Martin Slaney
So they’re kind of a strong wisdom of crowds idea. The idea is that if the collective makes the decisions, the odds are better that the collectivity will make good decisions."
Noah Feldman (Harvard professor - Tim Ferriss Show Podcast)
DAO (pronounced “Dow”) = Decentralized Autonomous Organisation
Run by smart contracts (blockchain-based automated digital “if-then” statements).
The rules of the organisation are encoded into these smart contracts.
Decisions are made by the majority of participants. So, when a vote passes, actions are automatically executed. For example, funds are automatically sent to the wallet specified in the vote.
The organisation can operate without the need for a central leader or authority.
Members of DAOs often buy their way in, most of the time purchasing a governance token specifically for the DAO that gives them the ability to vote on decisions that are made around how the pool of money is spent and managed, access to gated content and other benefits. These groups can be made up of people from around the world, who often communicate on Discord channels.
Democratise company ownership and decision-making; shifting the decision-making power towards the members of the organisation with a crowd-sourced pool of funds.
Guarantee integrity via immutable transparency - every decision made is recorded on-chain.
Align members toward a collective goal, and build trust.
More easily raise and distribute money.
Decentralisation: DAOs offer decentralised decision-making and governance, allowing a group of individuals to come together and make decisions or take actions collectively without the need for a central authority or leader.
Autonomy: DAOs are autonomous, meaning that they are not subject to the control of any single individual or entity. This can provide a level of independence and flexibility that is not possible with traditional organisations.
Transparency — As DAOs function through on-chain governance mechanisms, they utilize blockchain technology. This provides full transparency as all participants generally will have full access to an immutable record of all changes that occur to, for example, a Web3 DeFi protocol. This unchangeable record provides safety to all users and restricts participants from committing fraudulent behaviour.
Efficiency: By automating certain processes or tasks through the use of smart contracts, DAOs can often operate more efficiently than traditional organisations.
Innovation: The lack of red tape and bureaucracy in a DAO can allow for more creative and innovative approaches to problem-solving, potentially leading to new and unique solutions.
Build Community Trust — As token holders are the ones making the decisions, they are the once in power, and they are often the users of a platform. As such, their interests are often aligned, which can boost community trust.
Target Audience: A recent report on consumer perceptions toward brands builds a strong case for decentralised autonomous organisations (DAOs) as a marketing tool. The report, conducted by creative consultancy Long Dash, found that a majority of Gen Z and millennial consumers (63%) want more influence over how brands make their decisions. 60% of this cohort said they would be interested in using company-issued crypto tokens in order to vote on decisions—a key component of DAOs.
MakerDAO - a decentralised finance platform that offers users a range of services, including lending, borrowing, and trading. What makes MakerDAO successful is its use of Dai, a stablecoin backed by crypto-collateral, which provides users with a stable form of currency. Additionally, MakerDAO leverages decentralised governance models, allowing users to propose and vote on changes to the system.
Uniswap - a decentralised exchange that allows users to trade tokens and other digital assets. What makes Uniswap successful is its decentralised liquidity pool, which allows users to trade assets without the need for an intermediary.
Aragon - a decentralised organisation platform that allows users to create and manage their own DAOs. What makes Aragon successful is its easy-to-use interface and its built-in smart contracts, which enable users to quickly create and deploy their own organisation. Additionally, Aragon's governance model is designed to ensure that all participants are treated fairly, creating a secure and transparent environment for DAO operations.
BadgerDAO is dedicated to bringing Bitcoin to DeFi, Gitcoin has distributed over $72 million to Web3 projects, and API3 is building a multi-chain compatible network to incentivize API operators to serve their own oracles.
Worker Collectives are a new form of organisation that can fill the gap left by traditional unions. Raid Guild and dOrg are invoking the ancient tradition of guilds to protect their members and uphold high standards in their field. They are able to fund common goods and set global standards for work in their field through shared resources and selective recruitment.
H.E.R DAO - a woman-led decentralized autonomous organization that is focusing on increasing gender diversity in blockchain ecosystems.
DisCO - a ‘Distributed Cooperative Organization’ that is distinguishing itself from the dispassionate, transactional nature of many DAOs and using an Open Enterprise Governance Model to coordinate commons-oriented work, rooted in feminist economics.
While there is no team of people moderating content, you still can’t say anything you like. The other members of the DAO do not need to tolerate anyone’s hateful or oppressive views; they can put up a proposal to vote them out of the DAO.
Friends With Benefits - a community of “creators, rebels, artists, thinkers, and doers” who aim to shape the future of content creation in the Web3 space. organized a rave in Paris for the DAO’s members on the evening of Europe’s largest annual Ethereum conference. Besides parties and exclusive NFT art, FWB members get access to closed-off sections of the community, including the learning, lifestyle, culture, trading, and governance areas.
Bored Apes (BAYC) - made up of people who hold one of the 10,000 Bored Ape NFTs. Your Ape NFT acts as your yacht club membership card, giving you access to a shared digital canvas as well as the DAO's private discord channel, where you can socialise and network with other successful Ape holders. Hosts some incredible real-world events, one of which was an IRL yacht party, featuring a show headlined by comedians Chris Rock and Aziz Ansari, followed by a music performance from the Strokes!
Krause House - a social DAO centred around a single sport: basketball. Fundraising to collectively buy an NBA team.
Bright Moments DAO - focuses on IRL events; in particular, live NFT minting experiences. The DAO centres around a growing NFT collection called Crypto Citizens.
Cabin Dao - built two IRL community spaces designed for live professional networking retreats. The idea is to provide an opportunity for a group of friends or colleagues to collaborate on a project they’ve been dreaming about away from all the distractions of modern life.
Meta Cartel Ventures - aims to allow for broader investments in new dApps by lowering entry-barriers for fresh investors.
BitDAO - aims to build a decentralized token economy and support a broad range of crypto projects.
DAO.vc - focused on creating a curated marketplace of crypto startups for investors to fund.
Syndicate - allows users to create investment clubs as well as legal entities for their investment clubs.
Growth in DAOs continues despite the crypto turbulence
DAOs buying sports teams
Sports teams restructuring as DAOs
Make music with your favourite artist: Stems
DAOs exist in a regulatory grey area. The decentralised nature of them may require the development of a new legal framework to ensure that the rights and obligations of the organisation and its members are respected.
The UK's Law Commission has launched a call for evidence asking users and other experts for information about how DAOs can be characterised, and how the law might accommodate them now and in the future.
The structure of DAOs is potentially problematic. Those who wield their wealth and buy a lot of tokens get a greater say, which is not as democratic as some of the proponents of DAOs say.
A Beginner's Guide to DAOs - BeInCrypto (article)
How To Join A DAO - Bankless (article)
Beyond Bitcoin: DAOs - dOrg (video)
DAO Talk by Tally (podcast)
