Chronicles of Nantang DAO (Part II)

By Jia Fan

(PhD Student, Department of Media and Communication, City University of Hong Kong, Eurybia Researcher)

Preface

In March 2025, with the support of City University of Hong Kong and my doctoral supervisor Professor Liu Xiaofan, I conducted a one-and-a-half-month field study in Sanxing Village (formerly Nantang Village), Sanhe Town, Fuyang City, Anhui Province. During this period, I conducted in-depth interviews with 14 participants, including core members of Nantang DAO, employees of local agricultural cooperatives, and villagers. I also participated in the Nantang DAO onboarding program, daily operations of the Nantang Xingnong Cooperative, and translation work for the Nantang Buzhi DAO translation group.

Although my time was short, I was deeply moved. I witnessed the locals’ earnest efforts to put DAO ideals into practice, as well as the many challenges they faced as pioneers in the rural-building DAO space. These issues are not only unique to their context but also reflect broader difficulties currently facing DAO development.

The "Chronicles of Nantang DAO" series is divided into seven parts: Origins, Gathering and Conflict, What Are the Goals?, Experiments in Incentives and Circulation, Is It Decentralized Enough?, Paving a New Path, and Final Thoughts. These writings aim to objectively document the stories of people striving for change on this land — the faint yet persistent light of idealism in rural revitalization, the frustrations and perseverance in practice, and the most authentic human connections. If these stories can resonate with more people or offer insights to rural builders and Web3 explorers alike, then they have fulfilled their purpose.

This installment includes Parts 3, 4, and 5, focusing on the governance challenges within Nantang DAO: insufficient alignment with rural development needs, scattered goals, imperfect incentive and voting mechanisms, and risks related to external regulation, economic monopolization, and centralized voting power. It also introduces the heartwarming story behind the "New Year Goods Plan."

What Are the Goals?

"Promote the integration of rural development and Web3."

On the homepage of Nantang DAO’s Notion site, the organization’s stated mission reads: "Nantang DAO is dedicated to promoting holistic village development while facilitating mutual learning between rural communities and Web3 ecosystems: 'Seeking DAO-based community models from rural life, and global wisdom from cryptography.'" On the voting platform, its goals are described more concretely: "By upgrading the cultural courtyard of the Nantang Xingnong Cooperative, we aim to gradually establish a base for Web3 partners in the countryside; through deep collaboration with the local cooperative, we strive to build a sustainable points-based system for governance and economic distribution."

From these descriptions, it is clear that Nantang DAO sees itself primarily as a service-oriented rural organization aiming to support rural revitalization through democratic governance and financial empowerment. Specifically, it hopes to use cryptocurrency and Web3 technologies to build a new model of democratic decision-making, enabling decentralized management and allocation of treasury funds to meet local needs such as infrastructure and cultural activities. However, there remains a significant gap between vision and reality. In practice, Nantang DAO often feels like an awkward transplantation of existing DAO models from online spaces to rural settings — failing to truly integrate with fundamental rural needs and lacking focus in its goal-setting.

Democracy Without Villagers, Rural Building Without Locals

In discussions about the relationship between DAOs and rural communities, there is a general consensus: DAOs exist to serve villages, and the village should be the main actor. As the foundational members of rural society, villagers should naturally be at the center of rural development. Yet in Nantang DAO, only two members are native-born villagers (Fangfang and Yang Zhen), who are also employees of the cooperative. Their inclusion was intended to better facilitate on-the-ground operations. The vast majority of ordinary villagers, however, have neither joined the DAO nor participated in its decision-making processes.

Thus, the democracy practiced by Nantang DAO remains internal and limited — failing to meaningfully connect with or mobilize the broader rural community. This approach inevitably results in what could be called “external rural building” — rural development led by outsiders rather than driven by local residents. Due to its shallow integration with the rural community, the sustainability of this model is questionable. Objectively speaking, aside from a few members who have chosen to stay long-term, most members exhibit high mobility and short engagement cycles, further weakening the connection between DAO and village life. At present, both Nantang DAO and its members remain largely outsiders to the village itself.

