term vision of a CXO. DAOs can provide CXOs with unique mechanisms to develop closer, more inclusive customer relationships and integrate internal cultural changes. Meanwhile, DeFi mechanisms enable CXOs to develop entire customer-focused financial ecosystems.
However, before we cover how organizations can best use these technologies to support CXO strategies, we need to discuss where they exist. There are two layers to DAOs and DeFi for the progressive CXO; practical strategic advancement and a springboard to enter the most disruptive era in the history of internet technologies.
Gateway to Web 3.0 and the Metaverse
DAOs and DeFi are essential components of Web 3.0 and the Metaverse. Decentralization is the foundation of the next iteration of the internet and, as with the existing internet, governance and trade will continue to be critical concerns.
Many CXOs are struggling to find ways to enter the Metaverse and transition to Web 3.0. As we’ve seen repeatedly, the big bang approach doesn’t work. Additionally, too many companies are getting it wrong. As essential technologies, DAOs and DeFi enable organizations to take a use-case-focused approach that instantly adds value and justifies the company’s investment.
Beyond this, the technologies can solve existing business obstacles in the Metaverse or another Web 3.0 environment. For example, customers may be more inclined to adopt a DeFi-backed customer loyalty scheme because the returns are far higher than in traditional finance.
The Potential of DAOs
A DAO describes itself: It is a decentralized mechanism for autonomously managing the collective assets of a democratic organization or community. Although the term has become more mainstream and new to many, the concept is certainly mature. In fact, as of June 2022, over $10 billion was held in the leading DAO treasuries.
From a CXO perspective, DAOs enable a superior, more involved UX. You can create DAOs to incorporate customers at every level of your business. For example, during product development, high-value customers can receive voting rights to determine what they want to see from a new offering, helping you to target the development processes.
Beyond this, DAOs can provide an alternative to shares, where a percentage of profits, perhaps solely Metaverse-generated, can be distributed amongst loyal customers for their ongoing commitment to your brand.
Internally, DAOs can incorporate the stakeholder voting rights system to create a more democratic company culture. In this scenario, business users can directly impact the direction of growth and consequently feel invested in the success.
What to Do With DeFi?
DeFi was born out of the crypto economy. However, while cryptocurrencies are solely digital currencies, regardless of utility, DeFi incorporates a far more comprehensive line-up of financial instruments.
As a CXO, the DeFi space is limitless. For example, you can launch tokens corresponding to your Metaverse platform or project. These tokens can ensure smooth decentralized transactions in your Metaverse ecosystem. Outside of it, this can provide users with potential investment opportunities if you list them on a crypto exchange.
NFTs are a form of DeFi and have already proven lucrative for many organizations. In addition to selling NFTs or including them as part of a gamified Metaverse experience as a reward, you can airdrop both tokens and NFTs to customers.
However, digital assets aren’t the only potential revenue stream. CXOs might also consider leasing and loans. Although more complicated than the previous use cases, DeFi loans offer an avenue of engagement that many brands are yet to utilize.
Using a loan structure based on Metaverse tokens, you can create digital twins of real-life products and services and start to build virtual worlds where, as in real-life, many items are purchased on credit. The difference is that the cost of a loan, or store credit, in digital tokens is negligible compared to fiat currencies and contained within your ecosystem.
This ultimately means that you can engage new customers with new experiences that won’t leave them out of pocket but will grow the status of your brand and Web 3.0 efforts. Beyond this, you can use the DeFi leasing model to franchise virtual businesses — another area where forward-thinking CXOs will find themselves ahead of the curve.
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