300 Words for DAO
What is a DAO? How does it work and how different is it from a traditional organization?
In our attempt to describe in a simple way the building blocks of the blockchain world, we come across another fascinating product that can unlock some of the most futuristic applications and utilities: we are talking about the DAO, or Decentralized Autonomous Organization.
A DAO is an organized group of people, with a common vision and that collaborates under an operating model that is fully coded and programmed in one or a combination of different smart contracts.
Enforced by the blockchain, the rules of a DAO, together with all its operations, can only be changed through the proposal and vote of community members and according to the voting system in force.
Everything takes place online and thanks to its decentralized nature, each process becomes trustless and highly transparent.
To run a DAO, everything someone needs is:
A community of people who share common goals and who agree on a set of rules.
One or more smart contracts, in which to formalize these rules, set up all the operations and potentially allocate funds.
An online platform where to make the DAO accessible to all members.
On top of these three components, and depending on the DAO’s structure, other requirements to become an active member might be the ownership of a particular token that opens the gates to the platform or of a governance coin that might be required to propose and vote.
Currently there are thousands of DAOs existing and they manage billions of dollars for the most various scopes and applications.
Here a few examples:
The use cases for DAOs, just like the more generic use cases for smart contracts, are really only limited by nowadays infrastructures and the early stage of the adoption curve, which makes the mainstream rollout still quite far away.
Nevertheless, the ground on which DAOs are being created is incredibly fertile and what we are witnessing is an unmatched opportunity to test, learn and design crazy ideas that one day might completely rewrite how our society works.
In case we managed in our mission to trigger your interest for DAOs, please be aware that there is much more that can be covered.
While we wanted to keep high level, please do not hesitate and go check some of the content below.
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Resources:
Aragon Education: https://blog.aragon.org/education/
Consensys: https://consensys.net/blog/blockchain-explained/what-is-a-dao-and-how-do-they-work/
Ethereum.org — https://ethereum.org/en/dao/
E-stonia: https://e-estonia.com/story/
Coinmarketcap.com DAOs. https://coinmarketcap.com/view/dao/
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