What makes DAOs Democratic? And Why Should You Care?

The perceived threat of automation has seemingly given rise to the “us versus them” mindset. Several questions fill our minds regarding the future of work and our role in it. But a new start awaits.

P.s. nobody’s taking your role or outwitting you while more human-centric technologies are emerging. Yes, we’re talking about Decentralized Autonomous Organizations (DAOs).

Perhaps, there are answers. Even better, solutions!

In this blog, we’d highlight the power of DAO to enable complete control and collaboration in the business world.

Are DAOs a new mindset against central control? And what are they?

Open and fair internet space is becoming the Schelling Point for the optimist and the hopeful.

In essence, novel technologies like blockchain and Web3 are, at heart, an alternate reality to today’s crumbling institutions, failing infrastructures, privacy violations, and climate destructions. Everyone is looking forward to a world where everyone can equally survive and thrive without being the good cop or bad cop.

DAO and blockchain are undoubtedly the holy grail of digital freedom, democracy, and of course, decentralization.

DAO promises to share value with a bunch of people or a community.

A DAO:

• Empowers members to voice their opinion through governance.

• Reinforces flat hierarchy to create fluid work opportunities. 

• Groups resources together to achieve an important mission.

$FWB, for example, is the native token of Friends With Benefits, a popular social DAO that allows people to exchange as required.

Crowdfunding programs, social media, video games, media enterprises, Fintech platforms, and humanitarian ventures are normally the most popular DAO blockchain projects and use cases.

Expect the unexpected: “An internet district who shares one bank account”

DAOs are unique but come in many forms. For example, an online community with a shared bank account. Absurd but possible!

“Basically, a small group of people come together to form a chat group, and then they decide to pull capital together, [typically] using an Ethereum wallet,” says Cooper Turley, a crypto investor and founder of several popular DAOs, tells CNBC. There, they decide what and how to fund their DAO’s goal in tandem.

Above mentioned is just an example. A DAO can be a blockchain-based project or an investment opportunity. Each DAO is peculiar in its type, building, terms, and governance, depending majorly on the community and its goals.

DAOs are basically batches of people who gather around a goal, project, cause, organization, or anything of collective importance. DAO Crypto communities are the most common use cases where native token holders own, govern, communicate, and vote to make consensual decisions.

Irrespective of size, DAOs help socially conscious groups to achieve core goals. It could be a Telegram group with 10+ members, and 1 ETH token is a DAO.  Or a DeFi protocol where 10,000+ native token holders govern over $ 1 billion worth of assets is also a DAO.

DAOs in blockchain prop up a flat hierarchy. No CEOs, directors, or managers dictate and impose decisions. Every community member is a stakeholder, but nobody is the sole decision-maker. Such fluid and short-term leadership gives every member a chance to show up and rise.

The below table summarizes the differences between traditional Org and DAOrg:

A lit bit of technical explanation

DAO platform development exploits verified smart contract frameworks and digital tokens on public blockchains, such as Ethereum, allowing DAO members to directly partake in the on-chain governance and decision-making processes.

There are two tools for DAO decision-making. Firstly, the DAO rules are expressed in digital “IF/THEN” statement forms, later encrypted into a blockchain. Secondly, voting shares are divided among stakeholders as “digital governance tokens.” These tokens are  also taped on a blockchain.

DAOing thus replaces the everyday hocus-pocus of traditional organizations as rules are coded, and the hierarchy is flat where everyone has a voice.

As DAOs continue to gain momentum, few groups have emerged to grow and govern independent organizations. For example, Snapshot facilitates governance, BitDAO helps crowdfunding, American CryptoFed DAO enables fee-free trading, and LexDAO automates legal services.

The DAO landscape is beyond imagination and continues to decentralize the internet.

DAOs play a great role in this realm of decentralization and democracy.

The creators of blockchain technology focused on establishing a transparent and decentralized Internet order for the world.

And there we are: humans are coming together, making collective decisions, and shaping a very human-driven digital world.

Far from profit-oriented schemes, any good  DAOs blockchain development company underpins economic and expression freedom as its core goal to achieve fair property rights, no central control, data privacy, identity management, and technological equality. The community-centric DAO approach promises a socially-aware digital society; designed to offer equal opportunity to prosper instead of serving the interests of a handful of powerful shareholders.

These organizations prevent manipulation and take real-time actions in contrast to the relatively slower traditional corporations.

So, if want to run a global financial forum through a group, why not lead an organization? Both interesting and innovative; the notion of a democratic organization can help us reap better and empower impactful results.

Will DAOs change and evolve your business and its contributors?

Yes, in multiple ways.

Technically, all kinds of businesses can become a DAO be it a consulting, engineering, healthcare, logistics company,  and so on. It is possible to have prolific collaborations without any central operator. This can set benchmarks for labor, pricing, and quality choices to navigate profit and equal income streams.

