DAOs are an effective and safe way to work with like-minded folks around the globe.
Think of them like an internet-native business that’s collectively owned and managed by its members. They have built-in treasuries that no one has the authority to access without the approval of the group. Decisions are governed by proposals and voting to ensure everyone in the organization has a voice.
There’s no CEO who can authorize spending based on their own whims and no chance of a dodgy CFO manipulating the books. Everything is out in the open and the rules around spending are baked into the DAO via its code.
|DAO||A traditional organisation|
|Usually flat, and fully democratized.||Usually hierarchical.|
|Voting required by members for any changes to be implemented.||Depending on structure, changes can be demanded from a sole party, or voting may be offered.|
|Votes tallied, and outcome implemented automatically without trusted intermediary.||If voting allowed, votes are tallied internally, and outcome of voting must be handled manually.|
|Services offered are handled automatically in a decentralized manner (for example distribution of philanthropic funds).||Requires human handling, or centrally controlled automation, prone to manipulation.|
|All activity is transparent and fully public.||Activity is typically private, and limited to the public.|
To help this make more sense, here are a few examples of how you could use a DAO:
- A charity – you can accept membership and donations from anyone in the world and the group can decide how they want to spend donations.
- A freelancer network – you could create a network of contractors who pool their funds for office spaces and software subscriptions.
- Ventures and grants – you could create a venture fund that pools investment capital and votes on ventures to back. Repaid money could later be redistributed amongst DAO members.
Source: Learn Something New Newsletter
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