A decentralized autonomous organization (DAO) is a group of individuals who work together to achieve mutual goals. The DAO is run through smart contracts and computer codes that execute transactions and store data on the blockchain. A DAO can be likened to a corporation or government agency ensuring transparency and democratic decision-making through its voting system.
DAO is an acronym for Decentralized Autonomous Organization, a group of individuals who can collectively make decisions in a decentralized way. This can be done through voting in a democratic government or organization. In this case, it’s often referred to as decentralized governance.
The community makes decisions. The members of DAO vote on proposals or projects that will benefit them and the organization overall. If it’s approved by a majority vote (or even just 51%), those actions become official policies or protocols that all members must follow. For every decision not democratically made, there are encrypted rules within the structure of the DAO that automatically execute regulations when specific criteria are met in the network. This created a truly decentralized governance structure that can benefit all members equally.
The most obvious benefit is that you can see what your DAO is spending money on. You have a right to know how the funds are being used and where they’re coming from, so you can make informed votes and help with the decisions of the DAO.
Another benefit of increased transparency is that it helps with accountability in your organization. When everyone knows their actions will be visible to others, they will think twice before spending money or taking an action that might not serve the organization’s best interests. This also helps prevent organizational corruption by making it harder for individual members to hide their activities.
Making decisions quickly is one of the best things about being part of a DAO. No need to wait for board approval or even the support of your peers. The people affected by them make decisions, and all members of the DAO get a vote on each decision. This structure ensures that no individual or group holds a hierarchy over the other members of the DAO.
Many DAOs will offer unique perks to their members.
Perks can be anything. They could include discounts on products, access to certain services or events, or even cool swag. In the blockchain space, many companies have started offering perks such as an annual conference ticket in exchange for holding tokens—it’s a win for both parties as it incentivizes token holders to keep their coins and saves the company money on event costs. The FTX DAO, for example, offers fee discounts for all members and access to exclusive events and monthly token airdrops. The FTX platform holds many benefits for those utilizing the platform and many incentives for new users. If you’re a member of FTX, you can share your FTX referral codes to invite new members and receive even more rewards.
The most important aspect of these perks is that they’re designed to reward members for participating in their community and completing tasks, which promotes active participation among DAO participants.
You can make a difference as part of a DAO
As part of a DAO, you can make a difference. You can help make decisions and help make the organization better. You can also help improve the world and yourself through your participation in a DAO. Beyond that, you’ll be making your digital community better and gaining greater control over your investments simultaneously.
The benefits of joining a DAO are numerous. While the concept is still new, it looks like this idea will be sticking around for some time to come. You can learn more about DAOs by visiting FTX and exploring the new FTX DAO.