Scattered Goals, Fragmented Efforts

"Promoting the integration of rural development and Web3" is an attractive and ambitious goal — one that carries inherent legitimacy and broad value appeal. Few Chinese-native DAOs have ventured into rural areas with such aspirations. Yet, in practice, this grand vision has proven difficult to implement. Whether participants are insiders or observers, the question inevitably arises: "How exactly can rural development and Web3 be integrated? What is the practical path forward for Nantang DAO?"

The formation of Nantang Buzhi DAO and the departure of some key members to establish new initiatives in Chengdu have further exposed internal disagreements over organizational direction. The team clearly faces challenges in aligning around shared goals.

"Brother Bing has a clear goal — integrating rural development and Web3 — but other members lack clarity," remarked Yang Yunbiao. When even basic directions and boundaries are unclear, achieving collective consensus becomes extremely difficult. Reflecting on the early days of Nantang DAO, Cikey noted: "The goals were too abstract, and the tasks were too vague." She observed that members worked on different aspects without sufficient understanding of their respective domains, leading to frequent shifts in objectives and slow progress toward consensus. Even after several months of operation, Xiao Bai admitted during an interview: "Nantang DAO doesn’t have specific goals. It’s experimental — we know what we want it to become, but we haven't set clear short-term or long-term targets."

Observations from the Proposal Process

Examining the proposal process provides a clearer picture. As of April 23, 2025, there were 49 completed proposals on the Nantang DAO voting platform, which can be categorized into five types:

• Funding Requests: Over half (51.02%) of all proposals fall under this category, mostly involving local material procurement, infrastructure development, and member incentives.
• Project Plans: 34.69% of proposals, many overlapping with funding requests, covering various projects like ecological agriculture and community development.
• Institutional Development: 13 proposals focused on establishing and revising organizational systems, such as onboarding tasks, contribution point systems, reimbursement procedures, and voting mechanisms.
• Member Onboarding: 6 proposals dealt with approving new members via community votes.
• Other Decisions: 2 proposals addressed collaborations with the cooperative and other DAO organizations (see chart below).

Figure 1 - Proposal Types

The following chart illustrates the evolution of proposal types over time. Over the past nine months, the majority of community proposals centered on funding applications and project planning — especially during the initial and final stages (first and last four months). Institutional development proposals clustered mainly in December 2024, reflecting the initial shaping of organizational structures. Later, more proposals emerged regarding new member onboarding, indicating a phase of regular recruitment.

Figure 2 - Proposal Trending

Further analysis of project proposals reveals a notable trend: the focus has shifted from local rooting to external outreach. Initially, proposals were closely tied to rural production — such as enzyme-making, date tree planting, and construction and book procurement for the community library. Later, efforts diverged into two streams:

1. External exchange and collaboration (e.g., the “Bilateral Enlightenment Plan for Rural Development and Web3,” cooperation with Wuxiang in Chengdu).
2. Local community operation and integration (e.g., ongoing management of the community library and organizing local events).

Building Community or Commercialization?

Whether from an individual or organizational perspective, DAOs must navigate the inherent tension between commercial interests and public value. In many DAOs, members often prioritize short-term financial returns over governance participation, leading to recurring "free-rider" problems — a challenge that contradicts the long-term vision of community-oriented builders. From an organizational standpoint, pursuing productivity and commercial growth may require a centralized structure to improve decision-making efficiency, while emphasizing public goods necessitates decentralized, democratic mechanisms that ensure member equality and transparency — yet this can result in slow and cumbersome processes.

During my fieldwork, I frequently heard the phrase: "Nantang DAO is the least financially constrained DAO." Supported by Liu Bing’s generous funding, Nantang DAO enjoys considerable financial backing — a situation that, while enviable, also carries risks. Yang Yunbiao raised concerns during an interview: "Many people are here for speculation." This highlights the dual-level contradiction within Nantang DAO: individuals face a choice between contributing meaningfully or seeking quick gains, while the organization itself struggles with balancing community integration and commercial viability. Yet personal intentions cannot be enforced — as Bixing aptly put it, "judge actions, not intentions." Therefore, the following discussion focuses on organizational-level goal-setting.

Community building remains central to Nantang DAO's mission, encompassing both broader rural-web3 integration efforts and deeper engagement with the local Nantang community. As a highly active initiative, the “Bilateral Enlightenment Plan for Rural Development and Web3”, proposed and funded by Liu Bing, is led by core members like Bixing and rural development expert Liang Shaoxiong. By supporting exchanges between rural teams and Web3 communities, the plan has enabled members to attend domestic and international Web3 events and conduct outreach at universities, generating some influence within the industry.

