How Will CharitiesNFT Work For Canadian First Nations Grassroots Artists? Will NFTs Revolutionize the First Nation Communities?  (Part 7)  

By Terence Ho | Foundation of HKPLTW

Terence is a Research Coordinator for the Foundation of HKPLTW with interests in history & traditions, social organization & inter-group relations, culture & religion, and economics & politics of Canadian Indigenous People and Visible Minorities. Follow him on Twitter: @hkpltw

Abstract:

• CharitiesNFT: A kind of digital-twin NFT, promotes NFTizing physical artwork created by grass-root artists, using Hologram and Holo-DKEY for Crypto-Validation.
• CharitiesDAO: A kind of DANO (Decentralized Autonomous Non-profit Organization) with an ecosystem of charities founders, individual contributors and receivers, project accelerators and incubators. This is building more transparent and efficient decentralized donation chains.
• In a series of articles, I will introduce WHITE PAPER of CharitiesNFT and CharitiesDAO and discuss how they work for Canadian Indigenous Traditional Culture and Grass-root Artists as one of the application scenarios of CharitiesNFT.
• With the rise of Web3.0, one opportunity which has recently gained traction is the idea of decentralized autonomous organizations or DAOs. It is becoming more popular as crypto and blockchains continue to mature, and many practical uses of DAOs are naturally being put to the test.
• With the rise of Web3.0, one opportunity which has recently gained traction is the idea of decentralized autonomous organizations or DAOs. It is becoming more popular as crypto and blockchains continue to mature, and many practical uses of DAOs are naturally being put to the test.

Why DAOS? What Benefits?

How Are DAOs Made the Organizations More Efficient?

 DAO is an organizational concept that is designed to be decentralized. It acted as a venture capital fund, based on open-source code and without a management structure or board of directors in a traditional organization. I believe that once a charity becomes fully decentralized, the DAO is unaffiliated with any particular board of directors and “bosses.” 

How Are DAOs Made to Reconcile Better With Traditional Organizations?

The developers of the DAO believed they could eliminate human error or manipulation of investor funds by placing decision-making power into the hands of an automated system and a crowdsourced process.

How Are DAOs Designed to a Balance Better Effective Governing and Unrestrained Decentralizing?

Using the blockchain, DAOs are structured to that anyone within an organization can vote and help shape the direction of the project or company. Decentralization and being autonomous are widely believed to be critical components of the Web3.0 ecosystem. As such, DAOs make a compelling case for those looking to build in a consumer-focused environment.

DAOs allow for an organization to be run by a group of supporters in the truest sense, without anyone individual having the final say. Employees have a more decisive say in the organization’s direction. Although vote power can be weighted in DAOs, strength is significantly reduced compared to more traditional businesses in which leadership determines the company’s direction. 

How are DAOs Built to Balance Public Benefits Regulations and Encryption of Individual Privacy? 

DAOs make it easy for communities worldwide to connect and build a prospering vision. With an internet connection and governance tokens, virtually anyone can participate in building the future of Web3.0. Also, on DAOs, all transactions are performed and recorded on the blockchain. An NFT’s entire transaction history can be audited back to its minting, providing unassailable “on-chain” proof of which party’s legitimate claims and preventing intellectual property disputes.

Furthermore, participants in DAOs can choose to remain anonymous — something that can be a double-edged sword. At the same time, it protects individual privacy from strangers on the internet, the participants at the risk of being exploited or worse. Security remains a vulnerability as it requires significant technical expertise to implement. Luckily, DAOs focus on building a more substantial security network and will likely improve significantly. 

CharitiesDAO: A New Vision

Despite the inevitable setbacks that DAOs will face over the upcoming years, many great projects have been launched using this structure. I believe that DAOs are still very promising. Hence, I would like to propose my insight and version of DAOs — “CharitiesDAO.” 

How Can CharitiesDAO Benefit Charities?

Unlike any other DAOs, most of which aim at gamble-to-riche, adventure-to-fame or speculation-to-fortune, the purpose of CharitiesDAO, with its unique CharitiesNFT, is to empower and fund those building and contributing towards the overthrowing revolution for Traditional Charities.

