A phrase that is often heard today is that \u201ctechnology is\nchanging the way business is done\u201d. Technological development has in fact\nforced many companies to change the design of their business, which in turn\naffects their processes and their way of working.<\/p>\n\n\n\n\n\n\n\n
In this globalized world, more and more companies are becoming\ninvolved in working with people who speak different languages, live in\ndifferent regions of the world and are therefore subject to different\njurisdictions.<\/p>\n\n\n\n
Against this background, with the arrival\nof Blockchain, a new business model known as DAO, from Decentralized\nAutonomous Organization, has emerged, which promises to push the envelope of\ntraditional companies<\/strong>. The term refers to a type of organization that is completely\ngoverned by computational algorithms. As such, it is able to operate\nautonomously, with no need for a central authority.<\/p>\n\n\n\n DAOs are organizations managed by open-source protocols. These\nprotocols (which consist of computational algorithms) are known as Smart\nContracts and they are responsible for defining how the parties involved must\nwork. There are no bilateral agreements involved. Only one law is used: the\nprotocol or smart contract, which determines how all those who make up the\nnetwork behave.<\/p>\n\n\n\n In traditional companies, all contributors have employment\ncontracts, which regulate the relationship between them and the organization\nand with their colleagues. These contracts also stipulate their rights and\nobligations, based on the laws of the country in which they live.<\/p>\n\n\n\n DAOs, on the other hand, bring together a group of people who collaborate\nwith each other for a common purpose that is defined in an open-source\nprotocol.<\/strong> These people are compensated for performing tasks with\ntokens that are usually network-native. The members of a DAO are not linked by\na legal body, nor are they party to any formal legal contract. As DAOs are\nbased on Blockchain and smart contracts, they have lower administrative costs\n(which traditional companies must bear) and they do not need a trusted third\nparty to check the reliability of the decisions made by any of the parties.<\/p>\n\n\n\n The mission of DAOs is to help with a governance problem that\nhas existed in traditional companies from time immemorial: it is known as the\nagent-principal dilemma. This problem refers to situations that arise when an\neconomic actor (the principal) depends on the actions or the nature of another\nactor (the agent) and the latter has less information than he should have.\nThese cases increase in number depending on the level of asymmetry of the\ninformation involved. An example of this is a politician who is acting on\nbehalf of citizens.<\/p>\n\n\n\n A DAO is an organization that can generate income by offering a\nservice but is not concerned with either wages or intermediaries. It also\norganizes its contributors according to a business management system known as \u201csmart working<\/em><\/strong>\u201d, in which all workers are\nresponsible for defining their own schedules and how their tasks will be\ndistributed.<\/p>\n\n\n\n This way of working fits the decentralized model followed by\nDAOs and brings many benefits to these organizations, including international\nrecruitment, which increases the possibility of finding the right profile for\nthe company\u2019s needs.<\/p>\n\n\n\n Another advantage is that no physical space is needed in which\nthe members of the DAO can meet, which translates into savings for these\norganizations, as they do not have to pay for leases or office supplies.<\/p>\n\n\n\n This advanced type of distance working allows the members to\nhave flexibility, as they can work where and when they wish, which means that\nthe work does not stop short because of traffic jams or weather conditions.\nTherefore, decentralized autonomous organizations are considered to be an\nadvantageous, objective business model<\/strong> with only one aim: to protect the\nbusiness<\/strong>.<\/p>\n\n\n\n A DAO is a particular type of organization, the characteristics\nof which are non-traditional. These characteristics are:<\/p>\n\n\n\n \u2013Smart contracts<\/strong>: as mentioned above, organizations of this type are\nbased on a general standard, the Smart Contract. Smart contracts consist\nof lines of computer code. They are valid without depending on any legal\nentity.<\/p>\n\n\n\n \u2013Open-source code:<\/strong> DAOs are organizations that seek to create a\ncollaboration-based community. Because of this, anyone can become a member. And\nthey therefore promote open-source code that is accessible to all.<\/p>\n\n\n\n \u2013Token-based compensation<\/strong>: as the company is based on Blockchain, the incentive for its members tends to be given in the form of tokens, usually ones from that network.<\/p>\n\n\n\n \u2013Equal decision-making power<\/strong>: to be part of a DAO, its users\nmust invest in it, either by contributing up front or by having part of their\ncompensation for each task withheld. This automatically entitles them to decide\non any action taken by the organization.<\/p>\n\n\n\n \u2013Decentralized decisions<\/strong>: any proposal from the DAO must\nbe voted on and approved by a majority of its stakeholders.<\/p>\n\n\n\n As already mentioned, all decision-making in a DAO must be\napproved by its members. This situation can lead to problems or consequences if\nthere is a lack of participation in voting: this would lead to the stagnation\nof the organization.<\/p>\n\n\n\n Another problem can appear because of the very concept of the\norganization, as it is understood to be a \u201cgeneral association\u201d and therefore\nall its members are equally liable for any legal action or financial problem\nfaced by the company.<\/p>\n\n\n\n In conclusion, this new business model promises great benefits\nin the future, from companies with transparent transactions to decentralized\ndecisions within a company that include all the participants in the\norganization without any distinction. Also, the commissions that companies now\npay to intermediaries could be drastically reduced if they become\ndecentralized.<\/p>\n\n\n\n It is definitely worth keeping DAOs in mind, as for many people\nthey represent the idea of a leaderless organization that promotes the use of\ncryptocurrencies at the same time.<\/p>\n\n\n A phrase that is often heard today is that \u201ctechnology is changing the way business is done\u201d. Technological development has in fact forced many companies to change the design of their business, which in turn affects their processes and their way of working.<\/p>\nTraditional companies vs DAOs<\/strong><\/h4>\n\n\n\n
Characteristics of a DAO<\/strong><\/h4>\n\n\n\n
Disadvantages of DAOs<\/strong><\/h4>\n\n\n\n