DAOs Are Powerful And Its Technology Is Disruptive To New Startups.

September 14, 2021

The next wave of companies are decentralized.

keyword search for decentralized autonomous organization.

A Tesla without elon musk. Facebook without mark zuckerberg. Amazon without jeff bezos. can you imagine these companies with their iconic leaders?

DAO is decentralized autonomous organization. It's like a regular organization but instead of being run by a central leader, it's run by its community of users.

Decisions are made through proposals that the community votes on. No more selfish or reckless CEOs.

DAOs work because of smart contracts. programs that are written into the code on blockchain.

how does membership work? By owning tokens or shares in an organization, you get voting powers.

token-based membership: Tokens are purchased or earned. it aligns incentive with DAO. share-based membership: potential members must submit proposal to enter. The more shares you own, the more power you have in organization.

3 disadvantages of DAOs. Voting governance. Voting power is based on shares so the person who buys up the most can end up making decisions.

Legalities. There is a lot of uncertainty around legal liability. There is no CEO to blame.

Slow Decisions. DAOs can be slower to operate. DAO members need to way for proposal to be submitted, discussed, and voted on.

Companies to watch: Dash. Instant payment and private transactions. MakerDAO. Decentralized lending network. Uniswap. Decentralized finance protocol. The Dao. Famous one that was hacked.

We predict that. There will be more organizations implementing DAOs: companies, charities, governments. Companies will experiment with hybrid models. Fundraising will change as companies give tokens instead of equity.

3 DAO opportunities. Services/tools for DAOs. What do DAOs need to operate better? Token-based fundraising. Voting infrastructure. Smart contract code auditing. We are in the early stages of decentralized organizations and they will evolve.

Create a DAO: There are opportunities for startups or non-profits to try using the decentralized model. There may be advantages in fundraising using a token-based system.

Use elements of DAOs: You don't have to make your entire company decentralized. There may be certain elements you want to use. Smart contracts may be a good way to execute actions automatically. Or maybe some people are given voting power through tokens/shares.

Sources

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