DAO The Way Part 2

By xuanling11 | Crypto Learning | 31 Jan 2022


In part 2, I will introduce DAO or Decentralized Autonomous Organization categories. There are so far 6 types of DAO in the DAO Spectrum. 

 

TL;DR

 6 types of DAO layout in DAO Spectrum. Each has its way to express DAO from corporations alike to complete decentralized autonomous way. Seeking innovation is a key to making such an entity flourish.

 

Factors

There are 6 factors to make the organization become DAO. Decentralized or quasi-decentralized will affect how such organizations operate. Autonomous or quasi-autonomous will affect how such organizations innovate. And a community or an organism will affect how such organizations evolve.

 

DAO Spectrum

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Being the most non-DAO organization as a corporation to the most DAO organization as Bitcoin, we are going to explore each category and how each DAO operates that varies from others.

 

Corporation

The idea of the corporation has existed for more than 1,500 years. The core idea is to assemble people together and lead by one, or a few leaders. From corporations to conquer the country to corporations to conquer other countries' resources, such an idea of organization has been working for many centuries. 

 

The Roman Republic is one of the successful political corporations. To be successful is to dominate and control the power. The most successful corporation of business is East India Company which controls countries with their own armies and controls trading. 

 

Nowadays, corporations are firms dominated in their fields. Employees are working for them not because they are working on their goals but to earn a share of profits that are controlled by the firms.

 

It doesn’t mean corporations are all bad. It is the most effective and proven method for human beings to work together. However, history always showed corporations met their goals, corruption within will bring them down just as quickly as they reached the peak.

 

Quasi-decentralized Quasi-autonomous Community (QQC)

Corporations will hit a plateau of making profits because their structure has been completely saturated and harder to pass through decisions making effectively due to cultural struggle to change and power struggle on the top executives. Therefore, corporations may want to find new ways to interact with their users. They decided to build a community. This type of community is outside of the corporation and they can be a strong force to support firms’ branding. They will be rewarded for their supportive efforts and possibly receive exclusive benefits from the firms. Examples of such DAO are Nike, Adidas. Although they may not announce they are, they are doing what DAO is trying to do. However, such firms are not willing to dive into DAO.

 

Quasi-decentralized Quasi-autonomous Organism (QQO)

When firms are centralized and managed through each level, they can still work as a DAO. Since innovation is a key for them to become successful. They can evolve to become DAO later because their core competencies are relying on innovation. 

 

Such organizations are Apple or similar big tech companies. They are evolving into a DAO eventually.

 

Quasi-decentralized Autonomous Community (QAC)

When companies want to change their operations into DAO. These types of companies will operate through a DAO process. Although their fundings will operate under corporate control. Syndicate DAO is one of those organizations. They received VCs to their executive teams and their operations will have a DAO process to expand the community through a voting process. However, proposals are drafted by management.

 

Decentralized Quasi-autonomous Community (DQC)

When funds are openly distributed, this type of DAO has the strength to operate as a DAO. Although they will have permanent positions to run the DAO so that their vision can be consistently carried out. An example of such a DAO is Bankless DAO. They are openly contributing their funds to projects with specific management of guilds to carry out their tasks.

 

Decentralized Quasi-autonomous Organism (DQO)

When DAO has open funding to allow members to work and improve their services while innovation is a goal to drive their goals and to survive in the industry, Ethereum is one of such DAO. After the DAO failed, Ethereum immediately hard fork and turns the organization around to continue seeking new ways to build up a better system. Layer 2 products continue evolving their specialty to solve certain aspects of the blockchain and improve the system.

 

Decentralized Autonomous Organism (DAO)

Currently, the most fully DAO organization is still Bitcoin. This does not mean there will not be another fully DAO coming. Bitcoin is solely operating without any financial incentives. It continues evolving and seeking new solutions to its blockchain system and many people are working countless times to find a better solution to improve the network.

 

In Conclusion

DAO Spectrum is a guide for you to choose from. It does not mean there are only such ways to categorize DAOs. Crypto has been evolving daily. Such ideas may just be outdated and there will be many more opportunities and new ideas flourishing as I write this article.

 

Stay tuned for this series.


This article is also published in Cryptologist as parnership publication.

Photo by Victor Furtuna on Unsplash
Note: the post was shared on multiple platforms here.

You can refer my previous article lists here
Digital Commodities- the Unlimited Resources of Commodities Has Born
Universal Income in Crypto Way
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Bitcoin ATM Adoption and Its Potential Security Vulnerabilities
When Corporations Are Running By Everyone
The Fundamental Value Is Irrelevant
Coinbase At Huge Reputation Crisis
CBDCs' Flaw Design
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From Bitcoin Standard To Zero-Knowledge Proofs - Decentralization 2.0
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2022 Prediction #3: Zero-Knowledge Proofs or ZKPs
2022 Prediction #4: Regulated Defi On-Chain KYC
2022 Prediction #5: Institutional Crypto Adoption
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2022 Prediction #7: NFTs-Based Communities - DAO 1.5
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DAO The Way Part 1
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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.

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