Evolving the DAO: How decentralized companies can dominate Web3

Tuesday 23 February 2021, 1:09 AM AEST - 6 days ago

Decentralized autonomous organizations — known as a DAO for short — have become a mainstay of the crypto world.

The rationale behind DAO is to enable companies and organizations to fully function without the need for a hierarchical management structure. As this Cointelegraph guide explained, its like a vending machine delivering a snack in exchange for a bundle of coins — and then automatically using those funds to reorder stock. Theres no need for human involvement in keeping the machine running, as all of the processes it needs to function are pre-written into code.

Beyond this real-world example, the possibilities for DAO are endless. Theres just one issue: Some believe that the potential and promise that this technology offers arent being fully exploited. Many DApps only use DAO for governance purposes — enabling community members to submit proposals and cast votes.

A growing band of crypto enthusiasts believe that DAO will play a starring role as the world makes the shift to Web3 — paving the way for fully decentralized companies that can secure the same levels of significance and influence that centralized tech giants currently enjoy in the Web2 world. The rise of the value internet will require a new style of organization where decentralized apps are managed by community members.

But if this is going to be achieved, the DAO needs to evolve. Technical limitations need to be addressed and removed to achieve mass adoption.

Beyond voting

MetisDAO believes that decentralized autonomous organizations should provide far more than a voting mechanism for members of the community. Instead, it argues that the DAO should help manage their collaborations — enabling everyone to contribute to a projects growth and receive incentives based on their hard work.

But at the moment, the structure of the DAO means that its ill-suited to large-scale applications. Theres a heavy reliance on smart contracts, and the programming language isnt always ideal for executing complex business logic. The focus on voting is also impractical for a big, decentralized company, and can distract from the bigger picture. Major businesses dont have board meetings ever ...

Read full story on Cointelegraph

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