In terms of local integration, Yu Xing noted: "There’s no disagreement about wanting to integrate; the debate is about how." Jump, known for his focus on public goods, has become a widely recognized advocate and practitioner of grassroots integration. He stated: "When I don’t have to worry about making money, I want to do things that truly matter." He emphasized that he was not advocating for passivity, but rather investing in meaningful work with eventual returns — including economic ones.

At the same time, members have reflected on the commercialization angle. Cikey expressed her early confusion: "What kind of economic value can we generate without having done anything concrete yet?" After months of experimentation, the team gradually recognized the model’s economic unsustainability. For instance, Yu Xing argued that "throwing money at local integration without market pressure leads to resource waste." He added: "As long as we keep relying on Liu Bing’s funds, we can't prove ourselves as an independent autonomous organization."

Still, rather than focusing on short-term profitability, the community currently prioritizes practical, real-world rural-building projects and use cases. As Bixing summarized: "Although our immediate goal isn’t profit, we need to engage in concrete actions — sharpen our skills, understand real needs, and eventually explore monetization possibilities."

For a newly formed organization, too many goals can lead to fragmentation and prevent deep emotional and value-based alignment — ultimately weakening collaborative cohesion. Rapid shifts in direction also raise concerns about continuity. Most members believe commercialization and community building aren't inherently contradictory; they’re simply exploring different paths based on their own experiences. However, one objective reality persists: internal disagreements over goals often lead to scattered resources and competition for attention. Pianpian shared during an interview: "Those who are better at writing proposals and securing funding tend to hold more power and control more resources."

At the time of my fieldwork, core members Yu Xing and Bixing had already traveled to Jianta Village in Chengdu to explore the feasibility of a DAO-driven startup incubation project, while Jump remained in Nantang, organizing daily Web3 activities (such as translation and writing groups) to deepen local integration. He said: "I feel like my experiment hasn't ended yet."

Experimenting with Incentives and Circulation — The Nantang Bean (NT)

DAOs typically govern through tokens — digital assets that serve both incentive and governance functions. These tokens are usually collectively owned and used to vote on community proposals. Less than a month after its formal launch, Nantang DAO moved forward with its token issuance plan. On August 20, 2024, the Nantang Bean (NT) was launched on Optimism¹, with an initial supply of 10 million. Each NT was pegged to the value of one Chinese yuan (RMB).

Functionally, the Nantang Bean serves dual purposes: recording contributions and acting as a voting right credential. On one hand, Nantang DAO uses a labor-hour system to track member contributions, which members log themselves via the Fairsharing platform. According to current standards², each hour of work entitles the member to compensation equivalent to RMB 60 in ETH and 60 Nantang Beans. Although labor-hour validity primarily relies on peer review among members, adjustments can be made through voting when necessary — ultimately depending on community consensus.

On the other hand, the Nantang Bean also serves as a governance token. Members holding more Beans gain greater voting weight in community decisions. This design — directly linking contribution records with governance rights — essentially forms a governance-incentive mechanism, theoretically encouraging higher levels of participation and autonomy.

Limitations of the Labor-Hour System

Despite taking a significant step forward in incentive design, Nantang DAO’s current “contribution recording” system faces several challenges in practice, including unclear access criteria, rigid evaluation standards, and ineffective peer-review mechanisms.

Pianpian shared his experience: he participated in farming and even helped start a village band, yet struggled to record his hours. He recalled: "I tried logging two times, but both were questioned in the group chat — 'This doesn’t seem like what Nantang DAO does' or 'This hasn’t been officially approved yet.'" This reflects the lack of clear access standards and insufficient transparency in the current system. These invisible barriers effectively exclude many contributors.

Yu Xing, however, believed Nantang DAO aimed to "lower entry barriers and encourage self-directed exploration." This divergence in perspectives further underscores the confusion caused by ambiguous access rules.

