Money is changing — and it’s a lot different from when you were a kid.

You remember your grandmother’s visits when you were younger. She always gave you coins or paper currency from her overseas travels. Your mom bought a collector’s album and by the time you inserted the last coin, you were knowledgeable about many of the world’s leading countries, including their flags, leaders, and landmarks.

In the years since, you’ve witnessed the digitization of money. From mobile payments and peer-to-peer transactions to cryptocurrencies[i] and non-fungible tokens (NFTs)[i], you have seen more innovation in money and digital commerce than any other generation in history. And even greater changes lie ahead, as central banks are due to issue central bank digital currencies and banks are issuing tokenized deposits.

Today, it seems like everyone — banks, governments, and businesses — is trying to figure out what the future of digital money will look like.

Now, that includes you.

You are a young professional with a strong work ethic and a creative mind. You work on the foreign-exchange desk at a bank that buys and sells hundreds of currencies and develops hedging strategies for the bank and its clients. As a management-trainee, you have limited responsibility. But you’ve learned tons about how money is created and exchanged around the world.

You’ve been following cryptocurrencies since you were young and someone under the pseudonym of Satoshi Nakamoto wrote a seminal white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” in 2008. You’ve reread it countless times and have ideas of your own.

Crypto and digital assets appeal to you because you’ve always been a dreamer, someone interested in making a big impact on the world. You admire Apple co-founder Steve Jobs — and his quote that “We're here to put a dent in the universe” has become your mantra.

More and more, you believe the digital currency revolution is where you can put your own dent in the universe. There’s just one problem. Despite studying everything you can about digital assets, you aren’t in the game.

But that is about to change.

Your close friend from college Diya — a software coder who also works for a bank — invites you to lunch. If you are a dreamer, Diya is a schemer — always cooking up new ways to make money. Diya had many side hustles in college, including a dorm-room decluttering service and another renting chickens to urban foodies who craved fresh eggs.

Over sandwiches, Diya asks if you’d be interested in participating in her new side venture, ShoeDAO. She says ShoeDAO is a decentralized autonomous organization, or DAO[i], that facilitates the reselling of high-end sneakers.

Diya pauses. “You know what a DAO is, right?” she asks.

You realize Diya is testing you and gently smile. You’ve done this before. “Sure,” you say. “I think of a DAO as a digital cooperative or governing body that enables people to coordinate and make decisions collectively around a shared purpose. For crypto investors, that could mean investing in start-ups, managing stablecoins, or buying NFTs.

“The DAO uses blockchain[i] to increase transparency and democratize decision-making, unlike traditional organizations where power is centralized, and decision-making is opaque. And once it’s formed, the DAO is run by members who use their tokens[i] to vote. Key decisions are then stored on a blockchain and used to support digital transactions. Right?”“Transactions, yes. And a lot more,” Diya says.

“More?” you ask.

Yes, she says, people can use DAOs to create digital currencies. But they also could use DAOs to manage real estate, automate insurance claims and payouts — and make supply chains more transparent, efficient, and ethical. DAOs can also be used to organize cultural festivals, distribute grant money to social entrepreneurs, and support political candidates or causes. “The possibilities are endless!” she says.

Diya acknowledges that DAOs are so new that their staying power is uncertain. Some early DAOs imploded from embezzlement, cyber-hacks, and a host of other legal, governance, and security issues. But she’s counting on others to get all that right. “Like you and I are going to solve all of crypto’s problems, right?”

You just smile and nod.

For ShoeDAO, Diya says she brokered relationships with suppliers, retailers, and shoe geeks to score high-end sneakers for resale. People who buy ShoeDAO’s currency, known as ShoeToken, can also contribute sneakers to the DAO’s inventory.

Membership in ShoeDAO is open to all, she adds, and the community votes on proposals based on how many ShoeTokens they own. When sneakers are resold at higher prices, the profits are divvied among the DAO members. “That’s lit,” you say approvingly.

Diya offers you discounted ShoeTokens to join. You’re a sneakerhead, so you eagerly accept and spend your evenings immersed in the fine details of ShoeDAO. A few weeks in, you find what you think is a flaw: You realize that members still must buy and sell ShoeTokens using fiat currencies like the dollar or euro in bank accounts. And these bank accounts must be connected to an exchange or outside tokens. You think this should change.

You explain this to Diya and recommend creating a stablecoin issued by ShoeDAO. You’ve grown fond of stablecoins, tokens created by private companies that are designed to keep the same value as another benchmark asset. Fiat-backed stablecoins are typically backed by a government currency, such as the US dollar, euro, pound, or yen, while an asset-backed stablecoin might be designed to maintain stable value relative to a non-currency asset. That makes stablecoins less volatile than popular cryptocurrencies like Bitcoin, Ethereum, or JRR-Token.

Diya asks you to pick one of these options and to make a proposal to the rest of the DAO. You know that the fiat-backed stablecoin should be more stable — but it also exposes you to your local banking system because the DAO would need to hold a reserve of local currency to support the token.

You like the independence that comes with a sneaker-backed stablecoin, but you realize the risks are higher. The value and liquidity of high-end sneakers could be volatile — and determining the true value of each sneaker in the basket could be hard.

“Be sure you make the right decision. I’d hate for us to get sued,” Diya says somewhat ominously.