Decentralized Autonomous Organizations (DAOs)
The impending proliferation of blockchain applications will usher in the era of decentralized governance. Blockchain technology enables cryptographic, tamper-proof transactions to occur on a well-organized, shared global database. This makes blockchain an excellent fit for managing governance. Governance policies are designed by people, but policy execution is managed by smart contracts to ensure transparency and compliance, and running them on a blockchain makes DAOs immortal, secure, and censorship-resistant.
Here’s a brief list of just some of the innovations of DAOs:
- DAOs can choose how they govern themselves. They can use direct democracy, representative democracy, or multi-chamber governance, and votes can be counted using a variety of voting methods, such as one-person-one-vote, quadratic, force ranking, or a yet-to-be-invented method. They can also use governance to change their rules and methods. They are living organizations meant to adapt with unprecedented speed and scale.
- DAOs can create and issue tokens to represent value or utility. For example, DAOs often provide a product or service to their customers. They can issue a token to their members/workers as compensation, and the members may trade those tokens to the DAOs’ customers for a local currency that members, in turn, can use to pay their bills, such as rent and groceries. Customers then exchange the same tokens back to the DAO for products and services to perpetuate the economy.
- Charitable DAOs can provide operational transparency and governance tools to donors. Donors can see precisely how, why, where, and to whom their donations are being used, and the impact that they had in furthering the cause of the charity/non-profit.
- Like popular social media groups, DAOs are borderless and real-time. They enable global integration to previously inaccessible economic freedom.
- DAOs have tools to provide access to capital and stakeholder management not available to even the largest corporations in our most open economies. DAOs can issue tokens to represent stakes in the organization, and then provide micro-rewards back to token holders from every transaction that sells a product. Literally (and proven), a DAO can share the profit from a sale of a single banana, seemingly infinitesimal, to millions of token holders in real-time with perfect precision.
Find out more about this group by visiting the GBA Working Groups Site