Community members broadly agree that the current "equal pay for equal time" model has notable shortcomings. For example, Biao Ge, Xiao Bai, Shuhui, and Cikey all pointed out that differences in experience and efficiency among members mean paying solely by hours "indirectly encourages inefficiency." Jump further observed that effort and reward often felt mismatched, causing a sense of imbalance. If Member A logs 10 hours but produces little, others might resent the compensation received. Moreover, tasks vary widely in nature, making time spent difficult to quantify. Combined with some members’ reluctance to self-report hours, the issue becomes even more complex.

Biao Ge lamented that this mechanism created distance among members: "Everyone feels uneasy, thinking others are taking advantage. The most intense arguments in the group chats always revolve around labor-hour disputes."

Did the peer-review mechanism help mitigate these issues? The answer appears limited. Xiao Bai explained: "People don’t really know each other’s work well enough to give fair evaluations. Also, members are generally conservative and avoid giving negative feedback out of consideration for others." This reluctance undermines the mechanism’s effectiveness. When asked, Pianpian gave a blunt response: "I just stopped engaging with him." This shows that the peer-review process not only failed to resolve conflicts but also became virtually meaningless due to low participation.

Faced with these challenges, Nantang DAO is internally exploring reforms to its incentive system. Currently, the community is shifting toward project-based funding applications — where disbursements depend on project outcomes. Some proposals now include milestones, allowing phased evaluations and staged fund releases. Additionally, certain members have suggested adopting a retrospective incentive approach — distributing funds after task completion based on output quality.

Though promising, these reform directions remain unproven, and the community has yet to settle on a mature solution. Disagreements persist over which incentive models should apply in different contexts. These debates are closely tied to broader issues such as internal tensions and unclear organizational objectives. Balancing flexibility and standardization in incentives — while fostering innovation and ensuring fairness — remains a key challenge for Nantang DAO.

Circulating the Nantang Bean

Beyond its roles as an incentive and governance token, the Nantang DAO community has been exploring additional use cases for the Nantang Bean (NT) — aiming to expand its function as a medium of exchange within the local economy. One of the most notable experiments was the “New Year Goods Debt Settlement and Contribution Points Promotion Plan”³, launched around the 2025 Spring Festival.

This initiative was ambitious in scale: it aimed to allow creditors from the cooperative’s mutual fund program to redeem NT for New Year goods. The dual objectives were:

1. To help alleviate the cooperative’s long-standing debt issues.
2. To create real-world usage scenarios for the Nantang Bean.

Under the original plan:

• Nantang DAO would mint an additional 20% of NT (a total of 38,400 beans) and transfer them to the cooperative's wallet.
• The cooperative would then use these tokens to exchange ETH from the DAO treasury.
• With the ETH proceeds, the cooperative would purchase essential daily necessities (e.g., rice, flour, oil).
• These items would be distributed to creditors, with each person allowed to redeem up to 400 RMB worth of goods using NT.
• The cost of these goods could then be used to offset debts owed by the cooperative.

At the planning stage, this circulation experiment appeared highly promising — designed to cultivate villagers’ habit of using digital tokens through clear mechanisms, system workflows, and redemption rules.⁴ However, reality diverged sharply from the blueprint.

The envisioned scene — villagers independently scanning QR codes and using NT on their own — never materialized. Instead, all transactions had to be manually processed by Yang Zhen, the cooperative’s administrator, who operated wallets behind the scenes. According to Liu Bing, there were even attempts to assist elderly users by writing down wallet recovery phrases⁵ — a practice that was quickly halted due to security concerns. For most villagers, the technical barrier and complexity of cryptocurrency wallets remained too high.

Despite achieving short-term circulation, the system exposed several critical flaws. Reflecting on the entire New Year Goods Plan, intern Jianqiao offered a blunt assessment: "This only added costs. Villagers don’t care about points; this approach doesn’t actually solve people’s problems." The mismatch between the circulation experiment and villagers’ core needs — particularly their desire to cash out outstanding debts — became apparent. Some younger creditors openly stated, "We only want cash, not goods." Elderly participants like Old Chang and Old Liu accepted the tokens more out of necessity than preference — "Better than nothing," they said, reluctantly adapting.

Moreover, the value of daily essentials paled in comparison to the weight of accumulated debt. During a village meeting organized by the cooperative, several creditors suggested that if NT could be expanded to cover agricultural inputs like seeds and fertilizers, they would be much more willing to adopt the token.

