The world of work is rapidly changing, and with the rise of blockchain technology, a new model of employment and collaboration is emerging. Decentralized autonomous organizations (DAOs) are at the forefront of this transformation, offering individuals the opportunity to work together on a global scale without the need for traditional corporate structures.

In this article, we will explore the world of DAOs and how they are revolutionizing the way we work and collaborate.

What is a DAO?

A DAO is an organization that operates on the blockchain, which is run and owned by code, with most of the participation and involvement made in the form of token holding or NFT ownership. DAOs do not have a central entity, individual, or shareholder that governs them.

Decentralized Organizations can be found in a lot of places already, mostly in the form of communities, or more forward-thinking enterprises adopting work models such as Holacracy and Self-Management.

In a typical organization (even a decentralized one), humans are the owners of the organization and bearers and enforcers of decisions.

However, a DAO is something that, in some fashion, makes and executes decisions for itself. The organization and the rules that establish it are all written in smart contracts in a distributed blockchain, and the participants and entities that participate in the governance of the organization are also part of that blockchain.

DAOs automate many core functions of an organization like treasury and payments, but they also automate decision-making. Membership in a DAO is a fluid participation where you can join and leave anytime you want.

Why are DAOs the future?

DAOs have been around since 2016, but they are on the verge of going mainstream, becoming the next relevant trend in the space. Web3 technologies are maturing, and due to the pandemic, more people are looking for new ways of working.

They seek more independence and connection with the causes and teams they believe in, with less attachment to typical hierarchies, corporations, and rat-race-like environments.

In the upcoming months and years, there is a big chance that DAOs will gain more traction.

A DAO is an acronym that stands for Decentralized Autonomous Organization. Our goal with this article is to provide you with a brief overview of what DAOs are and how they are changing the tech landscape, hopefully, to spark your curiosity to know more and explore it further.

How will DAOs impact the future of work?

One of the most significant ways that DAOs are transforming the world of work is by changing the way we think about employment. Rather than relying on traditional corporate structures, DAOs empower individuals to work together on a global scale without the need for a centralized authority figure. This decentralized model offers several advantages, including greater autonomy, flexibility, and efficiency.

Decentralized Hiring and Recruiting

DAOs allow for decentralized hiring and recruiting, making it possible for organizations to tap into a global talent pool without the limitations of traditional hiring processes. This means that individuals from all over the world can contribute their skills and expertise to a project, regardless of their location or background. DAOs can also provide opportunities for those who might not have access to traditional employment, such as freelancers or those in developing countries.

Tokenized Incentives and Rewards

Another way that DAOs are transforming employment is through tokenized incentives and rewards. Rather than relying on traditional salary structures, DAOs offer a more flexible and dynamic compensation system. In a DAO, contributors are rewarded with tokens that can be used to vote on decisions or distributed as payment for their work. This model incentivizes high-quality work and allows for greater participation and engagement from all members of the organization.

Platforms like the Task Marketplace are the perfect example of how tokenized incentives and rewards can be effectively implemented. Builders can choose from a variety of tasks or projects to work on and are rewarded with tokens that can be used with real-world value, either through direct monetary exchange or by granting access to exclusive governance rights, or other benefits within the ecosystem.

This model democratizes access to earning opportunities by allowing builders from around the world to select and work on tasks that best match their skills, while blockchain technology ensures that compensation is fair and transparent.

Autonomous Work Arrangements

DAOs also offer greater autonomy and flexibility in work arrangements. Because decision-making is decentralized, individuals can choose the projects they want to work on and the level of involvement they want to have. This allows for a more personalized work experience and can lead to increased job satisfaction and productivity. Additionally, because DAOs operate on a global scale, contributors can work at any time, from any location, making it possible to create a more diverse and inclusive work environment.

How DAOs are Changing Collaboration

In addition to changing the way we think about employment, DAOs are also transforming the way we collaborate. By enabling decentralized decision-making and removing the need for a central authority figure, DAOs can offer several benefits, including enhanced transparency and accountability, and improved efficiency.

Decentralized Decision Making

One of the most significant advantages of DAOs is their decentralized decision-making structure. Rather than relying on a central authority figure, decisions are made through a voting system that is accessible to all members of the organization. This creates a more democratic and inclusive work environment, where all members have a voice in the decision-making process. Additionally, because decisions are made on a blockchain, they are transparent and immutable, creating a high level of accountability and trust within the organization.

Global Talent Pool

DAOs also offer access to a global talent pool, enabling organizations to tap into expertise and knowledge from around the world. This can lead to increased innovation, creativity, and productivity, as diverse perspectives and experiences are brought to the table. Additionally, because DAOs are not restricted by geographic boundaries, they can operate on a 24/7 basis, providing round-the-clock collaboration and support.

Enhanced Transparency and Accountability

Because DAOs operate on a blockchain, all decisions, transactions, and contributions are recorded and visible to all members of the organization. This creates a high level of transparency and accountability, making it possible to track progress, monitor performance, and ensure that all members are contributing to the organization's goals. This can lead to a more efficient and effective work environment, as members are incentivized to perform at their best and contribute to the organization's success.