In my theory, I vision that the society of CharitiesDAO is built with the goal of SHARE-TO-GIVE and to make it as difficult as possible to break away from the deadlock of traditional charities. The opaque, cumbersome, inefficient (even corrupted) system of traditional charities has been besetting conventional charities and are criticized the public for many years. They are centrally controlled automation, prone to manipulation.

In contrast, the charitiesDAO allows a charity to accept membership and donations from every users/employees and the group can decide how they want to spend donations. All activity is transparent and fully public; all decision making processes are handled automatically in a decentralized manner.

Anti-Corruption

Often the “corruption” of charities takes the form of high executive salaries and a low percentage of funds donated to the cause at hand. Often, traditional charities are founded on solid principles but ultimately either fall short of fulfilling the expectations donors need or are misleading in their advertising. CharitiesDAO is a new kind of DAO with a distinctive multiple-structure autonomous system, is a kind of DANO (Decentralized Autonomous Non-profit Organization), funding blockchain projects via intelligent contracts (entity), the key to deadlocks besetting the traditional charities. 

The infrastructure of CharitiesDAO can create a more transparent donation chain in a charity organization. In CharitiesDAO, anyone (Government authority, NGO fundraising organization, social workers and volunteers, benefactors and contributors, and beneficiaries and receivers) can monitor, inspect and scrutinize to minimize unnecessary waste and corruption in a whole donation chain. Each charity is governed by its respective charityDAO, which is responsible for charity-level governance decisions. However, CharitiesDAO is not just a normal DAO. It goes beyond the underlying mechanisms that allow DAOs to thrive in the idea that everyone can participate in the process and operation. 

What Makes CharitiesDAO Unique?

CharitiesDAO has a distinctive infrastructure with unique protocols and rules. The governance is based on specific committees, which are built by periodical all-members voting (all blocks and nodes in a typical donation-chain of CharitiesDAO have equal rights to vote and select all kinds of specific committees). Those committees are fully responsible for making strategic decisions and policies, planning the projects and pushing forward, and supervising and directing the progress. Therefore, the unique characteristics of CharitiesDAO is decentralized to a certain extent of centralized.

Angel Protocol

First of all, it has Angel Protocol. The vision of Angel protocol is designed to empower charities — putting sustainable and influence-free money in the hand of charities on the frontlines of creating a justice-centred world. To do this, Angel makes transparent and secure endowment accounts. It has ambitious goals for the future of giving the collective potential of engaged donors to rethink old structures of economic power and influence in traditional charities. Many charities’ lack of long-term operating reserves creates existential challenges, including poor predictability of volatile cash flows and allocation of resources and time.

Angel protocol’s goal is to disrupt this outdated model (Traditional Charities). With Angel, it will allow charities to receive donations via perpetual endowment accounts. These accounts enable donations to compound over time, generating interest to “eternally” contribute. 

DANO Ecosystem

Secondly, it has the DANO Ecosystem. DANOis a decentralized body that governs Angel Protocol. It has been designed to empower charities with financial freedom. With Angel, Charities can create endowments that are subject to governance by charity-level DAOs and the Angel DANO (Decentralized Autonomous Non-profit Organization). DANO ensures that all funds are passed on to charities rather than passing the funds into the pockets of executives.

To operate with the utmost transparency and accountability, DANO governance in charitable organizations happens on-chain. It is different than the infrastructures of most DAOs. In most DAOs, the system can be inefficient because getting everyone to vote on proposals in a timely manner can be a challenge.

Everyone gets a vote on a great idea, but if every decision needs to be voted on by the majority of stakeholders — the extra coordination can be a significant challenge. The amount of time spent discussing an issue is inversely correlated to its importance in the scheme of things. In the fast-paced Web3 environment, speed is vital for long-term success. I believe that the best solution for efficiency is to choose a DAO as the organization’s business vehicle while having a leadership make a decision quickly.

So, overcoming the efficiency caused by negative votes or proposals and improving the staleness of implementation are the best paths forward. In DANO, a board of directors is elected on-chain by token holders for a set term. The role of the board of directors is to provide strategic guidance and settle arbitration. Furthermore, the directors establish a finance committee, which oversees the financial aspects of operations and publishes annual reports.