Following are some prominent reasons why DAO software development will shape the future of companies as automated organizations:

More work automation and employee engagement

DAOs may transform regular algorithmic tasks with automation allowing contributors to focus more on high-value activities and their selves. Such an innovative and independent work state can save from wasting time on repetitive and trivial tasks.

People will have open choices to select the employment style and coworkers that best matches their motivation, vision, and values. Do you know? Disengagement at the workplace costs the United States a whopping $500 billion every year. In the latest terms, employee disengagement is usually called quiet quitting caused by stressful workloads, work-life imbalances, office politics,  nonexistent autonomy, and lack of appreciation.

DAO fights the ill-fated traditional organizational employee-employ conflicts and fixes them by blessing every individual voice and expression.

No more talent hunting and boring interviews

Future digital organizations won’t require multi-step recruitment processes. A developer can simply jump in and start doing their tasks with responsibility. Another great aspect of permissionless DAOs is anyone delivering consistent value is welcomed in the core contributor team.

We all love the no-file system, a world free from the abyss of CVs and cover letters: DAOs completely change the talent hunting and recruiting process with its bottom-up and opt-in membership approach.

Technically, Core Contributors and Edge Contributors — are two types of people that form a DAO. The former is a group of employees while the latter can only join any DAO’s Discord network, write code, and share updates on Twitter, and other channels. Why? because the majority DAOs are permissionless which allows people to commit a code and access smart contracts and contributors transparently.

Permissionless DAOs are a great alternative to obsolete talent hunting for these reasons:

1. Classical talent selection marginalizes minorities due to deep-seated prejudices. DAOs urge us to focus more on the work done and not on the person. Aptitude first, person later.

2. DAOs reinforce work flexibility introduced by the gig economy.

3. It somewhat reduces wangling unemployment and enforces employee retention.

May sound illegal but DAOs allow you to work for multiple corporations

Permissionless DAO blockchains mean that contributors can work for not one, not two but as many organizations. Workers can form exclusive relationships. This is relevant for every worker including developers, consultants, community managers, healthcare experts, etc.

For instance, a team comes together to launch a project happily. Once the project is done, the team members simply part ways to work on other different projects. No commitments, no contracts, just your freedom to work with whomever you want.

May sound harsh but you will have the option to discard your employer tomorrow just like they can today — with DAOs.

DAOs are mission-driven, but working for only one organization may not secure enough living wages. Therefore, it only depends on humans what they prefer, working with multiple organizations or their beloved companies.

Get fairly rewarded for your hard work!

Isn’t it a dream come true when no one asks about your work progress? But some may worry about how they’d get paid in such an independent workspace. Verily, contributors will contribute for a  reward in return.

The DAO payment process is pretty much laid-back: The organization trades services and products and puts aside an amount from the generated revenue for rewards and salaries. Since contributors are not bound by a contract, there are no decided ways to decide and distribute fair pay to them.

Multiple companies build “circles” of contributors or teams for DAO blockchains. Certain points are assigned to each circle member which they can assign to other members over a particular time period. Greater financial reward thus largely depends upon the perceived amount of valuable work done and points received in that particular time chunk.

Maybe daunting to many, the DAO pay distribution is an interesting process for several reasons:

• Workers get incentivized for working dedicatedly towards the mission of DAO creators.

• Contributors may contribute as shareholders of DAOs even after they’ve left it. This is because rewards are often considered governance tokens.

• Starters can evolve a new form of value within a digital community by adopting DAOs' fair reward and salary distribution system.

You become your own boss with DAO

DAOs are considered exceptionally transparent, but also, erratically anonymous. Payments are made through crypto-wallets, and Discords are full of Avatars, thus one no longer brings their full self to work. Praise the lord!

However, with remote work in place after COVID-19, the physical community and identity are slowly disappearing.

In essence, DAOs allow workers to work at their own pace on what they consider important  — not having colleagues is a thing, but having no boss is a perk for some. Many people are not familiar with such working styles and may think of it as an alien concept. But on the brighter side, you learn self-management and discipline to achieve more goals.

This may sound uncomforting to many, but DAO blockchain projects and initiatives will eventually lead to detrimental individual growth.

It’s still not late to launch your own future-ready DAO blockchain!

DAOs have immense potential to transform a corporate organization that hasn’t changed in the last few decades. A DAO makes collective decisions from the bottom up where the investors and owners exist independently and democratically.

A reliable DAO platform development partner should handle the following challenges for you:

• Expertise in dealing with novel technologies and their operational bottleneck.

• Should facilitate community buy-in for smoother, collaborative, and timely decision-making.

• Ability to manage operational risks when multiple parties cast their votes to elect a proposal

• Vigilant DAO developers that perform smart contract development, eliminate security risks, and form future risk mitigation plans.

InvoBlox is a well-versed DAO blockchain development company that impeccably tackles the above-mentioned challenges. You can trust our skilled DAO developers for trustless and permissionless DAO development services.

We help you shape the future better and DAOs are the key to it!