From the perspective of actual usage, this circulation experiment fell far short of success. Yet, a surprising discovery emerged from data analysis conducted on April 19, 2025. By tracking publicly available wallet addresses of Nantang DAO members, I observed a significant drop in token holdings among key figures including Liu Bing, Bixing, Jump, Yang Zhen, Fangfang, Ruosong, and Yafeng around January 2025. Among them, Jump experienced the sharpest decline — over 70% reduction. Yang Zhen practically "all-in" his entire NT balance (see chart below).

Figure 3 - NT Holding Trending

Meanwhile, analyzing the overall NT wallet distribution revealed that while the total supply was around 100,000 beans, nearly 40,000 beans were held in the cooperative’s wallet alone — significantly exceeding the originally planned 20% allocation (see chart below). It wasn’t until later inquiries that I learned the heartwarming story behind the New Year Goods Plan.

Figure 4 - NT Issue Trending

Collective Effort: The Heartwarming New Year Goods Plan

Approaching the end of the year, the cooperative faced immense pressure — with many creditors and limited funds. On one side were villagers whose life savings had vanished overnight, facing urgent needs such as medical expenses and living costs. On the other side was a cooperative teetering on the edge of collapse.

Although the idea of using NT for debt settlement was already in place, the cooperative’s wallet contained very few tokens — meaning only a small amount of goods could be purchased. In response, members of Nantang DAO and the cooperative voluntarily decided to lend their NT to the cooperative, helping ease the immediate burden.

In essence, DAO members used their hard-earned contribution points — earned through participation in community work — to support the cooperative’s "debt-for-goods" initiative. This act symbolized a rare moment of alignment and empathy.

Learning about this touching story, I realized that although the New Year Goods Plan failed to establish sustainable token circulation and made only a marginal impact on the massive debt burden, it went beyond monetary value. Faced with hardship, people here chose to set aside differences and filled the gaps left by systemic failures with human compassion.

As Liu Bing reflected: "During the New Year Goods Plan, everyone was quite proactive — doing what they could to help the cooperative manage its debts. And under external pressure, we worked together better. The team spirit improved a little."

For the first time since the DAO’s formation, Nantang DAO and the cooperative shared a rare moment of consensus.

This can surely be considered a milestone in the history of “Rural Development + Web3” — where DAO members’ goodwill reached rural communities through blockchain technology, truly embodying the slogan: "Web3 from the soil."

If we reflect on the event, this might have been a plan where only the patron, Liu Bing, bore the cost — but he willingly paid for his dream. In that sense, he didn't lose at all.

Is It Decentralized Enough?

Decentralization is a relatively ambiguous concept. This article interprets it as a distribution of power within an organization’s governance structure. In the context of DAOs, decentralization manifests externally through political, regulatory, and financial independence, while internally it refers more concretely to how voting rights are distributed among members and the dynamic power relationships that emerge during decision-making processes.

The Unignorable Influence of External Forces

Globally, the legal status of DAOs remains largely undefined. So far, DAO-related regulations can be roughly divided into three stages⁶:

1. No clear legal entity (before 2021)
2. Inclusion under Limited Liability Company frameworks (2021–2023)
3. Independent legal entity recognition (after 2023)

Before 2021, U.S. law treated DAOs similarly to general partnerships. Between 2021 and 2023, states like Wyoming⁷ and Tennessee⁸ passed legislation recognizing DAOs as Limited Liability Companies (LLCs). In March 2023, the Utah State Legislature passed the Decentralized Autonomous Organizations Amendments⁹, marking a milestone in which DAOs were officially recognized as independent legal entities in the United States.

It's evident that the U.S. leads in regional regulatory development. Other developed jurisdictions such as Australia, France, and Hong Kong have also begun proposing and discussing relevant frameworks.¹⁰ However, in most global jurisdictions, DAOs still lack formal legal recognition, leading to regulatory uncertainty — and this is no exception in China.

On one hand, cryptocurrency forms the backbone of DAOs, yet issuing token-based assets related to crypto remains in a highly regulated and legally ambiguous zone in Mainland China. When Nantang DAO issued the Nantang Bean, it had to carefully define its top-level design — limiting its use strictly to internal governance (e.g., voting, participation in activities) or local service redemption — avoiding any financial attributes that might trigger legal risks.

