In 2017, a blockchain-based
organization known as
Constitution DAO raised $40
million in Ethereum to bid for a
copy of the US Constitution.
Despite losing the bid, the
project gained worldwide
attention. It serves as an
example of how decentralized
organizations are shaking up the
way we think about them.
What's a DAO?
A
DAO (decentralized
autonomous organization) is
a self-managed organization
that's defined by a set of rules
that are embedded in a computer
program. Unlike traditional
hierarchies, it allows members
to function independently.
Instead of having a centralized
structure, decentralized
organizations can make their own
decisions and manage their
resources.
DAO Potential Benefits
Due to their unique structure,
DAOs promise to enable a focus
on community instead of just
profit. This could have
significant implications for
businesses and society as a
whole.
While they can be challenging,
the potential advantages of
decentralized organizations are
still significant. For instance,
US corporations are still
structured like they were during
the 1600s.
The pursuit of profit has been
the fuel of capitalism. It has
led to numerous changes in how
businesses operate, but it has
also caused various problems
such as income inequality and
environmental damage.
Due to the shortcomings of this
system, B Corporations have
emerged to try and take on more
responsibilities. Unfortunately,
despite these efforts,
corporations are still not doing
enough to address some of the
most important issues facing the
world.
Why Using DAOs Could Be the
Answer
When blockchain technology was
first developed, its creators
focused on the potential of
decentralized cooperation and
transparency. The concept of
this new form of organization
ensured that the interests of
the whole community were
prioritized.
Despite its decentralized
nature, the prospect of
establishing a decentralized
organization is still very
exciting. It could help us
rethink how we organize
ourselves.
There have been many cases where
decentralized platforms have
been abused to maximize profits
for their shareholders. A
decentralized experience would
allow people to have more
freedom and choice. It would
also allow markets to set their
own prices and provide better
quality to consumers.
DAO Hurdles to Overcome
Despite the promise of DAOs, the
system is still far from
perfect. Even though
tokens have
voting and participation rights
in a DAO, the organization still
has to consider the connections
between real-world activity and
the platform.
Even though blockchain
technology can enable us to
interact with each other more
seamlessly, our lives remain
very much in the physical world.
To avoid becoming a liability, a
DAO must first establish a
method of dealing with
real-world issues. For instance,
if a platform caused an injury,
a participant would need to have
a way of proving their claims.
A physical good that DAO
purchases will also require
various forms of insurance and a
tax accountant. Even though it’s
autonomous, a DAO still has to
follow the same rules and
regulations as an online
organization.
Despite the challenges involved,
the potential benefits of DAOs
are still very promising.
Motivated individuals are still
looking for ways to make their
businesses more
sustainable and
profitable.
With so many pressing social
issues that need to be
addressed, it is time to start
thinking about ways to organize
ourselves differently. Through
the
use of blockchain technology,
we can finally solve these
problems.
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