What is a DAO?
In its simplest form, a DAO is an efficient way to coordinate work with people globally.
As a Decentralized Autonomous Organization, it has no leader, employees, or operations beyond published rules encoded as smart contracts. These rules guide how the business is run, that’s collectively owned and managed by its members, with a treasury that nobody has the authority to access without consensus from the group. Decisions are governed by voting on proposals to ensure everyone in the organization has a voice.
No authorization of inappropriate projects, no dodgy embezzlement or manipulating the books. Everything is viewable on the blockchain and the rules around spending are built into the DAO via its code. By default, these rules lack the secrecy of corporate discretion and can literally be programmed to be as ethical as possible.
DAOs can be set up for a specific project or purpose — yet more frequently are being set up to run without interruption, sometimes functioning indefinitely, and replacing more traditional organizational forms.
The rise in popularity of DAOs as organizational structures can be attributed to their advantages over traditional organizations: they are more secure since no one person can control the entire organization; they are self-sustaining because they rely on unstoppable blockchain technology, and there is usually a better distribution of power which makes them fairer in distributing resources and decision-making than traditional companies.
Why do we need DAOs?
Starting an organization that involves funding requires a lot of trust in the people you’re working with. But it’s hard to trust someone you’ve only ever interacted with on the internet. With DAOs you don’t need to trust anyone else in the group, just the DAO’s code, which is 100% transparent and verifiable by anyone.
This opens up many new opportunities for global collaboration and coordination.
What are the Benefits of DAOs?
Here are some of the major advantages of DAOs:
- Transparency — This is one of the most important advantages since it allows people to see how decisions are being made within an organization.
- Democracy — Democracy offers a great way to make decisions by polling people as opposed to just following one person’s opinion.
- Decentralization — This is one of the most popular aspects because it ensures that no single group or individual can control or corrupt the system and use their power for malice.
What DAOs exist today?
Bitcoin is generally considered to be the first fully functional DAO, as it has programmed rules, functions autonomously, and is coordinated through a consensus protocol. Ethereum further paved the way for DeFi protocols. Today, approximately 159 DAOs are operating with some 714,000 members, with access to $7.3 billion in treasuries.
These DAOs are spreading, growing, multiplying.
The long and growing list includes crypto-household names like UniSwap, MakerDAO, Yearn, Compound, SushiSwap, and ThorChain. Some DAOs govern DeFi protocols, investment DAOs, NFT DAOs — there are even DAOs that intend to reshape media communications and eliminate misinformation as we collectively move toward an increasingly decentralized world.
Early this year, Shapeshift (a privacy-based exchange) made headlines by being the first centralized company to move into implementing a DAO structure in the real world.
In developing a DAO, the management team with the initial vision and impetus to launch the DAO must go through a process of incremental or progressive decentralization. This means spending time to develop a good product fit in the market, a strong community and gradually hand decision-making power to the community over time.
How Does Self-Governance Work in a DAO?
Unlike traditional corporations, DAOs are not just composed of stakeholders, but also token holders. Members of a DAO who hold governance tokens can put forth proposals for the direction of the organization and then vote on them. They are incentivized to exert themselves to the fullest extent of their abilities to ensure the success of the DAO. If a proposal reaches a predetermined threshold of votes, it may be imposed. In this way, the DAO can make decisions based on a majority consensus.
DAO Advantages for Future Businesses
DAOs will have a significant impact on startups and their future business growth as this organizational framework is a technology that is creating new kinds of internet-based companies. There will be unstoppable global manufacturing platforms, loans with no interest, individuals offering goods and services peer to peer within community guidelines, and any other financial service you can imagine — available to anyone in the world.
DAOs will revolutionize the way future businesses will work, with startups existing as a DAO with a blockchain and members all around the world, rather than a company with a head office. These startups will have responsible, proactive members of the DAO at the helm while having a low barrier to entry when the startup needs additional resources or needs to onboard a new team member for example. DAOs will be an efficient way of creating a cooperative on a worldwide scale and provide a more efficient and secure way to manage a business.
The future with SyncDAO
At SyncDAO, we are all behind decentralization as a path forward and know that building a strong community is the key to success in our DAO. In such a decentralized, user-driven model, SyncDAO is positioned to ensure the longevity of the organization and revenue generation by essentially having more eyes on the ball.
The SyncDAO team will focus on setting the nature of the wealth creation game by launching Perpetual Vaults in November, and then through a process of incremental decentralization will pass the torch over time to the community members of the DAO to hold and manage. Together through a shared vision and transparent collaboration, the goal of large-scale, impactful social change through DeFi edges closer every day.
SyncDAO is excited to be part of building that future and welcomes all with a similar vision to join our community and participate in the DAO.
If you’d like to know more about SyncDAO you can check out the website at syncdao.com
You can join the conversation on one of our channels
syncdao.com/discord
syncdao.com/telegram
syncdao.com/medium
syncdao.com/facebook
syncdao.com/twitter
Or check out more in-depth details about the project;
syncdao.com/deck
syncdao.com/litepaper
syncdao.com/tokenomics
You can verify the token address on https://etherscan.io/token/0xcf8829ae9384540c886a151fac3a865794cb9a01 and on the official SyncDAO website https://syncdao.com/how-to-buy-sdg-syncdao-governance-token/