On the other hand, although the Chinese government has not explicitly banned DAOs as organizational forms, it closely monitors their potential influence. This was demonstrated during the 2022 “Summer of the Roof Tile Cat” initiative co-organized by SeeDAO — a Web3 event themed around the traditional Yunnan house guardian figure, the Wamao. Originally planned to host over 50 thematic discussions, the main event was canceled due to pandemic control measures, but unexpectedly evolved into a pop-up "Open DAO Pub" experiment on the streets of Dali Ancient City — where over 2,000 participants self-organized NFT auctions, hackathons, and other spontaneous activities.¹¹ This case not only became an awakening moment for Chinese Web3 communities but also sparked global collaboration networks in places like Chiang Mai, Thailand, and Bali, Indonesia.¹²

A similar situation occurred in Nantang. In March 2025, the "Walking into Spring" event — jointly initiated by Yang Yunbiao, Liu Bing, and SeeDAO — originally planned a week-long trek from Nantang to the Taihao Mausoleum in Henan Province between March 1 and 7. Designed as a journey to promote physical and emotional growth among local partners, the event was ultimately affected by external factors.

Due to the timing — just before China’s annual National People’s Congress and Chinese People's Political Consultative Conference (“Two Sessions”) — local authorities recommended rescheduling the march. The original plan was temporarily canceled and replaced with a government-organized bus tour visiting local cultural landmarks and ecological agriculture demonstration projects.¹³ Although this change was not directly related to Nantang DAO and no enforcement actions were taken by authorities, it clearly reflected the kind of external regulatory pressure that DAOs may face in China.

Internally in Nantang, as previously agreed upon between the cooperative and Nantang DAO, the cooperative holds a “veto right” over decisions involving local affairs. To some extent, this too represents another form of invisible regulation.

Monopolized Economic Resources

The establishment and ongoing operations of Nantang DAO are deeply tied to the social ideals of its patron, Liu Bing. As an investor who has long supported both cryptocurrency and rural development, he began donating Ether to the Nantang Cooperative as early as 2017. Later inspired by SeeDAO’s whitepaper, he initiated rural DAO experiments. To date, all costs associated with Nantang DAO — from planning to daily operations — have been personally funded by Liu Bing.

This single-source funding model naturally raises concerns about financial independence, especially within a context that emphasizes decentralized governance. Nearly all members acknowledge Liu Bing's unique influence. Yu Xing and Bixing noted: "In many cases, when Brother Bing speaks, others don’t offer alternative opinions or insist on their own."

Jump, Xiao Bai, and Pianpian, however, emphasized the legitimacy of the current structure:

• Jump stated: "Joining this organization means accepting its rules. I can still disagree with him — if I don’t agree with something, I just don’t do it. When I interact with him, I feel equal, like friends."
• Xiao Bai added: "Liu Bing respects the rules and honors voting outcomes. Even if he withdraws support, there’s still some treasury reserve to sustain basic operations."
• Pianpian candidly admitted: "We don’t have better alternatives right now."

Yang Yunbiao (Biao Ge) was more direct in his critique: "Nantang DAO is fake decentralization — it’s ultra-centralized. In theory, everyone has voting rights and freedom of speech, but in practice, we all know decisions ultimately depend on Liu Bing." He also pointed out that Liu Bing’s central role stems directly from his financial contributions — "If he stops investing, Nantang DAO will effectively die."

Beyond Nantang DAO, even the salaries of Nantang Cooperative employees are currently covered by Liu Bing through personal loans, meaning the cooperative itself also faces issues of economic monopoly. In February 2025, the “Complaining About Liu Bing Assembly” organized by interns under Nantang Buzhi DAO became a symbolic event.

On Nantang Buzhi DAO’s Notion page¹⁴, members revealed several fiscal governance issues:

• Lack of transparency in fund usage
• Exclusion of community members from decision-making processes
• Resource allocation heavily favoring projects aligned with Liu Bing’s vision for “Web3 integration”
• Underfunding or deliberate neglect of other critical areas like rural revitalization
• Liu Bing had even used the threat of cutting salaries to pressure cooperative members into project participation, making them feel treated like pawns and triggering widespread dissatisfaction, severely damaging team morale and cohesion

Members highlighted how this financial monopoly threatens the stability of both cooperative employees and DAO participants, leading to imbalanced project development and difficulties in implementing long-term plans.

