How DAOs are Changing Communities
By: Carin A. | 08-06-2022
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In Conclusion
DAOs enable individuals to collaborate, develop and manage projects, own assets, invest, and operate as a traditional organization while ensuring greater transparency, honesty, and shared governance. Turning around the same conventional governance idea and applying it to a community with the same vision can lead to entirely new levels of product development.
Why is DAOs potential interesting?
DAOs could function without a hierarchical structure, giving anyone in the organization a chance to share their unique ideas while allowing others to decide. For this reason, the role of the central decision-maker is minimized and replaced by a community-driven governance process.
DAOs perform three essential functions of an organization. They enter into legal contracts, limit liability, and pay taxes. In other words, they are the web3 version of a union. Think, for example, of a community contributing to the joint development of a product rather than a product engineered and sold to a community. Moreover, since DAOs can be controlled directly via a token, community members can be based anywhere globally.
DAOs are a way to finance projects, govern communities, and share value. The value of the network increases as new users join and support the community. DAOs make it possible for anyone to build and collaborate with people whom they have never met before, without relying on a third party to ensure trust. The collaboration happens through a blockchain, and every contract, treasury, and asset movement is recorded on said blockchain..
What are DAOs?
While DAOs are still in their early stage, the potential and power they have to change the systems set by our society are exponential.
A decentralized autonomous organization (DAO) refers to a non-centralized entity. Since every organization requires a set of rules to follow, a decentralized organization uses the rules set by blockchain technology. Unlike traditional institutions where a decision must be approved by the head of the organization, DAOs are owned and governed by their participating members. Therefore, such communities can enable each member to vote on ideas or plans.
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