These days, the term DAO is thrown around much more, with several different industries embracing them. On the surface, you’d think that DAOs were just another vague blockchain-based tool. In reality, DAOs are truly innovative concepts that are well on their way to changing how we live and work forever.
How Do DAOs Work?
The difference between DAOs and other tools is that they specifically work to reduce issues of human error and mismanagement. This is done by automatically initiating certain processes when certain conditions are fulfilled and these processes can rarely be stopped or changed.
An example of this would be an organization that decides to put a certain amount of money aside when its profits exceed $1 million. If DAOs are being used, this decision will be written into the smart contracts of the company. When the conditions (profits of $1 million) are met, this money is automatically transferred.
No delays and no one embezzling or mishandling funds. As most of us know, human error and corruption are major causes of issues within organizations and in the world at large. If a fully democratic process that prevents this sort of mismanagement can be achieved, a plethora of issues will be solved as well.
Well, it seems that DAOs are the answer to this question. In terms of being democratic, DAOs focus heavily on voting and giving members of the organization a say in decisions. This is usually done through a native token and those who hold it are able to vote on crucial issues.
So that $1 million that the organization chooses to put aside is decided on by its members and can be voted on again in the future. What’s more, the decisions and actions taken by a DAO are always listed on an accessible blockchain. Members of the organization don’t need to take anyone's word that the action was carried out; they can always see it for themselves.
A DAO World
Just picture what this sort of efficiency can mean for public and private organizations worldwide. The level of transparency that DAOs can provide could lead to better relationships between organizations and their members, workers, and even the general public.
This is why DAOs are being applied in many ways and for many purposes. For example, PleasrDAO, a group of digital asset enthusiasts, has come together to buy rare pieces of art for the benefit of its members, with complete in-group transparency and democracy. Some purchases made so far include a piece by whistleblower Edward Snowden.
DAOs are also finding more functionality among everyday users. ReverseDAO, for example, allows users to swap their loyalty reward from one brand into points for thousands of others, and the team is working with CHAINUP to integrate the loyalty rewards into cryptos. In a typical setting, loyalty points gotten with one business can only be used for that business and within a certain time period. ReverseDAO allows users to convert their rewards to decentralized points that can then be applied to whatever other brands they want. It also creates an easier gateway for customers to utilize their loyalty rewards to crypto investments such as AsiaMiles or any other airline miles into altcoins.
Currently, there are 2,000+ brands available in the ReverseDAO marketplace including Amazon, eBay, and Netflix, and 5,000+ merchants are expected into the ecosystem by 2022.
DAOs of the Future
While the sector is just getting started, DAOs have achieved so much. They have created trusted communities around common goals and provided consumers with more spending flexibility, for starters.
But most of all, DAOs have expanded our idea of how organizations can be run and have offered us new dawn of transparency, efficiency, and community.