DAO or decentralized autonomous organizations have been around for some time, not just in the field of cryptocurrencies, but they have also expanded further than that. Through that expansion, they managed to impact the way many domains of organizations function and how these organizations govern themselves at the end of the day. For DAO, it makes little difference if the same system is employed inside of an esports team or a huge multinational company. In both cases, the organization can utilize the numerous advantages that these systems based on decentralized blockchain offer. As these spread, they will also provide a gateway to a new way of doing business, but also more digital competition inside of the organization field.
With that, they will stand the chance of not just revolutionizing the processes being everyday organizational tasks, but also transforming many traditional companies and institutions by the sheer power of presence. As this process takes place, the element of extreme transparency will likely be the biggest novel thing that people and organizations will begin to appreciate very soon. In the near future, any stakeholder in a DAO can include their actions in the governance proposals and have a vote on them. These seem like shareholder resolutions that already work in large enterprises and companies, but can also take other forms as well. All of them are a quiet but very substantial revolution in the process of the organizational field and they are only ramping up.
The process of terminating an entity like a team inside of the DAO methodology offers a good insight into the processes that make this system so appealing. For example, a company might employ a range of teams. In that organization, voters in a DAO system might decide that one of the teams has not produced any relevant results in a particular time period. They might also decide that they do not want to allocate any further money into the same venture and want to end the same team.
The team itself has a range of metrics that showcase their success but none are fully convincing that their narrative is relevant. So, with claims and counterclaims on the table, the voters take to the DAO to get their say in the matter. In theory, the organization either elects to dismantle the team or to keep it going for a subsequent time period. But, while the system seems completely transparent and capable of dealing with a range of potential problems in organization chokepoints, it too has a range of issues that still crop up in reality.
Necessities of Governance
The problem of effective DAO governance remains similar to that of any classical organization and any other body that has to make decisions about itself. The first necessity is clear metrics and the ability for anyone in the organization to understand these. If that can happen, anyone can decide whether or not a team, individual, or partner company managed to reach the desired results. The second requirement is directly tied to the first one and it involves access to clear documentation. That is not just the issue of transparency but also clarity about the heading of a particular organization.
However, clarity itself also helps with the motivation of individual employees and organization members to get involved in the same cycle of decision-making. Otherwise, the human psyche is usually inclined to take shortcuts by saying that their votes do not really matter. The same applies even in crypto DAO systems, like shared bitcoin holdings, where the impact of a decision is directly represented in a person’s cryptocurrency wealth. It is an absolute certainty that these incentives will be needed in decentralized autonomous organizations of any type, no matter how enthusiastic their members might be about DAO at the start of its implementation. These necessities of governance help make any organization and its decision-making better. In the case of DAO, they are essential for the present and future decentralized organizations.
Competition on a Next Level
The extreme transparency of DAO will not only change the way organizations work but also how competition overall functions. That is no surprise for anyone who is following blockchain technology, which has already transformed so many facets of the global industry and things like supply chains. In the case of numerous DAO systems, the same protocol is the actual product they are selling. Software by nature is copyright material in most of the world, the logic and principles of DAO protocols are not. So, everything that DAOs deliver to us is public and completely open to the scrutiny of competition and anyone who is interested in the same systems. Because of that, good ideas are incredibly able to spread fast and wide and innovators are open to all manner of changes and upgrades.
Like it or not, that would result in a ruthless level of competition in the sphere of digital markets. These decentralized systems and networks would become both the product and the platforms for the same markets and achieve better results with less invested funds. That is why recently even small tweaks and improvements completely revolutionized some companies and turned their value from minuscule to huge. Quickly after, the markets noticed as well and market shares changed nearly instantly. Because of that, the companies working in DAO will not be able to count on past glory, but constantly improve and innovate as much as they can.
For many, the same systems of DAO seem very familiar and similar to the models that communist states like Yugoslavia tried to implement in their economic reforms. The processes of self-governance thus might not have a good association for a lot involved in the capitalist system, which is presently the world’s system. However, the potential for governance that lies in the DAO principle is hugely important.
It will allow direct influence to be spread through organizations, giving everyone a voice in certain matters. That will give huge benefits to many industries over the years, but also generate some problems and difficulties. But, with cryptocurrencies in the same DAO mix, the same unique offer is already irresistible for so many companies across the world.