Decentralized Autonomous Organizations (DAOs) offer a new way of organizing business in a non-hierarchical structure that encourages the participation of all members of society. Without centralized management and collaborative decision-making, DAOs can revolutionize the way we think about business, but implementation is not without challenges.
The term DAO is sometimes used to refer to a system of software operations that is coordinated and runs completely automatically, indirectly depending on the fact that people only outsource certain parts of the work as needed. A classic example would be a blockchain-based network that sells file storage services or machine learning models, advertises its products, rents equipment, accepts payments, etc. through automated scripts or smart contracts. An automated network can take care of all aspects of an organization’s operations – probably including the code that allows it to call and pay a human accountant or lawyer when needed.
Another interpretation of the term DAO is a way of organizing network software operations that people can manage individually, but the entire network is controlled and managed in a decentralized way without the typical formal institutional structures or management.
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In this sense, a DAO is a kind of collective, seen as an alternative to traditional corporate or non-profit structures, where the members can be either people or AI agents, and are often only known to each other through somewhat opaque identifiers, such as a cryptocurrency wallet. addresses.
The DAO model is particularly applicable in a crypto-economy based on decentralization and societal participation. Unlike the traditional world where small shareholders have no say in the governance of a public company, anyone can submit proposals to DAO and the tokenholder community will vote for them.
These decentralized open source communities are often highly engaged and actively involved, discussing the company’s vision, roadmap and finances in freely available online communities. This level of participation ensures continuous control, eliminates individual flaws in corporate governance, and facilitates impartial decision-making.
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However, the DAO mechanism is not exclusive to the world of cryptocurrencies and can be used in all areas of life where it is beneficial for many people or multiple software processes with different owners to unite to perform common tasks. As the usability of blockchain technologies increases, building a DAO should not be more difficult than building a Google Group.
However, DAOs require a high level of education and participation, so there are currently no examples of fully decentralized and successful organizations. However, there are organizations that embrace this model and pave the way for decentralization. Metacartel is a great example of a semi-centralized developer community; Aragorn has successfully created a number of DAOs and Compound is a good example of a DAO that can do well for years.
A somewhat exciting example is the DAO Constitution, a Single Purpose DAO (SPD) whose sole purpose is to obtain the first copy of the United States Constitution. Although the experiment had some design problems and failed (to some extent) in the assignment, it had the advantage of getting media attention from DAO.
The future looks bright for DAO projects. As teleworking becomes more common, DAOs will become a popular business model for the temporary job economy, which means that a community of independently organized freelancers will be able to join DAO and contribute in a decentralized way without relying on central management. structure.
A particularly interesting development of this business model will be AI DAOs, where a community of human participants vote for the AI agents they represent in DAO’s decision-making process, eliminating human bias. In this way, AI agents collaborate in a decentralized way, looking at and evaluating each other.
It is likely that many DAOs in the blockchain world will begin life as a network of software processes that are largely human-controlled, but will gradually increase automation as artificial intelligence, blockchain, and other related technologies advance.
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In addition, the DAO architecture will be the most useful organizational model for the first general purpose artificial intelligence (AGI) as they emerge.