A decentralized autonomous organization (DAO) is software operating on a blockchain that allows users a built-in model for the collective management of its code.
DAOs have a greatly different approach from traditional organizations managed by boards, committees, and executives. Instead of being controlled by a limited group, DAOs are operated by a set of rules written down in code and enforced by the network of computers running a shared software.
Becoming a member of a DAO, involves users needing to first join the DAO by buying the digital asset representing the business. Owning the asset generally grants users the power to vote on proposals and updates, proportional to the amount they hold.
Blockchain pioneer and founder of HashCash Consultants, Raj Chowdhury places bids on the Decentralized Autonomous Organization or DAOs as the future of the organizational structure.
The Future of Organizational Structure
Chowdhury is one of the few in the crypto community of those who have pinned hopes on the DAOs. The HashCash chief has earlier spoken of DAO taking the center stage this year.
Chowdhury widened his horizon, on DAOs bracketing the Metaverse and the physical world. “I see DAOs as the future of organizational structure, in the Metaverse and the physical world,” he wrote in an email. He went on to narrate an instance of a DAO as a sports team franchise owner. The token holders of the organization are to have the power to vote for the players on the team.
“DAOs are also capable of raising startling amounts of funds far exceeding the current ownership models from private individuals,” he added.
Chowdhury harped around DeFi space that will most certainly adapt itself to the DAO structure. “The Decentralized Finance (DeFi) space has a number of exchanges that are code-based executions of asset swapping,” he wrote, pointing to the purchases of assets like cryptocurrency or synthetic assets that reflect stocks. These organizations are already inclined towards DAO-centricity and will gradually remove human intervention.
“This is because a large portion of its operations may be programmed into the organizational structure, requiring only tweaks of code voted on by the DAO token holders,” wrote Chowdhury.
Chowdhury has from time to time voiced his opinions or addressed issues concerning the crypto. He has previously criticized European Union laws restricting the anonymity of crypto. He has also pinpointed the necessity of banking infrastructure to upgrade itself in order to keep up with the growth of cryptocurrencies. Chowdhury was also in the news for his crypto donations to Ukraine. He has also spoken in support of cryptocurrencies being included in 401(k) plans.
The concept of DAOs should be disruptive to a number of existing organizational structures releasing a flood of reactions. A number of those may have valid reasons backing them. “Nevertheless, DAOs are the future of organizations and will be welcomed by a vast section of the population, for their trustless and transparent functioning,” concluded Chowdhury.