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In 1707, the British Parliament was created to facilitate informed, democratic, and conscious governance. While this structure suited the socio-economic state of the nation at the time, the world in 2024 is vastly different. Web 3 and DAOs (Decentralized Autonomous Organizations) have emerged as enablers for people to combat sluggish structures.
So, what exactly is a DAO?
In simple terms, a DAO is a group of people, whose practices are transparent, verifiable, and endorsed by the community on a blockchain. DAOs can serve various purposes, such as making collective decisions for NFT communities, or even circumventing regulations. The specific attributes and direction of a DAO largely depend on the initiatives of its founding members.
How do DAOs work?
Setting up a DAO is relatively simple, thanks to tools like Syndicate, Squads, and Snapshot. Users can connect their wallets, name their entity, register members, and set up smart contracts in just a few steps. One important aspect of a DAO is its organizational structure, which should be designed to increase effectiveness and mitigate common governance issues like low participation, voter apathy, and plutocracies.
Why do we need DAOs?
The decentralized nature of blockchain technology fosters collaborative environments that provide opportunities for builders and creators. Curious users can add value while building their reputation, and participation in these networks often comes with tokens or a means of ownership. This gives contributors a stake in the network’s evolution and growth. Communities vote on public goods funding and can even vote out the directors anonymously.
Ultimately, DAO’s have the power to transform the ways people make decisions by providing greater transparency, autonomy, and decentralisation.