Examples of successful DAOs and their goals

DAOs have been used and can be applied to multiple scenarios, whether they are building and deploying protocols, building software products, managing investments, and so on. Many other use cases are popping up now, and we’re confident we’ll see an expansion of those too.

Here are a few examples of existing and successful DAOs:

MakerDAO: One of the most successful DAOs, MakerDAO focuses on building and maintaining DAI, a fully decentralized stablecoin. MKR holders are responsible for governing the Maker Protocol, which includes adjusting policy for the DAI stablecoin, choosing new collateral types, and improving governance itself. Anyone can be an MKR holder and participate in the governance of the protocol.
Uniswap: Uniswap is a decentralized exchange (DEX) that enables users to trade cryptocurrencies directly from their wallets without the need for a centralized intermediary. Governed by UNI token holders, Uniswap's DAO is one of the most successful, overseeing the protocol's development, fee structures, and other operational decisions. Uniswap has grown to become one of the largest and most influential DEXs in the world.
Compound: Compound Finance is a decentralized protocol where all the decisions regarding the direction of the protocol are made by owning COMP tokens. Your ownership weight is your voting weight. One interesting thing is that in Compound all proposals must be executable code already. They are not suggestions for a team or foundation to implement later on.
BarnBridge: Barnbridge DAO is building a set of different products focused on allowing better risk management across multiple investments. BarnBridge DAO is governed by the BOND tokens, and all the decisions regarding the future and roadmap of the products are decided by the DAO and token holders.
API3: API3 is building two Web3 Solutions (Airnode & dAPIs). It started as a centralized organization and now they are slowly transitioning to a DAO, where API3 token holders will be responsible to decide the strategy, hiring, and future steps of the organization;
FlamingoDAO: FlamingoDAO is a for-profit DAO, focused on making investments in blockchain-based assets like NFTs. The community decides how and where to apply for the money.
MolochDAO: MolochDAO is focused on developing and growing the Ecosystem, and provides grants and awards to teams and projects across the globe.
Yield Guild Games: Yield Guild Games is an interesting case too. We wrote about Axie Infinity before, which was greatly propelled by YGG. YGG is a play-to-earn DAO focused on making and managing investments in Blockchain & NFT games like Axie Infinity, League of Kingdoms, and The Sandbox.

A few side notes on DAOs

Now that you have a better understanding of DAOs and their impact on the future of work, you might still have some questions about how these decentralized organizations function.

Let's dive into those questions and explore another side of DAOs 👇

Are DAOs part of blockchains?

Each DAO operates on a blockchain, but operating on a blockchain it’s not the same as being part of the blockchain itself. A DAO is an organization governed by smart contracts—self-executing code that runs on a blockchain. These smart contracts define the rules and governance of the DAO, enabling it to function autonomously without centralized control.

The blockchain serves as the underlying technology that hosts the DAO, providing a secure, transparent, and immutable ledger where all transactions and decisions are recorded.

How do DAOs make money?

DAOs generate revenue through various blockchain-based methods, such as selling their own tokens during ICOs, charging transaction fees on their platforms, and earning from DeFi activities like yield farming and staking. They also profit from partnerships, collaborations, and offering products or services like NFTs or decentralized tools.

How much money do you need to start a DAO?

The cost to start a DAO can vary widely depending on the complexity of the organization and the specific goals you want to achieve. For a simple DAO, the basic setup costs can be relatively low, often just a few hundred dollars, which covers the creation of smart contracts and initial setup on a blockchain like Ethereum. However, if you plan to launch a more sophisticated DAO with custom development, security audits, legal considerations, and token issuance, the costs can increase significantly, ranging from several thousand to even tens of thousands of dollars.

Some limitations of DAOs

DAOs do have some disadvantages that are important to consider. One of the main challenges is governance, as decision-making can be slow and cumbersome, especially in large DAOs with diverse membership.

Security is another concern. Since DAOs rely on smart contracts, there's always a risk of bugs or hacks, which could result in significant financial losses. The legal side of things can also be a source of confusion and risk, as DAOs often operate in a regulatory grey area. This lack of a clear legal framework can lead to complications around liability, compliance, and even the legal status of the DAO itself.

Final Thoughts

Ultimately, DAOs represent a significant shift in the way that people organize and collaborate. While they may not replace traditional organizations entirely, they provide a new and exciting model for individuals and communities to come together and work towards a common goal.

With traditional organizations, ownership is typically concentrated among a small group of shareholders or executives. In contrast, DAOs allow for a more distributed and democratic approach to ownership, with members able to hold tokens that represent a share of the organization's value.

Furthermore, DAOs provide a way for communities to come together and collaborate on projects in a way that is more aligned with their values and goals. For example, a DAO focused on environmental sustainability could bring together individuals and organizations from around the world to work on initiatives related to renewable energy, conservation, and other related areas.

About Bepro

Bepro is a task-based marketplace created to help organizations and builders thrive. Organizations can easily create and launch tasks, while builders have the opportunity to work on them and earn crypto as payment. Ready to start? Here's how.