The ABCs of DAOs

While DAO use cases tend to be specific to the blockchain industry right now, DAOs may also spread to more traditional areas. For example, joining a DAO may soon become more attractive than joining a startup because DAOs can provide liquidity much faster while allowing employees to directly participate in the governance of the organization.

However, while there is some interest in recognizing DAOs as new legal entities, these are still early days, so most DAOs operate under general partnership rules that may burden DAO members with any debts or liability faced by the DAO.

As internet-native constitutions, DAOs have several advantages compared to their traditional counterparts. By nature of being decentralized and relying on blockchain networks, they are better suited to grassroots organization. They also create more transparency, and they’re open to anyone to participate from anywhere around the world. The ultimate ... See more

DAOs can help their members coordinate and decide on what memes to buy and sell using simple algorithmic-based frameworks. For example, a DAO may be designed such that members have to put forward proposals for what memes to buy, and if the proposal is voted by 2/3 of the DAO members, the DAO will automatically buy a specific meme. (In this sense, a... See more

DAOs can help you find serious people to work with by leveraging both monetary rewards and proof of seriousness. For example, a DAO may ask each of its members to buy a minimum amount of DAO tokens in order to join the organization. Similarly, each member can expect that the value of their tokens will appreciate as the DAO realizes its stated goal ... See more

The autonomy of DAOs is enabled by smart contracts, which are self-executing contracts with terms written as code and then deployed on blockchain networks like Ethereum. The use of smart contracts means that a DAO may function without necessarily relying on the human decision-makers in the organization. A smart contract will execute its terms regar... See more

A DAO uses blockchains and smart contracts to organize the mechanics of corporate governance, thereby facilitating collective participation of distributed participants in the funding and production of community goods. There are now several prominent DAOs in the Ethereum community, and recent legal moves in places like Wyoming have begun establishin... See more