The fun part about disruptive innovations is their lag times. And specifically, the lag times between stimulus and response. Remember a time when you didn't see what hit you because it was stealthy or because you undermined its capacity? And perhaps you were forced in 0.3 seconds flat to break from convention and improve on your existing protocols to remain relevant? Today the Decentralized Autonomous Organization (DAO) system is fast becoming lionized in the business space; it is sought after by organizations like a trendy upscale nightclub. If you are one of those who need all the gist of it in order not to be left out, then this article is for you.
What is a DAO?
Imagine a method of organizing people globally without a prior relationship, establishing rules, and making decisions autonomously, all encoded on the blockchain. At first glance, this might seem impossible, but DAOs are making this real. They allow people from all walks of life to pool money together for a specific project that would have been difficult for an individual to accomplish independently. Recently, we have seen DAOs make significant purchases and amass a huge portfolio of collectibles and digital assets showing the endless opportunities available.
DAOs stand for a new dawn of possibilities and opportunities for extensive and concerted community engagements in business organizations. Built on transparency, publicity, and immutability, a DAO is an organization bound by charters, bylaws, or rules and encoded as programs on a blockchain. Here, participants control the organization, with higher authorities or central governments practically nonexistent. Since smart contracts are employed in coming up with the rules and executing the unanimous decisions of the members, it is safe to say that it forms the basis of a DAO. In addition, amendments to the rules and proposals are subject to the approval of a majority of the validator nodes or governance tokens.