DAO is an account of how technology is changing the structure of society.
Symbolically, the term DAO originally came from a sphere far removed from crypto - Chinese philosophy. But the meaning is surprisingly consistent with what DAOs already represent in our world.
The DAO is the way.
And if in Daoism we were talking about the correspondence of human actions with certain values and attitudes, Then, in modern reality, we are talking about the emergence of a new stage on the path of the evolution of social & state systems.
Let's understand what DAO is in a coordinating system we already understand - blockchain and crypto, and find out why it's not just a tool for building silly things, but really a quantum leap (OH NO) for all of humanity.
A DAO (Decentralized Autonomous Organization) is a form of organization that is free from government control. Where management is done directly by the membership. And the execution of decisions is guaranteed by fully transparent smart contracts. Each DAO token holder has a vote on platform decisions according to their share. In most cases, each holder can submit proposals for improvements to the platform with a vote. If proposals pass the threshold of approval, they are adopted and implemented on the blockchain.
DAO members are anonymous and can be located anywhere in the world. Therefore, attempts to regulate DAO are as successful as fighting with the air - NONSENSE. And they're already underway (attempts) = Wyoming was the first state to make DAOs an official form of business registration.
Contrary to popular belief, one of the first examples of a DAO was not the Buterin-backed "DAO" of brothers Jentzsch and Stephan Tual
It was DASH cryptocurrency, launched in 2014. It was there that the DAO governance mechanism was applied, with decisions made by the MASTER_NODES group.
However, the token did not have a bright future:
When distributing the coins, the algorithm deliberately allowed a small number of wallets to suddenly gain almost complete control over the management of the token. Subsequently, the coin was actively involved in questionable transactions.
The start has been made
In 2016, the infamous crowdfunding venture fund The DAO was launched. An exploit which, as you may recall, led to the fork on the exalted ETH and overthrew ETC. The gist of the idea was that investors could vote for themselves on where the DAO's funds should be invested.
But what lesson can be learned from this story is that the community had a huge demand for DAO, which exceeded all expectations many times over. The crowdsale raised over $150 million in less than a month (and that was in 2016!). Perhaps no other venture capital fund has had such success in crowdfunding in such a short time.
Since then, many names have already emerged in the DeFi segment, raised through DAO. BitDAO auction attracted $365 million in investment from 9,200 investors. Note - no investment banks (Goldman Sachs, Morgan Stanley and other dinosaurs) were involved.
So - let's turn to the traditional corporate sector and see how big companies are run today.
More often than not, we see four levels:
1. Shareholders (SH) - can number in the thousands: from investment funds and states holding large stakes to APES from reddit. SHs usually receive some sort of report from the company. Sometimes they meet for the annual meetings. And - most importantly - elect the board of directors.
2. The BoD is a watchdog that makes sure the company puts the SH's interests first. This closed club meets several times a year. It receives reports from the Executive Board, approves the CEO's salary and approves the company’s dividend policy.
It is only at the third level of the corporate hierarchy that people actually run the company on a day-to-day basis:
3. The board of directors - people with colossal salaries and bonuses who decide on all operational matters and directly run the company. These people are usually top executives with 20-30 years of experience who manage the rest of the 10-50-100 thousand employees.
4. Employees - in addition to the working class, every company has a substantial middle and back office. Accountants, lawyers, IT and so on.
So why is it so difficult?
These levels of hierarchy were created at a time when it was almost impossible for SHs to be directly involved in company decisions. After all, you would have to take tens of thousands of people to meetings every day or organize conference calls for thousands of people.
What will change with the arrival of the DAO? Everything will change!
We see that layers of hierarchy, as well as many other parts of the corporation, will simply become unnecessary: archaic remnants of the age, vestiges on the body of human evolution.
After all, at the DAO, SH can vote on company policy proposals at least every day. No need to convene a board of directors, pay for conference rooms at the Ritz Carlton or the Four Seasons, rent Maybachs and private jets. No need to keep books and pay for months of audits by KPMG and E&Y. All transactions are visible in real time.
Corporations of the future are doomed to evolve into a DAO form of organization. Those who refuse to change are likely to be recycled into methane by the milestones of history. However, crypto will not be limited to corporations. Not just any legal entity, but entire states can be reborn in DAO.
Even elections are only necessary to delegate political decisions:
Since it is physically impossible to gather 50-100 million citizens at once to make these very decisions. Everyone can know where the money has been spent, and DAO makes this possible. To buy villas in Monaco, a wardrobe full of luxury watches or a private collection of luxury foreign cars? Or hypersonic rockets, free WI-FI for all and a Hyperloop NY - LA?
Dowmload the app here.