Fiduciary Dookie

By el Prof
January 13, 2022
Image: cheapinsoho.com

In typical degen fashion I interrupt my work day by constantly doomscrolling on Twitter; I did spend years curating it. This tweet however ended up in front of me because Chad put it there, and not resulting from any due diligence work on my part.

I am a terrible listener and likely scrolled passed this the first time, but I am glad that I was able to listen to Aaron Levie, CEO of Box, discuss the conflict of interest that lies at the heart of organizational structures that are community based, like a DAO.

For profit entities must put their shareholders interests above all else, it is their fiduciary duty. For most businesses at some point this inevitably means reducing product quality to extract more value out of your customers.

What is interesting when it comes to DAOs, is that because the “share holders” are also the customers of the product, the nature of priorities potentially changes because their inherent trade off is between utility and earnings, not more or less profit. If the utility provides greater earnings outside of the DAO, they may forgo profit based priorities with the DAO in favor of product based ones.

All the complexities and nuance of this pondering aside, I believe that ultimately this is a good thing.

One of my major critiques of our current, public entity driven, capitalistic market is that quality is sacrificed for profit, and scale enables artificial moats to be developed and held despite inferior products in the market. Anything that challenges that status quo, to me is a win.

el Prof

el Prof

hey, i'm el prof, but most people call me Connor. Thanks for reading.

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