‘Our democracy will better evolve because of DAOs,’ says Animoca’s Yat Siu

The rise of Web3 has paved the way for new business models that could shape the next phase of the internet. For instance, nonfungible tokens (NFTs) will play a large part in the open metaverse as the underlying assets people interact with. Decentralized autonomous organizations (DAOs) are also coming to fruition to allow for community governance within virtual environments. 

The growth of Web3 has essentially allowed NFTs and DAOs to flourish. For example, recent data from DeepDAO — a DAO stats platform — shows that DAOs have experienced 130-times growth over the last year, reaching a market capitalization of $24.8 billion. In December 2021, DeepDAO found that the total assets under management (AUM) for DAO treasuries listed on the platform increased from around $380 million in January to a peak of roughly $16 billion in mid-September. Nonfungible tokens are also on the rise as a number of crypto-platforms and mainstream organizations continue to implement NFT use cases.

Given this increased interest, Cointelegraph spoke with Yat Siu, co-founder and chairman of Animoca Brands — a Hong Kong-based gaming and venture capital company — during NFT LA to better understand the impact that NFTs and DAOs will have on the future of the internet.

Cointelegraph: Thanks for joining me, Yat. Can you please explain what you spoke about during your fireside chat at NFT LA?

Yat Siu: Sure, I talked about the future of NFTs and briefly discussed why I think nonfungible tokens are going to usher in human creativity that is truly valued. Currently, the content we create is an asset, which actually becomes a platform in itself because it is the data we own. In regard to Web3, I think that the idea of the open metaverse has now become permanent — it’s powerful. It represents hope, along with the idea of equity in a democratic fashion. In order to explain this, I compared the open metaverse to how people typically view America. America represents freedom of expression, natural rights, self-sovereignty and more. I’m optimistic because the people building in Web3 are striving toward that similar goal.

CT: What role do NFTs and DAOs play in Web3?

YS: NFTs are critical because they represent the assets and items of the Metaverse, or things we own. The way we govern this is through decentralized autonomous organizations. They determine our rights in the Metaverse.

Nonfungible tokens also present greater opportunities than physical items do in the real world. For instance, if I own land in The Sandbox, I now have the ability to not only build on what Sandbox gave me as tools, but I can also have any third party come in and construct a new idea and innovation. This means that we can create a Cambrian creative explosion because we can build and compose freely on assets someone else has formed.

We’ve experienced small instances of this in Web2. Take YouTube, for example. Users can upload a video to that platform, but I remember Hollywood executives initially didn’t believe that anyone would want to watch someone else eating food or dancing — now, look at YouTube. YouTube demonstrated that we can combine the culture of user-generated content with our own experiences. However, ownership does not belong to the creator in this instance, it belongs to YouTube. Web3 gives this back to the end user, and NFTs are critical assets in this equation.

CT: There is an influx of DAOs at the moment. How does Animoca decide which to invest in?

YS: From an investing perspective, we look at where value is driven within DAOs. For instance, if you look at ApeCoin (APE) or Sandbox (SAND), owning these tokens is a way to be part of a network effect and power those communities they represent. If you think The Sandbox is going to keep growing, then it makes sense to have that token since those people most likely care about the future of that community. You also…