Insufficient Decentralization in Voting

For a DAO, a prerequisite for decentralized governance is relatively equal distribution of voting power — meaning a flat structure where no individual holds disproportionate influence. Each member’s voting weight corresponds to their token holdings — in this case, the number of Nantang Beans they possess.

As shown in the chart below, before December 2024, Yu Xing held the most Nantang Beans. After that, Jump, Liu Bing, and Fangfang saw the largest increases in token holdings. By March 2025, these four individuals collectively held over 75% of all Nantang Beans, effectively becoming the "whales" of the community.

Interestingly, despite being the primary financial backer, Liu Bing initially did not hold any formal voting rights. However, his opinions still significantly influenced community decisions. Since he didn't participate in labor-hour recording, he couldn't accumulate Beans through regular contribution channels. Through community discussion, it was decided to allocate 20% of the originally allocated 20% share (i.e., 4% of total supply) from the cooperative’s portion to Liu Bing — granting him voting rights while partially repaying debts he had personally loaned to the cooperative.

Yu Xing joked about the arrangement: "For Liu Bing, having no vote meant having all the votes — so why not give him actual voting rights?"

Figure 5 - NT Holding Trending

Voting Mechanism: Power Balancing and Vulnerabilities

Closely related to voting rights is the design of the voting mechanism, which determines how much real influence each member’s tokens actually have in decision-making.

Nantang DAO follows a classic off-chain governance process — proposal submission, discussion, and voting — primarily conducted via Snapshot, a widely used DAO voting platform supporting multiple voting models. So far, Nantang DAO has experienced three major shifts in voting mechanisms:

1. One Person, One Vote
2. Weighted Voting Based on Token Holdings
3. Weighted Voting with a Cap of 20% per Individual

Before November 1, 2024, when Nantang Beans were not yet issued, decisions were made using a one person, one vote model, with equal voting rights among the seven founding members.

From December 22, 2024 onward, after the contribution system had been in place for about three months, the community shifted to weighted voting based on token holdings.

During this phase, decision-making briefly became dominated by a few members. For example:

• In a proposal regarding a "contribution reward system for non-Nantang DAO members"¹⁵, four members voted in favor or abstained, but Liu Bing’s opposition carried over 38% of the vote, directly determining the outcome.
• In another proposal on "Rural Development and Web3 Bilateral Enlightenment," Jump’s voting weight reached 55.5%, effectively vetoing the proposal.

To prevent such dominance, Nantang DAO revised its voting rules again¹⁶. The new regulation capped individual voting weights at 20% — any excess would be recalculated proportionally. Additionally, proposals required more than 50% participation and over 60% approval to pass.

However, by the time of my interviews in April 2025, the 20% cap was not well enforced. For instance, in a proposal concerning the trial operation of the Village Library¹⁷, Jump’s voting weight still reached 31%.

Xiao Bai explained: "There was no programmer available to adjust Snapshot’s voting mechanism, and since most proposals passed unanimously, we didn’t bother calculating manually offline."

Issues and Risks in the Current Voting System

Currently, Nantang DAO’s voting mechanism suffers from several flaws:

One key vulnerability is that anyone holding Nantang Beans can vote, regardless of whether they are official members of the DAO. This means outsiders who obtained beans through local activities (e.g., rural-building events, New Year Goods Plan) or interns¹⁸ who received token airdrops could theoretically exert significant influence over community decisions.

While the original intention was to encourage broad participation and inclusivity, this openness introduces a risk of centralized manipulation.

Open token-based governance lowers barriers to entry, but may allow small groups with concentrated token holdings to sway outcomes. For example, during the New Year Goods Plan, if over 100 creditors united and colluded with a DAO member to submit a malicious proposal on Snapshot — such as "Nantang DAO assumes full responsibility for cooperative debt" — the proposal might pass under conditions of low voter turnout or inadequate oversight, given the cooperative’s wallet alone held around 40,000 beans.

Although this scenario sounds extreme, if it ever occurred, Nantang DAO could face severe financial risks — and potentially suffer reputational damage if the decision were not executed.

