DAOs key to close the pay gap

Less than two weeks ago, we saw something historic happen: ConstitutionDAO led the largest crowdfund for a physical object to date, raising $47 million worth of Ether in just a few days. Their goal? To purchase one of eleven rare copies of the U.S. Constitution, a true attempt of ownership by the people, for the people.

Even though ConstitutionDAO ultimately lost the bid, what we have left is more than a conversation. Now, we find ourselves in the middle of a movement, with a growing number of individuals looking to DAOs and the unique potential they have to transform society as we know it.

This is all in light of a year marked by unprecedented shifts in our financial landscape: NFTs are selling for millions of dollars apiece, bitcoin crossed a valuation of $69,000, and web3 leaders like ENS domains are awarding their early adopters with 5-figure airdrops. Still, in spite of all of this dynamism in the wild world of DeFi, the wage gap remains an ever-present problem for women in the U.S. Today, women only make $0.82 for every dollar a man makes—up just one cent from 2020. What’s even more disheartening is the investment gap. According to a study by Carta, female employees own $0.47 for every dollar of equity that male employees own.

However, DAOs are set to change that. Right now, they’re the most promising tool we have at our disposal to truly upend some of the most insidious disparities in our financial system.

What exactly is a DAO?

DAO stands for decentralized autonomous organization. That’s a mouthful, but the main idea is that they’re internet-native organizations that are collectively owned and operated. This is made possible by blockchain technology. Ownership and governance rules are built into the very structure of the organization and are auto-executed via smart contracts (code that cannot be changed unless there is a majority vote to do so).

DAOs are still in their infancy, and there is a lot to learn in terms of how their ideals will play out as they continue to become more widespread. However, there are a few concrete reasons that make DAOs a likely candidate to close the wage gap for good:

  • They offer women significant ownership in the organizations they are contributing to
  • They foster a more inclusive environment through the use of transparent blockchain technology
  • They offer women the flexibility that has long been missing from the traditional workforce

Ownership creates empowerment

Ownership is essential to leveling the playing field—that much is clear. However, in a traditional company, ownership is negotiated before someone does the work, which means equity is likely to go to the employee who’s best at advocating for herself, not to the employee who does the best job. The New Yorker writer Adam Davidson notes in a recent essay that this “leads to men owning more than twice as much of a company than women with the same experience.”

DAOs, on the other hand, ensure that all members have access to governance tokens, which enable equitable ownership. Some DAOs are even structured so members earn tokens based on specific tasks they accomplish, contributions they make, or simply for showing up to meetings. In this way, ownership is directly correlated with merit.

DAOs can vary in their purposes. Some are project-oriented, like ConstitutionDAO, while others are philanthropic, like Kimbal Musk’s Big Green DAO. But for those that aim to participate in an IDO (an initial DEX offering: the launch of a cryptocurrency on a decentralized exchange), contributors can earn meaningful ownership through opportunities that haven’t been previously available to all. For women especially, this is a chance to drive empowerment like never before.

Transparency fosters inclusive voices

DAOs operate under a flat and transparent structure, meaning there’s no corporate hierarchy, no CEO, and no way for a shady CFO to fudge the books. Linda Xie, cofounder of Scalar Capital, explains in her essay, A Beginner’s Guide to DAOs: “Since a DAO’s balance sheet exists on a public blockchain, it is completely transparent at all times, down to every single transaction.”

DAOs run on smart contracts, so, when money or other resources are moved, it’s done in accordance with the code that the contributors agree to, or, if a change is proposed, it’s done along the lines of the majority vote by DAO contributors. Votes and smart contracts cannot be tampered with since everything is transparent. That means when it comes to making major decisions in the DAO, allocating resources, or giving out pay raises, the structure of the organization itself prevents any isolated instances of sexism that might occur in the decision-making process.

Flexibility drives equal opportunity

Studies show that women often see a steep decline in earnings after they have their first child, while men see little to no change in their salaries during this time. While the data is inconclusive as to why this is the case, long hours required for high-paying jobs might be the cause, meaning many women feel obligated to turn down a better salary so they can properly care for their children.

One of the most powerful things that DAOs have to offer is the opportunity for women to work from anywhere at any time. Since these organizations are native to the internet, most DAOs follow a remote work structure that allows contributors to work according to their desired schedule (in fact, many DAOs are made up of global contributors). Additionally, DAOs provide multiple streams of income via rewards earned from contributions, interest accumulated from providing liquidity to the network, and from distributions or other residuals earned from the DAO’s activity.

Ultimately, the novel governance structure introduced by DAOs paves the way for women to gain access to the kind of assets that could close the wage and investment gaps for good.


Izzy Howell, a core contributor at Cypher, is an artist and entrepreneur whose work has been featured in Teen Vogue and Harper’s Bazaar.