Are DAOs the Future of Corporations?
A DAO, or a Decentralized Autonomous Organization, is a community-led governing body that makes critical decisions to ensure the long-term success of a crypto project, including allocation of its treasury, upgrades to its smart contracts, and hiring pseudonymous employees. Even though we are only just at the early phases of experimentation, DAOs that live on a public blockchain are already proving to be more transparent and more globally accessible than traditional corporations.
Governance
DAOs are managed by decentralized governance rather than a centralized team. Community members in a DAO who hold a certain amount of tokens can create proposals about the DAO’s future operations. For a proposal to pass, the entire community of token holders come together to vote if they are for or against it. Under this framework, hierarchical structures seen in traditional corporations give way to grassroots collaboration as each member of a DAO oversees the DAO’s governance. It also creates an elegant alignment of incentives – it is in the individual token holder’s best interest to only vote for proposals that serve the collective DAO’s best interest, and as the DAO succeeds, the tokens that each community member holds also increases in value.
Interesting DAOs
There are thousands of DAOs with distinct core functions, but all of them share the same transparency and low barriers to entry. Here are some interesting DAOs to check out:
• RaidGuild: a service-based DAO with a decentralized community of builders and designers who are available to work in the crypto space.
• Opolis: a digital employment DAO that offers payroll, employment benefits, and shared services for its members.
• Yield Guild Games: a play-to-earn gaming DAO that buys NFTs in games and onboards new gamers into blockchain-based economies.
• The LAO: a for-profit DAO made up of experts and experienced builders in the crypto space investing in Dapps.
• Curve: an Automated Market Maker DAO where voting power and revenue share are weighted based on the duration token holders have remained invested.
Tools for DAOs
There are also a number of tools out there made for creating and coordinating DAOs:
• DAOhaus: a no-code platform for launching and running DAOs that is owned and operated by the community.
• Snapshot: a decentralized voting system that supports various proposals and voting types to cater to the needs of DAOs.
• DeepDAO: a data analytics site for DAOs that provides governance and financial metrics such as number of members, voter participation, and assets under management (it also shows that DAOs currently oversee more than $8B).
I have no doubt that DAOs will continue to be a growing force in the world of crypto and beyond. Blockchain protocols have already disrupted traditional industries, such as finance, supply operations, and more, but at their core, blockchain protocols will transform how humans organize themselves, connecting completely disparate individuals through a code-based system.