DAO or Decentralized Autonomous Organization has an accounting balance sheet and without centralized leadership. Some may have questions on how a headless organization can accomplish anything. However, crypto projects were built around such headless organizations with collective working forces, such as many Defi projects, including MakerDAO.
DAO is a future form of the corporation led by communities and profits share amount who contributed the most rather than titles. It will transition companies from profit-driven as their motivation into more social goods-driven purposes.
Here is a 1 min summary of the article if you want to skip the reading.
What Is DAO
DAO is a form of governance trigged from crypto projects. People are volunteer to contribute their time and work together to accomplish the same goal with a certainty of monetary compensation. On the contrary, corporations are formed to exploit and make profits from the short-sighted business models.
The centralized organization will create a single point of failure. Whether the CEOs will be corrupted to use companies' resources for their reasons or companies intentionally or unintentionally tradeoff environment to profits. Centralized organizations operated under short-sighted vision to gain profits fast yet sacrifice many other aspects, including their employees’ wellness.
Centralization Is Bad
Centralization is terrible for the long term. DAO is a thinking process that includes all possible solutions to work and implement. Many may fail, but the survival solution is one solution that communities vote for. Centralization is to decide with only a few people who control most of the information. It may conclude fast, but the result is biased.
DAO is a social network that runs on software-enabled communities. Rules are programmable smart contracts that are immutable to human bias, unlike centralized organizations whose rules are to be set by the few who control the resources and information. Instead, DAO redistributed power to communities and rewarded communities with fair shares.
LLC or Limited Liability Company is the standard form of a company’s business model. Everyone knows that LLC protects companies by spreading liability to many shareholders, but the natural history behind LLC was to expand companies beyond private controls. Businesses are used to control by families as units. However, when companies grew more prominent, family members were corrupted, and many lost their business vision by spending out of control on business assets as their family assets. The result was many big companies had never been able to survive long enough.
Corporations are outdated. There are only a few become executive team members, and those are back to the old day drunk by power and resources. They spent just like they own the companies as their own family assets. DAO is a way to make a company fairer to every employee.
There are many spin-offs between DAO and LLC. One example is ConstitutionDAO, which almost outbid private equity companies to buy an original copy of the U.S. Constitution. They are LLC with their treasury department but operating as DAO.
DAO is the organization's future that makes every participant work together toward the same goal and reward more fairly.
This article is also published in Cryptologist as parnership publication.
Photo by nishan joomun on Unsplash
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Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.