Can a DAO Build the Next City?

Kings, governments, and businesses have influenced towns and cities for hundreds of years. The Decentralized Autonomous Organization (DAO) is a new concept that enables new ways to organize people and resources.

Typically based on Ethereum or another blockchain, a DAO uses smart contracts to codify governance, allowing for its members make choices together. This leads to an interesting question: could it be possible to use DAOs to build cities?

Governance Without a City Hall

A DAO helps organizations work together and clearly make choices through those who hold tokens, allowing them to vote. Proposals are stored on-chain, and smart contracts carry them out automatically when they are authorized. In a city, this may imply that zoning decisions, budget allocations, or even infrastructure contracts are carried out without human intervention once a vote has passed.

This method clarifies things and holds people accountable. The blockchain records every vote and expense, making it harder for corruption and secret agreements to occur. DAO frameworks, such as Onyx DAO, already include tried-and-true governance modules for key functions like voting and treasury management. In addition to regular voting, some DAOs utilize delegated voting, which allows smaller holders with less voting weight to allocate their votes and enable one address to vote with the weight of all allocated wallets. In principle, this may create a city that is more open to participation and responsive than regular cities.

Making decisions as a group

Community engagement is the base of a DAO. Citizens come up with ideas, talk about them online, and vote directly. CityDAO, a group that bought 40 acres in Wyoming in 2021 with pooled funds, has already tried this out.

These kinds of systems make it easier for people to become involved in their communities. A citizen may suggest a local service, and a developer from anywhere in the globe can provide digital infrastructure. High participation is essential for success, but blockchain governance may make it easier by using mobile voting dashboards, automated alerts, or gamified rewards for participating. The idea is for everyone to be involved all the time, not just during elections.

Paying for a City on the Blockchain

For cities to exist, they require money. Taxes, bonds, or private investors have traditionally provided this. Tokenization may help DAOs with an alternative by making it possible for a municipality to earn money from people all over the world. It can become possible to buy property and build infrastructure by giving out tokens or NFTs. CityDAO sold "citizen" NFTs, which gave holders both membership and voting rights.

Smart contracts guarantee that spending is clear after the money is received. People may vote on plans to develop a road or power system, and the funds will be provided automatically if the plan is accepted. Other models, such as CityCoins, demonstrate how mining earnings or donations from the community might go into a city's treasury. The outcome is a funding system that is open, programmable, and available to everyone in the world.

Tokenized Rights to Land and Property

The most radical use of blockchain in city-building would be land ownership. NFTs might be used to show ownership of property instead of deeds and registers. Each package could become a token that can be moved in seconds without any red tape. It could also be possible to divide ownership into smaller parts, which lets hundreds of individuals co-own property that would be too expensive for them to buy on their own.

As smart contracts let you program them, it becomes possible for tokens to have rules for taxes, easements, or zoning built right in. Moving a plot could instantly start the payment of community dues. A DAO might even impose time-limited ownership, which means that after a certain amount of time, the rights go back to the group. These options may alter the way property markets operate, making them easier to understand and utilize.

Smart Contracts as City Infrastructure

Planning cities generally takes a long time and is often hindered by red tape. Smart contracts could streamline it. It is possible to encode zoning restrictions, construction permits, and service contracts so that compliance is verified automatically. If a proposal meets specific qualifications, it could go straight to a community vote, and licenses or money could be given out right away if successfully passed.

This concept could go even further if combined with smart city technology. Sensors could provide real-time information to contractors, such as water meters that keep track of how much water is being used, air quality sensors that suggest ways to improve the environment, and IoT devices that can report on infrastructure requirements.

Conclusion

As time goes on, these trials may turn into the "network states" that people like Balaji Srinivasan have spoken about: a digital-first country that ultimately gets real land.

DAOs won't take the place of conventional municipal governments anytime soon, but they do provide people a chance to try out new methods of running, supporting, and controlling cities.

About Chain

Chain is a blockchain infrastructure solution company that has been on a mission to enable a smarter and more connected economy since 2014. Chain offers builders in the Web3 industry services that help streamline the process of developing, and maintaining their blockchain infrastructures. Chain implements a SaaS model for its products that addresses the complexities of overall blockchain management. Chain offers a variety of products such as Ledger, Cloud, and NFTs as a service. Companies who choose to utilize Chain’s services will be able to free up resources for developers and cut costs so that clients can focus on their own products and customer experience. Learn more: https://chain.com.

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