DAOs are novel models for organizing human cooperation. They utilize blockchains to proffer new paradigms for alternative work and governance based on decentralized collaboration and organization.
Humanity has witnessed many technological revolutions that have changed the way we work. Anyone conversant with the internet would notice that humanity is edging towards a new age of radical (if not complete) decentralization and community-governed organizations.
There is a deviation in the work model from the traditional centralized organizational hierarchy to more democratic and autonomous organizations and this paradigm shift is spear-headed by DAOs.
The key component of this paradigm shift is replacing centralized monopolies with people-driven and democratic structures called DAOs.
“Decentralized autonomous organizations are disrupting whole sectors. From finance to social networking to philanthropy, these code-driven, community-governed entities are changing the way we work.” World Economic Forum
This article seeks to discuss what DAOs are, the types of DAOs and the benefits companies and organizations reap from becoming decentralized.
DAO stands for Decentralized Autonomous Organizations and they are entities devoid of central leadership. This means that decisions within such organizations are made from the bottom-up rather than the atop-bottom hierarchical structure that you would find prevalent among highly centralized organizations.
DAOs are companies built based on transparent rules written in computer code and properly defined by a smart contract.
As suggested, DAOs are:
- Decentralized: The major feature of DAOs is that they are owned and governed by their community.
- Autonomous: DAOs are governed by their members and independent of a central authority, like the government or any individuals.
- Organizations: DAOs comprise of people aligned in a common interest, with no single leader. They collectively own the company and work together, often across borders, within the project and its platform.
Most DAOs are either technically- or socially oriented.
Technically-oriented DAOs usually focus on building in the crypto space. They tend to perform more of their actions on-chain.
Socially-oriented DAOs primarily exist to connect groups of people and find new ways for them to interact and convene. Their governance is more often off-chain, or non-existent.
They could also be classified based on the industries they’re involved in, the way they’re organized, or the services they provide. Some types of DAOs include:
- Protocol DAOs help projects and protocols to draw power from core contributors in the community for the sake of building the community. ERC-20 tokens (exchangeable tokens that represent rights, ownership, and assets) are usually issued to the community and have secondary value in the market, enabling holders to enjoy governance rights. You have the authority to propose, vote on and implement proposals that affect the network by being a token holder, making it possible for you to be an owner as well as an operator of the project through your involvement in its community.
- Social DAOs establish collaboration and friendship between a group of strangers on the internet. They are optimized for community growth rather than profit-oriented and provide a platform for you to meet other people and interact with them.
- DAOs: As a member of an investment DAO, you and other members get to pool resources to invest in projects that you all believe in. Investment DAOs are mostly about returns.
- Grant DAOs exist as a form of community support for pre-existing projects. Through grants, these DAOs seek to open pathways to new Web3 contributors, advance the broader ecosystem, and support promising projects.
- Service DAOs act as talent aggregators, pulling together human capital, which can be directed towards certain projects.
- Media DAOs produce public content. The rewards from such content are shared across the group, while governance is also communal. Stakeholders may help decide the topics to cover and can also contribute by managing resources.
- Collector DAOs unite contributors around certain assets or collectibles. NFTs are a common collectible choice.
- Creator DAOs are like fan clubs that center themselves around an individual. Beyond pure fandom, stakeholders can also actively contribute to organizations that support the creators they are huge fans of.
The DAO landscape is at its inception but already quite massive.
Whatever you are seeking or trying to do, there is a DAO out there for you, irrespective of your industry and the specific benefits you are looking to acquire.
Centralized companies have traditionally depended on labor, usually controlled through wages. DAOs, however, try to achieve the creation of value by relying on a decentralized framework in which you as a worker or user, together with other stakeholders, have true ownership of the entity. Leadership within DAOs is fluid and self-governed. Therefore, as a contributor rather than an employee, you are naturally encouraged to be authentic, original, and result-oriented for the sake of the community and personal growth.
The members of DAOs are empowered via voting rights. Investors are also allowed to send, receive or store value globally, both automatically and anonymously. Besides, DAOs help society, in general, deal with restrictive bureaucratic systems.
Not only do DAOs incentivize individuals for their participation, but they also fundamentally change how a contributor thinks about effort and labor.
All work is grounded in the pursuit of a larger purpose, of which the upside is shared. Ownership imbues feelings of creation and success — evident by how natural it is for you as a worker to feel more financially and psychologically incentivized to support peers, uplift the work of others, leave ego at the door, and do your best work than a traditional worker.
“Organizational structures of today demand too much from a few, and not much at all from everyone else.” — Gary Hamel, Director of London Business School Management Lab
DAOs are organizational structures of the future and many organizations have taken advantage of the DAO work model to significantly more output, engagement, community achieve education, personal growth, and income. A prime example of such an organization is DIA.
The DIA DAO is a framework to enable you and the entire community to develop and grow the DIA ecosystem, earn incentives, and connect while having fun.
DIA DAO is a perfect example of good DAO practices at work, seeing that it is on a progressive path to complete decentralization.
In this journey towards maturity, the next milestone for DIA is the completion of its operational infrastructure, incentive mechanisms, and forums for the DIA community to organize and mobilize.
DIA is already introducing most company verticals to the DAO and has built a framework to effectively run its operations. Also, DIA as an organization benefits from the DAO work model, as it can achieve its goals by utilizing its decentralized workforce through the effective distribution of responsibilities, leveraging of the community’s skills, incentivization of community participation, and building of DAO-to-DAO relationships.
Considering DIA’s adoption of DAOism and how it is continually upturning the traditional business model, there is a potential for a structural shift in how organizations do business.
DAOs will revolutionize how businesses and organizations are run, and DIA is well on its way to becoming a market leader!
Considering factors like how fast DAOs can raise money due to crowdfunding, more companies will inculcate the DAO work model to reap the benefits it has to offer.
Join the bandwagon today and be an active member of a working DAO community like the DIA DAO! You can begin the journey of learning, employing, and developing your skills while building a portfolio in Web3 by joining the DIA WorkDAO Discord.
For more information, check out their Twitter, LinkedIn, Telegram, GitHub, and Medium. Don’t forget to also check out DIA’s Alpha Deck and here is a step-by-step guideline to accelerate the whole process.
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