It's okay to know nook and corner about blockchain so far, now it's time for DAO, The Decentralized Autonomous Organization. Have you ever heard about DAO? It is nothing but a blockchain-powered system that provides a safe way to communicate with strangers on the Internet. Decentralized Autonomous Organization - An open-source code work platform that is completely automated, self-reliable in nature and unaffiliated with a specific nation-state.
When - DAO is an impressive and secure way to work with the like-minded peoples of the world.
Where -In an internet native business that is owned and managed by its members. Only authorized users have the right to control and manage the actions. DAO is used where no one has the authority to access without the approval of authorized members. With DAO’s decisions are governed by voting to assure every individual in the organization has a voice.
How - There will be no chance for dodgy since there is no CEO to authorize spending based on their own whims. Everything is out in the open and the spendings are baked into the DAO through code.
The key objective of using DAO are the following
A secure place to entrust funds to a certain cause
Member-owned community without central admin leadership (Not Centralized)
A safe place to communicate with the Internet strangers
Let us discuss a use case to define why DAO. Proceed further. Starting a business or partnering with the organization requires huge funds and trust to work together (With Unidentified Peoples). Since communications, trust-building and creating workspace is quite complex with the Internet, doing this job via the internet is also very difficult. With all these obstacles, can you proceed to start a business with unknown like-minded people? Obviously no. Right?
But you can with DAO. In DAO you don't need to trust anyone since everything is processed well with the completely autonomous codes. Anyone in the DAO can verify the code, it is absolutely transparent.
The self-viable trait of DAO builds new potential for global collaboration and enhances the earning modes diversity as people can take part in voluntary actions to earn. DAO paves an economy that encourages the earning trend and makes it more reliable. Well, this builds a way where people can earn as per their daily activities like playing games, investing, learning and so on.
In simple words, it shows a way to open up new opportunities for global coordination and collaboration.
Let us see the contrasting facts between the traditional organization and DAO fit organization
DAO Based Organization
Flat and completely democratized
Changes can be demanded from the sole parties.
Voting is offered to the members for any changes to be implemented
All activities remain private and restricted to the public
All activities are absolutely public and transparent
Needs human handling and centrally controlled automation
Services offered are handled automatically in a decentralized manner
The following are the core benefits of DAO.
DAO is an entirely open-source platform that indicates its code is completely open and allows anyone to get involved on the DAO platform. To point out, open-source platforms are more trustworthy since they are open for worldwide developers to build themselves as well as the platform.
Hence, DAO improves day by day with better involvement and transparency from the participants throughout the world.
Trustless in the name itself symbolizes that, you don't have to trust anyone like CEO or manager for decision making and any other activities to undergo, Since the DAO program or organization will proceed without any interruption even if any funding has been stopped as well as if any developer stops working.
To mention, this trustless DAO is not based on any single individual rather than the integrative interest of all individuals in the network.
With the government body intervening, there is no possibility of a shutdown in DAO. DAO never furnishes any information to government organizations. If any organization needs information from DAO, they must comprise a huge number of tokens.
After the completion of all these, they should submit a voting proposal that should be agreed upon by DAO. As a result, no authority or government can shut down the DAO work.
The role of DAO is explained below with the flowchart
The backbone of DAO is its smart contract which defines the organization's rules and holds the group’s treasury. No one can alter or modify the rules except by a vote, once the contract is live on the Ethereum blockchain. To point out, if one attempts to do something that violates the coding rules and logic, it will assuredly fail.
Besides, the treasury is defined by the smart contract that restricts everyone to spend money without the approval of the group. This symbolizes that the DAO’s DAO’s don’t need any central authority, whereas the group makes all decisions as per the voting. Absolutely, it is possible since the smart contracts are tamper-proof when they go live on Ethereum. One not even just edit the code without the knowledge of other people because everything is public.
Explore why Ethereum is the precise foundation for DAOs with the following reasons.
The own consensus of Ethereum is quiet enough for the organizations to trust the network.
Once live, even the owners too can't able to modify the smart contract code. This lets the DAO run by the rules it was programmed with. You can send/receive funds without trusting intermediaries for fund transferring
Despite this, The Ethereum community is more collaborative than competitive letting for the best practices and support system to emerge rapidly.
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