Decentralized Autonomous Organizations (DAOs) started as a simple concept, envisioned as an idea generated by idea and driven by developers, that automate business functions and processes using smart contracts and all the core principles of the blockchain. The main idea was to simplify the complex business process in which various organizations get stuck and facilitate the transfer of assets in a future-oriented digital interaction that does not require any intermediaries and promises faster, cheaper and more transparent transaction processing.
Replacing many brokers, DAOs themselves have acted as digital brokers providing openness and scale, giving them an organized niche without the traditional organizational structures of departments, groups, leadership, charters, and other forms of teamwork. While the traditional centralized organizational structure is being questioned, the major remaining organizational elements are fueling a new economic revolution that is spawning a new creative economy and bringing together artists, lawyers, developers, and innovators from around the world to generate and monetize ideas. . On a global scale in unlicensed economic crypto systems built on Blockchain and Web3 technologies – and in fact define the work of the future.
Reduced reliance on trusted parties, asset tokens, and new reserves of value enabled by blockchain technology can create new types of organizational structures and reduce the influence of intermediaries. Ronald Coase’s famous essay on why corporation exists, the nature of corporation, explores why corporations exist and the elements that make up them.
With respect to transaction costs, the company creates an economic structure in which transaction costs within it are reduced through greater control over standard contracts with its employees and ownership of resources. As the cost of absorbing resources increases, so does contractual arrangements with other companies in specialized fields. Transaction costs associated with concluding contracts can be significantly reduced through decentralized verification and activation of smart contracts using the blockchain.
While this was the original focus of DAOs, where speed, efficiency, and cost were the primary goals, DAOs are now an important part of mind-sharing management and the main driving force behind extracting value from the base layer or first-tier blockchain platforms. Top-notch blockchain platforms are new Web3 technologies that aim to provide greater control to participants through core decentralization of computing, storage, and interconnection. There will be many DAOs that represent a collaboration between the pool of global talent, digital natives, and creative community that share a common belief system, reviving the concept of ‘Organisation’.
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DAO: Pillars of the Creative Economy
In a broad sense, a DAO is an organization that records membership, rules, and responsibilities in an immutable ledger powered by blockchain technology. Its charter and development are public and not subject to change. It usually requires access to resources and membership in the community in the form of tokens in order to participate or vote as a member. Tokens are denominated in monetary assets (exchangeable or non-exchangeable tokens), whether it is cryptocurrency or fiat. Obtaining tokens in most cases requires time and talent, or investing in fiat currencies or cryptocurrencies.
DAOs provide a unique structure that naturally supports the creative economy, in which the economic model supports the structure in which you employ your talent and time, generate flexibility and revenue, and use them to facilitate shared ownership in a system supported and controlled by community. . Blockchain and DAO, in conjunction, embody a natural governance structure for unlimited online collaboration on digital native crypto projects that can be used by traditional organizations that adhere to principles similar to how physical companies find their way into the digital equations in the Web 2.0 era.
While issues of regulatory clarity and a framework to protect investors remain, these digital entities embody the digital reality as a country – as the country seeks to attract talent, capital and innovation. While the rules of governance and participation may not be perfect, they are an ongoing experiment with innovation to change the way we live and increase the participation of all willing communities.