Blockchain, bitcoin, and the metaverse are all popping up in headlines. But not many people have heard about DAOs, which are also poised to revolutionize information-sharing. DAO stands for decentralized autonomous organization. DAOs are member-based groups governed by rules and parameters that are maintained on the blockchain.
Being part of a DAO is kind of like being part of a team that’s owned by the fans. Instead of having one central body that governs or “owns” the organization, a DAO is owned and governed by the stakeholders that it is composed of.
The power of smart contracts using blockchain
Those stakeholders all enter into a smart contract, using the blockchain, which connects each individual to a DAO. In a DAO, all of those stakeholders are bound by that contract to act towards reaching whatever the objective of the DAO is.
For example, you might have heard about a recently-famous DAO that had about 17,000 stakeholders. They were all contributing funds to try and buy one of the rare, early editions of the United States Constitution. That DAO raised over $40 million in just a few days, all through Twitter!
They ultimately lost their bid to buy the edition of the Constitution. But this DAO demonstrated the power of decentralized decision-making and governance on the blockchain. Because this group was a DAO, all the contributors could see how much money was being raised. The rules of DAO ensured that contributors’ money was returned when they lost the bid. That’s the power of a smart contract.
An added level of security and transparency
This might all sound a little wacky if you’re not in the blockchain or crypto world. DAOs are popping up in more and more places. They’re fully-online, decentralized groups. Because DOAs use the blockchain to write and maintain their structure, there’s an added level of security and transparency.
The possibilities of DAOs might blow your mind! That combination of member-control and blockchain security will be used to govern charities, for-profit companies, and crowdfunding and start-up investments.
Imagine giving to a charity or investing in a start-up and knowing exactly what your contribution is being used for, how much money the entity has to spend, and how much it needs to reach its goals—all while knowing that if the conditions of the smart contract that governs your donation aren’t met, your contributions will be returned. This process is literally designed as a self-executed contract, pending certain conditions are met.
So many of us are used to not having that kind of transparency and control that DAOs might sound impossible. But with the blockchain, DAOs are not only possible, but accessible and implementable, even today!
You can find out more about DAOs on episode 8 of the Blockchain Life podcast.
BTW. Are you an author, influencer, or entrepreneur? If so, join us at the Igniting Souls Conference and start leveraging Web3 for your book, brand, and/or business. (Limited tickets available.)