What is a DAO/decentralized governance organization? What is the difference between DAO and traditional organizations?
In recent years, the digital currency and blockchain ecosystem has ushered in a big explosion. DeFi, GameFi and NFT have received a lot of attention. Although all of the above have led the development of the digital currency ecosystem in the past few years, the DAO also deserves your attention. Whether it's blockchain games or newly issued digital currencies, most of them operate in the form of DAO, and will become the mainstream of the next wave of currency market! So, what is the DAO/decentralized governance organization? What is the difference between it and traditional organizations? Next, let's take a look.
What is a DAO/decentralized governance organization?
The full name of DAO is Decentralized Autonomous Organization, which is a decentralized governance organization.
As the name implies, contrary to the traditional organization-centered structure, DAO uses smart contracts to regulate projects and manage the ecosystem in a decentralized way. Everyone in the blockchain ecosystem can participate in decision-making and operate in a "direct democratic" way. This kind of organization subverts the traditional top-down hierarchical structure of the organization, which is why the DAO is called the future organization.
The traditional organizational structure is progressive from top to bottom, which is decided by a few senior managers and handed over to the lower level for implementation. Taking the company as an example, the chief executive has the highest power, followed by department heads and ordinary employees. In this type of model, decisions are usually made by a few people. Even if the company has internal standards as the basis, it is not necessarily that leaders always make decisions according to the regulations.
The blockchain application and smart contract based on which DAO builds can ensure that everyone's rights are restricted. Even the implementer and founder can hardly change the smart contract at will, effectively preventing anyone from dealing with things unfairly. As long as the blockchain system in the DAO is reasonably configured and operates smoothly, a large number of macro decisions can be made through the referendum system without any hierarchical structure.
The way of DAO is applicable to different categories of organizational structures. Whether GameFi, DeFi or NFT can also operate in the way of DAO. At present, there are many different types of projects in the market, all of which are operated in the same way as the DAO, which also breaks the original idea of the society on business operation and property ownership, and can more effectively play the power of the masses.
What is the difference between DAO and traditional organizations?
For traditional Internet companies, as a centralized organization, CEO is responsible for business strategy, CTO is responsible for technical decisions, and COO is responsible for operational decisions. The investor has the equity of the enterprise and has control over the company's assets.
And DAO is more like a well-organized and decentralized venture capital fund. The governance of the DAO generally depends more on the consensus of the team. The organization does not necessarily rely on the shareholders' meeting or the CEO. There is no CEO to send down the executive instructions. The DAO only uses the smart contract to obtain the completed work.
DAO is mainly managed by distributed consensus, and uses smart contracts to collect members' votes or preferences. If participants have the governance token of DAO, they can propose new rules, vote on the new rules, and automatically execute according to the smart contract method to adjust the organization's property.
For example, in terms of looking for people, DAO is to select the right people from the community (people who are interested in a thing and believe in a vision), rather than looking for people with relevant skills from the talent market.
"Let great people participate in it" is the core strategy of all outstanding organizations, especially those looking forward to highly decentralized organizations. Organizations are made up of people. Of course, if you want to do great things, the first criterion is to work with excellent people.
Working with good people makes your life easier. Successful people are smarter and more powerful than you in what they spend their time on. They can see the corners you don't know. They perform well without guidance and ambiguity. They have strong resonance and attract each other through these resonance.
From this point of view, even though the DAO has some unsolved problems in the organization's implementation efficiency, it has made great breakthroughs in the organization's talent recruitment.
Implement it to the recruitment website organization for analysis. The traditional organization of talent recruitment platform company has a high total cost, and it needs to be completed and extracted by intermediaries such as headhunters. However, in the Braintrust platform based on DAO, talents not only do not need to pay intermediary expenses, but also may get additional benefits in addition to labor remuneration: when they successfully apply for the position and get five-star praise from the employer after work, they can get the token reward of the platform. In addition to providing evidence for their participation in community governance, the appreciation of the currency has also added potential economic benefits to them. The short-term and long-term benefits of talents have increased. Such multiple incentive effects promote the rapid growth of freelancers and corporate customers on the platform, improve the network effect of Braintrust as a platform, and reduce the risk of talent recruitment platform.
In addition, in Braintrust, talents with money can also participate in the governance of the entire network platform and put forward more favorable requirements for their own and platform development, which will make the development of the entire platform better.
Having said that, I believe you have a certain understanding of what DAO is and what is the difference between it and traditional organizations. In general, the emergence of DAO provides a new and efficient management system for the organization, which may change the operation mode of corporate governance, and also lead to more effective organizations.