To mitigate these risks, the following improvements are recommended for future iterations of Nantang DAO:

1. Restrict voting eligibility — require minimum token holding duration or community verification
2. Introduce multi-stage review and emergency stop mechanisms — such as multi-signature approvals or council veto powers
3. Control token distribution — prevent excessive minting or airdropping that dilutes governance rights

These adjustments could significantly reduce centralization risks and help ensure long-term stability and fair self-governance as Nantang DAO continues exploring the intersection between Web3 and rural revitalization.

Notes and References

¹ Optimism is a "Layer 2" network that makes Ethereum transactions faster and cheaper, aiming to improve the efficiency of Ethereum. NT wallet address: 0x7563cb33148cD2b929ed85e69F697be13b515Bd0

² https://snapshot.box/#/s:ntdao.eth/proposal/0xd7c359c0cb1deff207d1f8ceb2bea1ca3fd815d8a6dc3297883a28b460480d65

³ The Nantang Bean (NT) is pegged 1:1 with the Chinese yuan (RMB), thus equivalent to 40,000 RMB.

⁴ https://snapshot.box/#/s:ntdao.eth/proposal/0xbe2f78457742f3b30a01ade314bf3a69c5a0dcd0bdb19c8bb370f28a7da68eb9

⁵ A mnemonic phrase is a list of words that contains all the information necessary to recover a cryptocurrency wallet. It is a critical component of cryptocurrency security and can be seen as the "master key" to a wallet.

⁶ zf857.eth. How Legal Recognition Can Lead DAOs Out of Utopian Dilemmas [EB/OL]. TechFlow, March 13, 2023 [Accessed February 28, 2024]. https://www.techflowpost.com/article/detail_11516.html

⁷ See Wyoming Decentralized Autonomous Organization Supplement Act, https://sos.wyo.gov/Forms/WyoBiz/DAO_Supplement.pdf

⁸ See Tennessee Code Annotated, Title 48

⁹ Utah State Legislature. Decentralized Autonomous Organizations Amendment: H.B. 357 [S]. March 1, 2023 [Accessed April 20, 2025]. https://le.utah.gov/~2023/bills/static/HB0357.html

¹⁰ In October 2021, Australia’s Senate submitted a report (Senate Select Committee Report into Australia as a Technology and Financial Centre’s Final Report), recommending that Australia formally recognize DAOs as legitimate corporate structures. In June 2022, French National Assembly member Pierre Person proposed legal recognition of DAOs. In May 2024, Hong Kong Legislative Council member Junius Wu suggested legal reforms were needed to promote DAO development.

¹¹ Guazi. "The Unfinished Summer of Wamao — Guazi: The Pop-up Experiment of Open DAO Pub" [OL]. Foresight News, 2023 [Accessed June 1, 2025]. https://foresightnews.pro/article/detail/41473

¹² Ruiyue. "In Dali, A Web3 Conference Was Canceled Twice" [OL]. QQ News, 2023 [Accessed June 1, 2025]. https://news.qq.com/rain/a/20230127A041Z600

¹³ Wen Qian. "Walking into Spring: A Journey across the Central Plains — In Anhui and Henan" [OL]. Matters, 2025 [Accessed June 1, 2025]. https://matters.town/a/gbvf918jhdho/history

¹⁴ https://meadow-kangaroo-109.notion.site/19f015795cf780fca50ce6cf1a1d189e

¹⁵ https://snapshot.box/#/s:ntdao.eth/proposal/0x2059ea0bd9165641da720267eacf16400f1f7161c852704193c2640634a8ffa6/votes

¹⁶ https://snapshot.box/#/s:ntdao.eth/proposal/0xbfd4791933427fc5b810ccd9360b71218d24a53454eeec3381f18286ea2eb730

¹⁷ https://snapshot.box/#/s:ntdao.eth/proposal/0x4cace033a20cbec94263f651005bf53e7c33ac3072ad1814f7347e4840f66fb0/votes

¹⁸ According to a community proposal (https://snapshot.box/#/s:ntdao.eth/proposal/0x8ce03f897a37e41be19c60aea665f35349e111e7e0bc1841b8034a123635f561), Nantang DAO once issued Nantang Beans as an airdrop to Sushe interns (1,000 points per person per month).

PANews Link

https://www.panewslab.com/zh/articles/31873z07lde1