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  • Writer's pictureJoy Yuan

Decentralized Autonomous Organization( DAO): The Next Blockbusters in Crypto Space and Beyond?

Updated: Sep 16, 2022

If till now, you are asking the questions "What is a DAO?" or "Why do I even need to bother what DAO means?" You need not bother; these are technically very fair questions, which this blog will help you demystify.

In traditional companies today, there are always laid out rules, dynamics, and most importantly, contracted members who are legally bound to maintain their allotted roles.

These companies operate on a centralized management system where company owners often want all control and hegemony over their organization's ecosystem. That form of authority in some situations can extend to as much as even the verticals built on top of those ecosystems.

Contrary to traditional establishments and their administrative dynamics, the Blockchain and its evolving applications like DAO – also known as Decentralized Autonomous Organization- have kept justifying the idea of a democratized approach to organizational management.

To demonstrate how the DAO concept is considered one of the most innovative Blockchain-based concepts, I would provide a detailed expository on this revolutionary iteration and how it can impact our lives.

What is a DAO?

P.S: Most people complain about the ambiguity or confusion surrounding the DAOs as either an organization or DAO as a protocol. The truth is both of these concepts are radically interwoven. Let me explain how.

DAO as an Organization

A Decentralized Autonomous Organization (DAO) is a democratized Blockchain-based entity, collectively owned and managed by 'members,' who can make decisions without human interference and monopoly.

In this type of organization, decision-making is governed by proposals and a public polling system that ensures every member has a say in policy-making. To be considered a bonafide or enfranchised member, one should have the DAO token of the DAO project they belong to or wish to join. Holding this asset or a DAO ICO (DAO's Initial Coin Offering) generally gives users or members a fair opportunity and power proportional to their holdings.

Also, DAO members occasionally enjoy a considerable latitude of earning token incentives for assertively contributing to their organization's welfare. All of these occur without the need for a CEO to orchestrate activities based on their whims or even try to manipulate the entity's data.

Now, that's all about DAO as an organization; let us look at DAO as a protocol.

DAO as a Protocol

When like-minded strangers on the Internet decide to collaborate in achieving an overarching goal, they can decide to adopt a DAO software or protocol to regulate their activities.

This built-in programmatic treasury would contain every member's data with encoded predetermined rules and regulations for the group. Since this open-source blockchain protocol houses all the rules, there's never a need to interpret the programs as they always self-execute when predefined conditions are met.

Haven gained insight into DAO's definition; I would further expound on this terminology by eliciting how a DAO works, plus Why and where we need DAO.

How does DAO work?

To create a DAO, one has to pass through three stages:

  • Smart contract creation: The mainstay of a DAO or DAO protocol is its