A decentralized autonomous organization (DAO) called TheCafeDAO opened a pop-up coffee stand in Seattle last weekend as a test run for what it hopes will be the first retail store operated entirely by a DAO structure.
The modest coffee stand was located outside the NFT Museum in Seattle, and the menu consisted of only one product - pour-over coffee for $5 a cup.
The DAO markets itself as "the coffee shop that belongs to everyone," with customers and employees receiving "coffee tokens" that grant governance rights and discounts with each purchase. The tokens themselves are still in the alpha stage and have yet to be connected to a blockchain, with DAO using last weekend's pop-up as a test run for tokenomics.
It's the latest in a series of DAO experiments seemingly spurred by the sensational (but ultimately failed) debut of ConstitutionDAO last November, proving to many the potential (and difficulties) of DAOs in making real things happen.
The idea for TheCafeDAO originated in a Reddit post by Dan Car, one of the founding members of the DAO, last August. His question, "What if we created a decentralized Starbucks?"
The idea quickly gained traction as the five other core members of the organization all saw the post and volunteered to take on leadership roles and bring the concept to life.
While the group has focused on the Seattle pop-up in recent months, the founders of the DAO hope it can eventually become a larger, self-sustaining entity.
Because the DAO is still in its early stages, the founders are also aware that decision-making is not yet fully decentralized, but that will likely change as the community continues to grow.
"Our goal is for Discord to grow to the point where we don't have to make decisions about the future of the DAO ourselves," Dustin Tong, another founder of the DAO, said in an interview with CoinDesk. "Just yesterday, someone brought up the idea of running a hot dog stand with DAO. That would be awesome."
Coffee with a dose of governance
The back of the DAO coffee token is more complex than your average reward coin.
Each token has a value of $5, which is tied to the price of a 12-ounce cup of coffee. Each time a coffee is purchased from the stand, a new token is minted.
A portion of that coin, about $3.50, is then burned to cover operating costs. The remaining portion is then divided among customers, employees and the DAO treasury. Token holders can either exchange their coins for fiat or hold them for governance rights, with one cup of coffee equaling one vote on any proposals made by DAO members.
Tokens are backed by loans, with lenders promised a future allocation of tokens. (Tong says the group is in close contact with legal experts to avoid regulatory concerns.)
In its two days of operation this weekend, the DAO minted 61 of its coffee knockoffs, of which 12.2 were burned for operating costs, 6.1 were issued to customers and 36.6 were added to the treasury.
For customers, tokenomics essentially works like a decentralized punch card, where each purchase brings them closer to owning a full coffee token.
"In terms of governance, we want to create a list of standard operating procedures that our members will then vote on," Tong said. "We don't want someone spilling coffee and all DAO members voting on who cleans it up, that's just not efficient."
The pop-up was only open for two days, but DAO members are now looking to fundraise to set up a permanent storefront somewhere in Seattle.
TheCafeDAO is not the first DAO to consider physical locations as an extension of its online community. NFT-based projects like LinksDAO and PizzaDAO have similar plans in the works, using the DAO structure to both fundraise and operate a full-scale meat operation.