The Company of the Future: DAO

Dmitry Korzhik
Sep 2, 2017 · 4 min read

The future of the organization is distributed, the DAO happened. Imagine an organization where bosses don’t exist as a definition and voices of all members are heard despite their position in the company. Furthermore, employees don’t exist as well but the company gains its market share and earns the profit. Sounds impossible? Not actually. The seeds of a new organizational structure have been already planted.

So, what is a DAO? A DAO stands for Decentralized Autonomous Organization. It’s an organization that is built on a blockchain technology and is operated through smart contracts. A DAO can issue tokens to provide group governance of the organization, pay contractors and token holders. As mentioned in the definition, there are no authorities in a DAO. Decisions are made through a voting system by all members of an organization.

A DAO can bring many benefits and improve a traditional organizational structure.

Motivation. The main purpose of any company is to make the profit. Employees are mostly motivated by their salaries and benefits. However, the performance lowers dramatically if their salaries stay the same for a long time. Employees do the minimum just not to be fired. On a contrary, a DAO enables collaboration between numerous people which are highly interested in the success of the organization. This becomes true by issuing tokens (you may substitute “shares” for “tokens”); those aren’t limited to a group of rich investors but can be purchased by any contributor. Lowering the barrier to entry and enabling to acquire a small number of tokens, helps the organization to become decentralized. Additionally, token holders are involved in processes of a company and have incentives to contribute.

Decision-making liberalization. The process of decision-making in large companies is carried out by board members and corporate executives. This limits the number of decisions taken and its frequency. A junior employee may have an exceptional idea but it can’t be implemented due to bureaucratic barriers within an organization. Actually, an employee can bring the idea to his boss, and then the boss will share the idea with his boss. All steps of communicating will distort the original idea and the board members may only get 1 percent of the original information. That won’t be enough to accept the idea. In a DAO, decisions are made collectively. There are several options how to build the process. The main is a voting system, which allows any member to bring the idea and all members without exception to vote for or against it. A DAO gains value through implementing new ideas and makes that process much easier. Risks of a poor decision-making and deals with related parties are minimized.

Efficient collaboration. A DAO doesn’t hire employees, it hires contractors. These participants may have new roles, even small and temporary. Blockchain technology allows making payments efficiently and at a high speed. Anyone who has enough expertise can contribute to a DAO and get payment for good work. The quality of work is evaluated by the whole DAO community.

Clear processes. Existing organizational structure doesn’t have enough flexibility. For instance, a company requires preparing extended contracts for legal work and release payments via slow wire transfers. Decisions are made through tons of paperwork and protocols. A DAO can simplify the processes and make them automatic. Legal work is recorded by smart contracts, payments are made automatically according to the result, and decisions are made faster and by the whole group.

Companies gain the competitive edge through innovations and fast decision-making. Modern rules of running a business are forcing companies to implement new features in order to be on the top of the industry. That is getting harder with traditional hierarchical organizational structure. A DAO enables to make that process easier and faster. In result, DAOs will grow up in size and gain their market share. That’s why more and more DAOs are being started nowadays. One of the first DAOs is RocketICO. It is a decentralized accelerator based on the DAO fundamentals. The platform helps new DAOs to be created, raise funds and provide powerful marketing tools for entrepreneurs. Moreover, it helps the investors to separate the wheat from the chaff. Will it result in the creation of numerous DAOs? Maybe yes, maybe no. But the tendency shows that people are excited about blockchain and DAOs. Nothing can stop them from creating new apps and companies based on blockchain and DAO fundamentals.

Blockchain and DAO provide a new way to operate businesses. It’s more secure and faster than existing options. The future of the decentralized organization is close and you can feel it, do you?

RocketICO — the world’s first decentralized accelerator, built on the principles of DAO. This ecosystem provides the chance for the teams with their ideas, experts and investors efficiently and safely interact through smart contracts ethereum to create projects and bring them to the ICO with raising funds in cryptocurrency. The platform is based on the basis of Solidity DAO framework and is a decentralized web application (dApp).

Join to our Slack channel to continue discussion or visit Thank you!

Dmitry Korzhik

Written by

Co-founder Rocket DAO. Web&mobile&AI&blockchain development in Belarus

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