A new way of organizing, built on the blockchain.
Hi everyone! Hope your weeks are off to a great start :)
This week, I want to provide a deeper understanding of a type of organization that’s emerging and has the potential to change the way people organize around supporting causes they care about: the DAO.
What is a DAO?
DAO stands for Decentralized Autonomous Organization.
Decentralized: It’s an entity with no central leadership. Decisions get made from the bottom-up, governed by a community organized around a specific set of rules enforced on a blockchain.
Autonomous: DAOs operate using smart contracts, which are basically sets of code that automatically execute whenever a set of criteria are met. These smart contracts establish the DAO’s rules. Those with a stake in a DAO then get voting rights and may influence how the organization operates by deciding on or creating new governance proposals.
Organization: DAOs are internet-native organizations collectively owned and managed by their members. They have built-in treasuries that are only accessible with the approval of their members.
Now that we have the definition, let’s break it DAOn even further… lol… pun very much intended.
Legacy Corporations vs. DAOs
I started my professional career working at a technology company with over 16,000 people across the globe. If I had to guess, I’d say our executive leadership team was probably about 8-10 people and the direction of the company was mainly determined by their vision and the input of board members. Now, if you asked me what decisions were made, when they were made, why they were made, or anything of the like I probably couldn’t tell you. I barely knew everyone on the leadership team making the decisions, even though I gave almost 3 years of my life to working and contributing to the company.
In the world of DAOs, this model becomes outdated. Instead of the power in an organization being held by just the executive team and board members, all employees (no matter the level) would have the opportunity to vote on the direction of the company and easily access information on each decision that is made.
Real World Example of a DAO in Action
I love this example of a country using a DAO to regulate their voting process and reduce opportunity for fraud. It shows how powerful blockchain technology will be once we hit mass adoption across the globe. Check out this graphic below:
“Can I join a DAO?”
Yep! Aragon has a thorough blog post describing this in detail. Below are some of the highlights from the post:
“Joining a DAO is embarrassingly easy compared to legacy organizations. Even without a token, you can still be an active member of a DAO community. This is because DAOs - and crypto in general - embrace the notion of 'permissionlessness'. This doesn't mean that all of your contributions and ideas for proposals are guaranteed to be accepted, but there is rarely a joining process and certainly not any required characteristics or an interview / secret handshake / 12 terms of boarding school to be endured first. Regarding tokens, a DAO's token is your ticket, membership card and vote ballot all rolled into one.”
Here are the steps they recommend you take to join one:
Find your tribe: “Before getting busy with proposals and community calls, you'll want to decide where in the DAO universe you want to spend your time. For this, directories such as DAOlist and DeepDAO are great places to begin exploring.”
Read the charter: “Once you have found a DAO to explore, it is a good idea to read any introductory documents first. DAOs are generally Purpose-led Organizations and will usually have a written set of objectives and principles that guide the community's activities.”
Join the community: “As soon as you are familiar with the Charter, dive straight into the community chat and introduce yourself. Most DAOs use Discord but Telegram is common too.”
Get involved: “It is true that if you are a developer, you will find a niche in almost any DAO. However, DAO software is nothing without the four 'c's of Web3: Community, Culture, Collaboration and Coordination. These require an army of skilled operators to manage: designers, project managers, strategists, content producers, presenters, community managers, researchers... the list goes on.”
This week’s recommended action: Explore these DAOs!
PleasrDAO collects various NFTs and invests in other assets.
HerStory DAO collects and funds projects by Black women and non-binary artists.
Komorebi Collective DAO funds women and non-binary crypto founders.
Friends with Benefits DAO is an exclusive social club which you pay to enter.
MetaCartel Venture DAO is a for-profit business that invests in early stage decentralized applications.
WoW Pixies is a a venture DAO investing in women-led projects to uplift the entire NFT ecosystem.