Development of a decentralized autonomous organization

Recently, with the rapid development of blockchain technology, a Decentralized Autonomous Organization (DAO) has been born, and as a new organizational structure and regulation, DAO has changed previous regimes, future business models, and community improvements. and changes in organizational relationships will have a significant impact.

Source of DAO

The concept of Distributed Autonomous Organization (DAO) was first proposed by American author Ori Brafman in his book "Starfish and Spiders". In his book, he compares average organizations to spiders and decentralized organizations to starfish.

Description: Spiders are cell tissues and cannot survive if their heads are cut off (all tissues). Starfish are made from the bones of each other's brain with no space, and any tent torn by starfish can turn into a starfish. Starfish and spiders therefore represent decentralized organizations. and centralized in the real world. When a star-like organization encounters problems and conflicts, it becomes a smaller organization, a functional organization, which divides and looks like a spider. The side does not work even if his head is cut off. On the other hand, the operations of decentralized star-type agencies could be considerably stronger.

In April 2016, the first DAO called DAO was born. It started after a crowdfunding campaign selling tokens and has grown into one of the biggest campaigns in history.

The goal of DAO is to provide new business models for corporate and nonprofit management. It is instantiated on the Ethereum blockchain and does not have a native administration structure or board. The DAO code is open source.

Unfortunately, in June 2016, the user was using an invalid DAO code that could allow them to transfer a third of the DAO funds to an account. Since the program does not allow hackers to withdraw Ether funds immediately, Ethereum users will have an opportunity to discuss how to resolve this issue. Decision-based options include removing Ether and shutting down DAO, revoking DAO means there is no central authority to respond immediately and must be approved by the parties.

The Ethereum community at the time made a tough decision on the Ethereum blockchain and tried to return almost all of their money to the old contract. Finally, on July 20, 2016, Ethereum became difficult, causing back-and-forth changes, allowing all Ethereum (i.e. moving) to return to their old place without changing the blockchain, allowing to Ethereum Classic to exist. This is the first time that the main blockchain has been used to exchange information via a fork in order to reward traders.

In September 2016, the DAO value token, dubbed DAO, was withdrawn by major cryptocurrency exchanges (such as Poloniex and Kraken) and became non-existent.

Although DAOs no longer exist, they indicate that DAOs are more secure than organization standards because no one can control the entire organization. And because DAO is a decentralized, licensed blockchain technology, it can be self-regulated without any interference from anything else. He also planted the seeds for the formation and development of future DAOs.

CAD development mode

With the development and in-depth advancement of blockchain technology since 2018, the development of blockchain-based Decentralized Autonomous Organizations (DAOs) has also increased rapidly. Collaboration and independence through the use of blockchain sharing rules similar to blockchain DAO does not exist. Relevant data shows that the number of independent DAOs has increased by 660% since 2019.

With converting DAOs, we generally divide existing DAOs into three categories: one is financial. The best part about this type of DAO is that the important decision to vote is to allocate funds or invest in a project. doing DAO is an investment. The second is management. The primary voting decision of these types of DAOs is not to establish operations or donations, but to determine the governance of the process or the blockchain. Unlike financial aid from DAOs, which often help improve housing, DAO management is often self-managed. For example, MakerDAO, Kyber, etc. are often the regulatory considerations for trade chains or loan agreements. The third category is a kind of joint venture, such as YGG, a sports joint venture, such as YGG, find players, train players, play in the region, integrate skills into the DAO organization and distribute the costs.

The difference between DAO and enterprise

DAO stands for Decentralized Autonomous Organization. DAO stands for Decentralized, Autonomous and Organizing, literally, decentralization is the decentralization of rule making and enforcement, and autonomy means that society decides on its own rights.

The development of DAO relies on blockchain technology and its daily implementation of blockchain, a classification in the industry. Once the distribution is complete, the blockchain smart contract platform ensures that companies improve the integrity of rules to create policies. , and the power to create policy can be transferred to the community through the development of plans.

At the start of a DAO release, there is a large group, and with the exception of the development group, individuals can join, and who can become members. A team like a company. However, the formation of the DAO, the main hope is that it will gradually expand after the transformation of the hierarchy less transparent and strong, and the end of the organization's decision will follow more consensus and ultimately tasks.

Based on this, it can be seen that DAOs have many similarities to business, including setting up individuals for a specific reason, creating an edge in solving relationship problems well and providing opportunities for wealth building ( for example human and global human).

At the same time, the differences between DAO and traditional businesses are also very clear, and traditional businesses are closed and the hierarchy is tight. DAOs have been more involved, giving all entrepreneurs an equal chance to ensure the organization's future success and have a say in decision-making. Since the organizational structure is not limited by the usual hierarchical lines of management, all new ideas and recommendations can be decided throughout the organization. In addition, as the DAO puts it on the blockchain, all financial transactions, rules, regulations and decisions are recorded in a public ledger for all to see. Accepting an agreement also means that everyone is involved in making decisions about how the organization spends their money and keeps track of how much they spend.

Legal recognition of DAO

The participatory process has existed for hundreds of years and was carried out with respect for the rule of law. Faced with the rapid development of DAO in the new development, the establishment of monitoring and legal procedures will continue to be an irreplaceable change.

Approved by the Wyoming State Legislature on April 21, 2021, the DAO (in addition to the Wyoming Distributed Autonomous Organization) Act came into effect on July 1, 2021. The rule of law means DAO can be recognized for its legitimacy. as an organization. , and the legal application of the DAO clarifies the creation, administration, rights and responsibilities of its members.

The DAO responds well to the legal application of the DAO as a new type of organization, and has several key points: first, its quality of application and its legal application. In the definition, the DAO Act defines DAO as a limited liability company. These policies established the DAO policy in accordance with Wyoming law. Second, the DAO logo. In order for the public to differentiate DAOs from their traditional liability companies, DAOs should include the words "DAO", "LAO" or "DAO LLC" in their names. Third, algorithmic management and control. In DAO policy, algorithmic control and administrative control are combined and integrated into legally recognized DAO governance, so there is no precedent in any other form of governance. . Algorithmic control is at the heart of DAO, and DAO law recognizes that algorithmic control is a legal means of administrative control, which is the challenge of respecting technology and respecting leadership. Fourth, smart contracts have a say. The DAO policy not only highlights the important aspects of smart contracts, but also addresses smart contracts in many areas, giving them an important voice.

DAO capacity assessment

The publication "Best Practices, Best Practices for 2022" from Gartner, a global research and information consulting company, provides estimates for the export industry. The DAO noted that it will become a new standard in future collaborations as its own organization that allows its members to operate online worldwide without a “seat”.

Tracheopteryx, a key member of Yearn.Finance, said DAO is looking to the future of human organizations themselves. The distribution of DAOs and their reliance on a strong, trustworthy community will not be good for investors who only engage in cryptocurrencies. DAOs can be the future of workplaces, community cultures, and human organizations.

Lane Rettig, one of Ethereum's main developers, believes self-regulatory organizations (DAOs) are the key to a shattered economy. They are independent, managed by buyers and hold tokens (not CEOs) and operate transparently. I think DAO is the next step in transforming the human organization. I think it's a generational change that will take many years. He also recognizes that DAOs have many problems, but firmly believes that they are meant to contain the world.

Zhu Jiaming pointed out that DAO is the future.

Nutbox CMO Sunny said: The digital business of the future should take the form of a DAO. DAOs are one of the most important innovations in the crypto world. Olaf Carlson-Wee, Founder and CEO of Polychain Capital, says DAOs are the future of venture capital. DAO will be the second largest company in the blockchain space after digital money.