A beginner’s guide to DAOs
by Linda Xie
I highly suggest consuming the full piece here (8 min. read time)
What is a DAO: “A decentralized autonomous organization (DAO) is a group organized around a mission that coordinates through a shared set of rules enforced on a blockchain.” — Linda Xie
Transparency: “One of the main benefits of a DAO is that they are more transparent than traditional companies since all actions and funding in the DAO are viewable by anyone. This significantly reduces the risk of corruption and censorship.” — Linda Xie
Tokenized stakeholders: “A DAO’s assets can be controlled by stakeholders directly via a token. Stakeholders can be pseudonymous and based anywhere in the world. These pseudonymous stakeholders can come together to allocate a DAO’s assets for anything, including to hire employees. This is something that is happening today. DAOs, consisting of hundreds of known and pseudonymous members, have legitimately hired employees based on community reputation alone.” — Linda Xie
Issues: They aren’t the ideal system for everything/everyone. Progressive decentralization = more centralization among certain members of the organization and then over time the DAO centralizes. And open membership could create a lot of noise.
My two cents: If I’m not mistaken, these are the very early days of DAOs. I feel like my immediate gut reaction is if these are entirely legal? Don’t get me wrong, they sound super cool and are definitely the future for some people/companies. A pretty cool recent example is Mario Gabriele’s launch of his $GENERALIST token collab with Jack Butcher. I’m not sure if this would be considered a DAO initiative or I could be completely wrong…I’m still learning!
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