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DAOs: The Democratized Future of Economic and Business Organization
Over the past five years, several corporations-like entities, with a slightly different organizational structure than we are used to in the traditional corporate world, spun out of nowhere. These entities have no CEOs, no Managers nor do they have a board of directors. To make things further interesting, within only 5 years of their emergence, 20 of the largest such entities currently hold over $6 Billion in assets! These entities are commonly referred to as “DAOs”. The acronym DAO stands for: Decentralized Autonomous Organization, which implies an organization that has no central leadership.
Enter the Reign of the DAO: Aka “DAO-cracy”
I n the simplest words, I like to think of DAOs as coordinated digital working groups. They are native internet communities, collectively owned, governed and managed by their members. They have no one body of leadership, nor do they rely on agency to make decisions.
Under this form of structural organization, interactions and transactions that necessitate voting or decision-making are resolved through a smart contract, and recorded on a blockchain. Smart contracts are a set of rules encoded as computer code, that act as the operating agreement, or the constitution, allowing members to decide on how their organization runs. In certain types of…
