DAO series part 1: The rise of Decentralized Autonomous Organizations
The way we conduct business globally is changing rapidly, and Decentralized Autonomous Organizations, or DAOs, are leading the charge. These organizations are quickly becoming the go-to framework for Web3 businesses, with over 10,843 DAOs formed since 2018. This underscores the growing importance of Web3 as not only is the number of DAOs rapidly increasing, but so is the amount of assets locked into them. As of the writing of this article, DAOs are managing assets worth 11.3 billion USD.
The number of newly founded DAOs by year (Source: DeepDAO.io)
DAOs, as a form of organizational management, have several advantages due to their innate structure:
- Decentralized: DAOs are not controlled by any one person or group, making them more resilient to corruption and political interference.
- Autonomous: DAOs can operate without constant human input, allowing them to maintain operations even if key personnel are unavailable.
- Transparent: All decisions and actions taken by a DAO are publicly visible, promoting accountability and reducing fraud.
- Tamper-proof: Once a decision is made, it cannot be changed, ensuring that decisions are final and irreversible.
- Resilient: DAOs can continue operating even if part of the network goes offline, making them resistant to censorship and downtime.
DAOs uniquely address the needs of Web3 businesses and have therefore become a pivotal infrastructure to this quickly growing sector. The number of newly founded DAOs increases every year. Assets under management experienced a 40x increase in 2021. In 2022, despite a notably difficult market environment for Web3 businesses, more DAOs were founded each month than in the previous year.
Therefore, it is no surprise that 2023 is being dubbed as the year of the DAO. Despite the bear market, the growth trend of DAOs is expected to continue, uniquely positioning DAOs as the entity of the future for domestic and global business and community management.
Number of DAOs month by month (Source: DeepDAO.io)
DAOs are revolutionizing the way entrepreneurs conduct business, offering a decentralized, autonomous, transparent, tamper-proof, and resilient form of organization. We see new DAOs forming every day, tapping into new venture opportunities. The future looks bright for DAOs and the possibilities they bring to the ever-expanding business world.
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