HairDAO: where the theoretical benefits of DAOs turn into reality
DAOs have promised a new type of Internet-native organisation that allows people from anywhere in the world, with just an Internet connection and a computer, to join and contribute to. In an age where everything is online, there is an opportunity to create a new type of organisation that isn’t constrained by national borders and local regulations like traditional corporate structures (LLCs or Ltds).
The reality, however, is that the the theoretical benefits of DAOs have yet to be turned into reality. There are a number of reasons for that, but I won’t go into those in this post.
Instead, I’ll focus on a DAO that, in my view, represents the most compelling case of a DAO turning theory into practice.
That DAO is HairDAO.
I’ve previously written about HairDAO, but for those that don’t know, HairDAO is a DAO focused on developing and commercialising hair loss related IP. Members of the DAO are an agglomeration of patients, researchers, doctors and investors that all work together in the interests of the DAO. HairDAO has a native token, $HAIR.
There are several reasons for why HairDAO is excelling.
A core team
HairDAO has a core, full time team. The importance of this might seem obvious to many, but in DAO-land, it is still not. The rationale you’ll hear DAO founders say is that they have a community of contributors that negate the need for a full-time team. That is wrong. There is simply no substitute for a full-time team.
What DAOs do enable, is for these teams to be smaller. HairDAO currently has 3 core team members that are full-time. As HairDAO grows, it will make sense to expand the core team, but it doesn’t need to grow much larger, as if it were a classic biotech company.
An engaged community
Engaged and aligned communities are central to the success of DAOs. The reality today though is that the communities of most DAOs are either unengaged or plagued by infighting. HairDAO is not like most DAOs in that respect.
Venturing into the HairDAO Discord or app, you'll witness firsthand the lively discussions among community members about hair loss, sharing personal stories, experiences, and treatments. Anyone online can become part of the HairDAO community.
In addition to this broader community of several thousand members, HairDAO has a smaller group of roughly 15-20 researchers who actively contribute to the development of new IP. Some of these researchers operate under pseudonyms or remain completely anonymous, known by screen names like Jumpman, Endana, and Catbellyrubs. Don’t get fooled by the perhaps unserious nature of the names, these people are serious researchers. They actively discuss and evaluate new IP, and decide which studies the DAO should fund. They also design studies themselves.
Jumpman, for instance, designed a study that is being executed by a team at the Imperial College of London. I can’t overstate how wild that is. An anonymous researcher that people only know as Jumpman, has designed a study that a team at one of the best universities in the world is now running.
It’s unknown if these researchers received any formal bio training in the past. But that doesn’t matter. They contribute and are listened to because of the quality of their work. Anons on the Internet can now contribute to the bleeding edge of scientific research.
A framework for valuing contributions
One of the key challenges in DAOs is determining how to fairly value member contributions. Without clear methodologies, some members may resort to spamming community channels, hoping that quantity will be prioritised over quality. On the other hand, high-value contributors might hesitate to invest their time and effort, uncertain whether their contributions will be valued at all.
HairDAO developed a scoring system that quantifies individual contributions, assigning each contributor a HairPoints (HP) value. HP serves as HairDAO’s in-app currency, and every quarter, it is converted into an allocation of HAIR tokens. The more HP participants earns, the more HAIR tokens they receive.
HairDAO gamifies this experience with a quarterly leaderboard that highlights the top contributors, the nature of their contributions, and the amount of earned $HAIR.
Establishing a clear framework that translates contributions into earned tokens is important not only for compensating members for their work, but also for demonstrating that working for a DAO can pay your bills.
A first user-base
A DAO's community can serve as a group of users. In other DAOs, usage is largely incentivised by token rewards. In HairDAO, however, the mission to develop cures for hair loss attracts a community of patients who are driven by the desire to regrow their hair, not just to earn financial rewards.
The ability to tap into a network of early users and testers offers significant advantages. For example, HairDAO conducted an observational trial to test the first IP it developed—a topical spray repurposing an FDA-approved drug to regrow hair. A hair transplant doctor in Miami oversaw the study, and rather than spending large sums on participant recruitment, HairDAO simply enlisted members from its community.
Below is an image of one of the participants, before and after the treatment.
Here’s another patient, with more quantitative evidence of hair growth.
Before:
After:
The hair density before and after the treatment was 196 hairs/cm² and 220 hairs/cm², respectively, indicating a regrowth of 24 hairs/cm².
A single mission
At HairDAO, it’s all about growing Hair - both your $HAIR balance and actual hair. It’s the same game, where contributions earn $HAIR tokens in the short term and go towards developing new treatments in the long term.
It’s a singular mission that aligns interests and gets people to row in the same direction. Of course there is a degree of politics, just as there is in any organisation, but in HairDAO it’s less of an issue.
The results have been clear. HairDAO has filed a patent, launched a consumer product, repurposed a drug that is shown to grow hair and is launching its own telehealth at anagen.xyz. I recently had someone tell me that HairDAO is the first use case that could turn them into a crypto believer. I can see more people feeling that way soon.