<\/p>\n
In the last few years, world governments have become increasingly interested in blockchain technology\u2019s potential to enhance the complex process of governing. So far, examples include institutional NFT marketplaces<\/a> that stand to make visits to the DMV a thing of the past, while NFT sales envision Web3 as fundraising channels for political campaigns<\/a>, and even national defense<\/a>.<\/p>\n But the Japanese government may be among the first to explore the possibilities of Decentralized Autonomous Organizations (DAOs).<\/p>\n On November 2, the Digital Agency of Japan announced its intentions<\/a> to convert its Web3.0 Study Group initiative into a full-fledged DAO. The aim is to grant a study group the means to more deeply survey Web3 and all it has to offer, and in turn, influence the Japanese government\u2019s further investment into Web3 technologies and systems.<\/p>\n And depending on how things go for Japan, the practical merits of a core Web3 feature could see new test cases that will serve as a crucial model for the rest of the world \u2014 and potentially outpace some private sector implementations of blockchain technology.<\/p>\n Decentralization is one of the core tenets of Web3, implying that no centralized hub of power has overbearing authority over the actions and experiences of the wider community. So it makes sense for the next stage of the internet to organize itself to work autonomously. As a structural means for communities to perform checks and balances on themselves, DAOs are, in theory, fool-proof. Thus, the term, decentralized autonomous organization<\/a> (DAO), was born.<\/p>\n And in theory, DAOs allow Web3 communities to scale and grow without the risk of collapsing into an oligarchy, where the few rule over many. For most DAOs in Web3, gaining membership in a DAO could be as simple as purchasing an NFT<\/a> or donating a fixed sum of crypto to a crypto wallet<\/a> address. Once you\u2019re in, you\u2019re in<\/em>.<\/p>\n So what does that mean? On paper, all members of a DAO hold comparable levels of authority over its direction and future. It functions as one entity, and democratically divides decision-making processes so the entire group has a say. Some might think this is an open invitation to chaos, but DAOs are also held together with a technology the NFT community uses every day: smart contracts<\/a>. These smart contracts function as the rules of a DAO, ensuring the rules are enforced in a trustless, objective manner.<\/p>\n Since Japan\u2019s DAO is part of a government agency-led initiative, its aims are to enhance the Japanese government\u2019s capabilities \u2014 specifically, the DAO hopes to serve as \u201ca role model in the future,\u201d and promises to publish its \u201cestablishment template\u201d along with any other pertinent documents, according to a translation of the Digital Agency of Japan\u2019s announcement. This could enable the Japanese government to streamline the process of forming a DAO should it ever decide to go that route again, even if through the efforts of a state-sponsored agency.<\/p>\n Depending on the study group\u2019s findings as it maintains and operates its DAO, the Japanese government may push forward into Web3 \u2014 or pull out entirely. Despite the country\u2019s reputation as a technological powerhouse, much of the country remains stuck in the past. Fax machines remain a mainstay<\/a> in Japanese offices to this day, and Japanese society at large remains cash-based<\/a>. <\/p>\n Reportedly, the DAO will enable its members to \u201crecognize issues and possibilities through the user experience of the DAO, and deepen the discussion of the study group.\u201d Following the collection of more data, the \u201cWeb3.0 Study Group DAO\u201d hopes to uncover \u201cwhat can be done with DAOs, issues that DAOs cannot solve,\u201d to discern the practical limits of DAOs.<\/p>\n Initially formed in July 2022 under the Japanese government\u2019s Ministry of Economy, Trade and Industry (METI), the Web3.0 Study Group began as a research project<\/a> meant to explore the unique creator economies<\/a> forming thanks to Web3 in the rest of the world. During the Web3.0 Study Group\u2019s preliminary stages as a DAO, it\u2019ll dive into that field of study on a much deeper level, thanks to a planned initiative to distribute tokens amongst its members, per the announcement.<\/p>\n The DAO members will uncover whether members can \u201cequally share the tokens necessary for the launch and operation of the DAO.\u201d As for who <\/em>would comprise this newly-formed DAO, the announcement indicated that in addition to the members of the initial study group, the Digital Agency of Japan\u2019s secretariat \u201cand related parties\u201d will make up the initial core membership. New members will be chosen for inclusion into the DAO if deemed necessary by the study group as it \u201cgradually [expands] the scope\u201d of the study.<\/p>\n While the Japanese government has made careful, measured progress in fully engaging with Web3, its private sector has been far less tentative. Take Japan\u2019s financial sector, for example. The formation of this DAO comes months after the Bank of Japan (BoJ) scrapped its plans<\/a> to launch a central bank digital currency for the country. Conversely, the Sumitomo Mitsui Banking Corporation (SMBC) doubled down<\/a> on onboarding Japanese citizens into Web3 earlier this year, with a planned token business in the near future. Should the Web3.0 Study Group DAO prove successful, the Japanese government might take the SMBC\u2019s lead in Web3.<\/p>\nWhat\u2019s a DAO? And should governments form them?<\/h2>\n
A state-mandated Japanese exploration of Web3<\/h2>\n
Blockchain and the government<\/h2>\n