In addition, they created a charity screening committee to review applications, perform due diligence and validate the charities. Overall, the board of directors is made up of people who are well versed in implementing the DAO model as well as making decisions based on their specific structure

Tokens

Thirdly, tokens are designed for donors to take part in the governance of Angel Protocol. To take part in the administration, token holders stake the DANO’s token ($HALO) to the charity organizations. The value and goal of the token holders are to incentivize the actions of curating, donating and governing while allowing the token holders to participate in the upside as each endowment grows.

Since DANO is based on a decentralized body, anyone can monitor as long as donors deposit $HALO tokens into charity in exchange for charity shares of governance. Charity shares can be exchanged for $HALO tokens, and CharityDAO will be governed by $HALO token holders who stake in it. When getting tokens from the DANO, the token holders will receive shares back, which represents their share of the DANO and grants them cash-flow rights.

DANO creates a strong sense of community between a charity and donors. The token holders of Angel Protocol $HALO token have exclusive rights to participate in decisions for charities. They can veto any of the decisions taken by the DANO’s Board of Directors. $HALO token holders have exclusive rights to participate in governance decisions for those charities they have staked. Such governance decisions might include voting on charity-created proposals and strategic direction.

The token holders help charity organizations raise more money via curation and signalling. By enabling donors to take part in the governance of Angel Protocol, a particular procedure is triggered to determine if the proposal is valid and offer fast arbitration and injunction action if necessary. Above all, there will be increased visibility in charity organizations.

How Can CharitiesDAO-enabled CharitiesNFT Benefit Charity and Users?

DAO helps to end the bureaucracy and potential consequences. DAO-powered platforms focus more on users’ interests, distributing the regulatory power among the members based on how many NFTs or the platform’s native tokens they own. In the case of CharitiesDAO, it is tied to “CharitiesNFT.” CharitiesDAO works as a decision-making tool for CharitiesNFT.

What is CharitiesNFT?

CharitiesNFT, based on the technique of Digital-Twin NFT, is one of the best tools for this system. On the CharitiesNFT platform, all artworks can be digitally mirrored and linked to its unique NFT on a customized blockchain, embedding scarcity and rarity, traceability and identifiability, authenticity and non-counterfeited, high appreciation and up-valuation.

CharitiesDAO Decision-Making Tool For CharitiesNFT

CharitiesDAO, via smart contracts, can solve the deadlocks besetting the traditional charities criticized by the public for many years. Ideally, anyone can supervise and scrutinize, which will minimize unnecessary waste and corruption in the whole donation chain. Overall, smart contracts define the required rules to regulate charity and NFT platforms.

Transparent Ownership and Copyrights

The blockchain ensures every contract’s transparency, robustness, and immutability. The blockchain contains an artwork’s complete provenance and copyright details, with the potential to add a wide range of surrounding information that could benefit the artist. Should intellectual property disputes arise, an NFT’s entire transaction history can be audited back to its minting, providing unassailable “on-chain” proof of which party’s claims are legitimate. In other words, users get the opportunity to stake their NFT and earn tokens to generate rewards out of their NFTs.

A prime example of the NFTizing-by-Hologram system is how Nike’s “CryptoKicks” platform keeps track of the ownership and verifies the authenticity of sneakers using the blockchain-based system. When a buyer purchases a pair of “CryptoKicks,” you will get a digital code attached to a unique identifier of that sneaker. A digital representation of that pair of sneakers will generate and link with the buyer. It will assign a cryptographic token, where the digital shoe and cryptographic token collectively represent a “CryptoKick.” When the sneakers are sold to another person, the ownership can be easily transferred by trading authentic shoes and associated digital assets. These digital assets are stored in a cryptocurrency wallet type of application.

Community Driven and Fully Decentralized (No Hierarchy)

With CharitiesDAO, users get the right to review policies regarding moderation of content, assets policy, and auctions. Furthermore, CharitiesDAO owns smart contracts and NFTs to bring autonomy, removing the concept of CEO from NFT platforms. All users retain complete control over their NFTs even when these are staked or supplied to the liquidity pool.

CharitiesDAO enables the community to vote on essential aspects of the platforms, such as auctions, marketplace decisions, and modifications in current policies. This model strives to bring uniformity, allowing all users to participate in the governance and deliver solutions through their participation. Through transparent and distributed decision-making, CharitiesDAO enables everyone to take an active role in decision-making activities and determine policies for an organization’s future.

