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DAOs [1] • 5 Actionable Insights

If you only have a couple of minutes to spare, here’s what investors, operators, and founders can learn about DAOs.

👇 Part 1: 5 Actionable Insights

👉 Part 2: History & Lore

👉 Part 3: What is a DAO?

👉 Part 4: Types of DAOs

👩‍👧‍👦 DAOs are a new way of organizing people.

Traditionally, a company structure has been the most effective free-market approach to accruing talent in pursuit of a goal. That labor is usually persuaded and controlled through wages. DAOs seek similar ends — the creation of value — but rely on a decentralized framework in which workers, users, and other stakeholders have true ownership of the entity.

⚙️ Various types of DAOs have emerged to serve different use-cases.

As interest in the space has increased, DAOs have begun to diversify and experiment with the boundaries of what’s possible. There are DAOs for investing, DAOs for building new products, DAOs for socializing, and many iterations both between and beyond.

💎 Meaningful assets are being managed by these entities.

Those skeptical of the crypto space in general and DAOs in particular, may want to reconsider their stance. These are organizations with real sway, and real capital. Tens of billions are being managed across top DAOs, with some, like Compound, boasting a treasury of almost $1 billion itself.

⏳ We’re still early when it comes to DAO infrastructure.

DAOs have many of the same needs as corporations, but must often deal with greater complexities given their scale, fluidity, and technical stack. That necessitated the emergence of tooling for formation, communication, collaboration, payments, and more. DAOs have a handful of providers to select across these categories, but by and large, choice is limited. We should expect many new entrants to the space in years to come.

🌡 DAOs have clear vulnerabilities that have yet to be fully addressed.

The first DAO was famously hacked, with a bad-actor attempting to siphon off millions in Ethereum. While DAOs are safer today, they carry risks. Contributors often join pseudonymously, meaning reputation capital is not entirely on the line. Furthermore, without sufficient protections, some DAOs are still vulnerable to exploitation.

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