Crypto’s ‘Friends Forever’ Future Dies in a Day
"Bloomberg Crypto" is a biweekly newsletter published by Bloomberg News in which exploration of the latest developments in the world of cryptocurrency, blockchain, and more is done. In this article, a closer look is given at the rising trend of simp DAOs and the challenges they face in achieving the crypto sector's egalitarian ambitions.
At the heart of the crypto ethos is the idea of uniting everyone's talents to create a decentralized, open-source, and censorship-free future for all. But with the industry facing a $44 billion buyout of its favorite social platform "Twitter", realizing this mission requires a lot of collaboration among its participants. The question is, can they overcome their differences to achieve this goal?
One concept that has gained traction in the crypto space recently is "Simp DAOs". These are small digital communities where fans of popular influencers contribute their time, skills and money to support the influencer's brand. In return, they earn rewards like crypto tokens. Simp DAOs have shown that if the focus is on the individual, the rest can be easy.
However, when three leaders from various simp DAOs decided to band together under one decentralized roof in February 2022, the concept of collaboration among simp DAOs suffered a serious setback. Arguments over whether each DAO's SIMP should receive the same benefits, given that the alliance's creator provided more experience and prizes to the organization, caused the newly established "CreatorDAO Alliance" to disintegrate after only one day.
According to Benjamin Tang, a co-founder of the DAO that created the alliance, one of the other groups called "EuniDAO" anticipated that the alliance would increase its members' incentives to match those of the other groups'. However, many "IreneDAO" members found this to be offensive, so they decided to expel them.
Eunice Wong, the founder of EuniDAO, explained that her simps chose to be a part of the platform and manage the DAO on her behalf, while she's more interested in where Bitcoin's headed next. Meanwhile, Eric Wall, who runs former alliance member “EricaDAO”, suggested that collaboration might not be within the nature of simp queens. "A simp queen doesn't necessarily like competition," he said in an interview.
This development shows that the idea of putting aside differences for a greater cause is only nice in theory. In practice, it's not as easy as it sounds. The divisions among simp DAOs reflect the growing fragmentation in other areas of crypto, making it challenging to achieve the industry's egalitarian goals.
But this is not it, one of the major challenges faced by the crypto industry is, its growing energy consumption. A Texas power official described the power needed to meet the demand of all crypto miners as equivalent to "load of two-and-a-half New York Cities". This highlights the need for the industry to work together to develop more energy-efficient solutions that align with its vision of a decentralized, open-source, and censorship-free future.
On the political front of this, according to the data provided by “2iQ Research”, numerous members of Congress have reported crypto-related investments since 2021.
In conclusion, the rise of simp DAOs reflects the individualistic nature of the crypto industry and the challenges it faces in achieving its egalitarian ambitions. However, with greater collaboration and a shared vision, the industry can overcome these challenges and create a more sustainable future for all.