CharitiesDAO can the potential to transform the structure of a charity by empowering users-owned communities and decentralizing leadership. DAOs can support anything from an NFT Art Platform to new age charity.

CharitiesNFT Paired with CharitiesDAO: A Revolution for Grassroots Artists

When the CharitiesNFT is paired with CharitiesDAO, it has the potential to promote the high appreciation and up-valuation of those traditional grass-root artists and their physical artworks in the future. CharitiesDAO-enabled NFT platform has galvanized artists to radically restructure how the art market could work if they started from square one. CharitiesDAO and CharitiesNFT will break the norms in the art world where the institutions with long histories and pre-existing industry connections wield enormous influence over who gets to participate in a hierarchical system.

I think that NFTs will be a prefect tool for the First Nation grassroots artists. Blockchain contains the artwork’s complete provenance and copyright details that track all transactions and provides unassailable “on-chain” proof of ownership. Blockchain allows artists unsettled by the prospect of drafting their own agreements and prevent intellectual property disputes.

NFT will galvanize grassroots artists to radically restructure how the art industry could work if they started from the bottom. The only reason digital artwork fails to gain popularity sooner in recent years is because it cannot be tracked. NFTs changes everything. Like physical art, NFTs are either unique or produced in limited editions. The database consists of unalterable “blocks” of transactions, verified cooperatively by the network. The “non-fungible” aspect comes from the fact that each NFT has a value independent of all others, and each NFT has a “Token” — an unique alphanumeric code recorded on the blockchain.

NFT allows the grassroots to make real-time profits instead of waiting for the gallery to accept their artwork, set a price, and then sell their artwork project. Many great talents get buried because the pre-existing art industry connections and establishment wield great influence over who gets to participate in a fundamentally hierarchical system.

The decentralized nature of NFTs and DAOs will welcome artists independent of the art establishment’s approval. The blockchain art space has potential to “change the game” for First Nation grassroots artists because NFTs are giving voice to the voiceless — “Make sure the grassroots can build the art communities they want to build as they see fit.” The blockchain allows NFT artists artists to reinvent resale royalties, marketplace structures, and even exhibition design in ways that prioritize their own needs. It is a means of “collectivizing economics” and, if the artists choose, even “combining for-profit and nonprofit structures so people can funnel some of the proceeds into grant-making or charity”.

Conclusion: CharitiesDAO can be DAO2.0

In my vision, the concept of CharitiesDAO is not simply a “DAO” but is trans-border integration with traditional charities. CharitiesDAO, with its unique CharitiesNFT, is the best solution. It has a distinctive infrastructure built with special protocols and rules, different from those of other DAOs. In web 3.0, CharitiesDAO will be an overthrowing revolution for traditional charities, which is based on decentralized platforms DAOs making the ability to offer “Share-to-Give” that charity resources can we share best and contribute sustainably to maximize the value of charity.

Bibliography

“Angel Protocol Litepaper”. Angel Protocol. https://www.angelprotocol.io/ap-litepaper.pdf. Accessed 20 May 2022.

Beedham, Matthew. “Nike now holds patent for blockchain-based sneakers called ‘CryptoKicks’”. TNW, 10 December 2019, Digital Data. https://thenextweb.com/news/nike-blockchain-sneakers-cryptokick-patent. Accessed 17 May 2022.

Hennekes, Bud. “Building a Successful NFT Project”. Web3 University. https://www.web3.university/tracks/build-your-first-nft/building-a-successful-nft-project. Accessed 23 May 2022.

Robertson, Adi. “Nike is testing NFT trademark law by suing a sneaker reseller”.The Verge, 10 February 2022.https://www.theverge.com/2022/2/10/22925252/nike-stockx-shoe-lawsuit-vault-nft-trademark-infringement. Accessed 19 May 2022.

Zduniak, Marvin. Especially Blockchain. https://espeoblockchain.com/blog/decentralized-organization. Accessed 24 May 2022.

This is an opinion article; the views expressed by me. Follow Me on Twitter: @hkpltw And @Terry_Terence97