Forum Views - January 2023

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FORUM VIEWS - JANUARY 2023

This opens up so many new opportunities for global

collaboration and coordination.

DAOs are an effective and safe way to work with like-

minded folks around the globe. Think of them like an

internet-native business that's collectively owned and

managed by its members. They have built-in treasuries that

no one has the authority to access without the approval of

the group. Decisions are governed by proposals and voting

to ensure everyone in the organization has a voice.

that means no one can spend the money without the

group's approval either. This means that DAOs don't need a

central authority. Instead, the group makes decisions

collectively, and payments are automatically authorized

when votes pass.

This is possible because smart contracts are tamper-proof

once they go live. You can't just edit the code (the DAOs

rules) without people noticing because everything is

public.)

To understand what is the power of a DAO and why over

time they will replace traditional organizations, we need to

understand the weakness in modern corporation and how

they are governed.

Today if we look at traditional companies they have five

core structural characteristics, that make them productive

and efficient:

legal personality, limited liability, transferable shares,

centralised management under a board structure, and

shared ownership by capital contributors.

however these companies are not governable and that’s a

fundamental problem. Because of the divergent interests

between shareholders, managers and external

stakeholders and Despite robust internal processes

outlined in company constitutions and the codification of

industry best practices in legislation, empirical analyses

suggest that modern corporations remain susceptible to

failure.

We need incentive mechanisms and structural safeguards

to overcome this issue and this where lies the power of

DAOs.

DAOs ostensibly eliminate agency costs due to the absence

of a board of directors, automated governance mechanisms

and transparency provided by the blockchain upon which

the DAO is launched.

Rather than decisions being made by a board of directors,

governance rules set out in code typically decentralise the

decision making power across DAO token holders. As these

token holders are the owners of the DAO, the division

between capital and labour is reduced. DAO proponents

argue that DAO token holders do not face the same agency

relationship that company shareholders face through

delegated decision making. Instead, token holders

contribute to the DAO in a non-hierarchical, “dynamic set of

working relationships that continuously and dynamically

self-organize around projects and outcomes.

The metaverse seems set to

reshape the world of work in

at least four major ways: new

immersive forms of team

collaboration; the emergence

of new digital, AI-enabled

colleagues; the acceleration

of learning and skills

a c q u i s i t i o n t h r o u g h

virtualization and gamified

technologies; and the

eventual rise of a metaverse

economy with completely

new enterprises and work

roles.

There's no CEO who can authorize spending based on their

own whims and no chance of a dodgy CFO manipulating the

books. Everything is out in the open and the rules around

spending are baked into the DAO via its code.

Unlike traditional organizations DAOs are transparent,

inclusive and democratic.

Before starting or joining a DAO you need to fully

understand how DAOs work.

The backbone of a DAO is its smart contract. The contract

defines the rules of the organization and holds the group's

treasury. Once the contract is live, no one can change the

rules except by a vote. If anyone tries to do something that's

not covered by the rules and logic in the code, it will fail. And

because the treasury is defined by the smart contract too

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