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What is DAO?

What is DAO (Decentralized Autonomous Organization)?

Let's start with identifying the essence of DAOs by different influencers in the field.

DAO is an entity that lives on the internet and exists autonomously, but also heavily relies on hiring individuals to perform certain tasks that the automaton itself cannot do. - Vitalik Buterin

DAO means ownership + Distributed Governance system. - Matan Field, in COALA conversations

DAO is a corporation running on the digital jurisdiction. - Yalda Mousavinia, EthCC presentation

A DAO can be seen as the most complex form of a smart contract, where the bylaws of the decentralized organization are embedded into the code of the smart contract, using complex token governance rules. - Blockchain Hub

The DAO (specifically) was an organization that was designed to be automated and decentralized. - Investopedia

DAO is a fancy way of saying a digital system living on Ethereum. - Richard Burton, Balance

DAO is a composition of smart contracts running on the underlying permissionless blockchain (e.g. Ethereum) to form an organisation infrastructure. - Tim Bansemer

A DAO is an organisation that functions without any central point of control (decentralised), resistant to interference from any external party (autonomous), by operating based on the collective input of its stakeholders according to the rules encoded in its blockchain. Jack Laing

A DAO means a smart-contract based heterarchical, distributed and trustless network that operates according to transparent and stakeholder-governed rules on a permissionless blockchain. COALA

DAO – An organization that runs autonomously, in a decentralized manner, that functions without the need for centralized parties to make decisions for the organization to grow, to be profitable, or *physically* exist to serve its overall purpose. A DAO can be an on-chain contract, or a series of on-chain contracts that interoperate to complete some greater organizational function. - Steven McKie

DAC (Decentralized autonomous corporations/companies) are a smaller topic, because they are basically a subclass of DAOs, but they are worth mentioning. Since the main exponent of DAC as terminology is Daniel Larimer, we will borrow as a definition the point that he himself consistently promotes: DAC is the DAO that pays dividends. - Vitalik Buterin

Promises of DAO

Collectivization/Humanitarian benefits

  • Enables collective intelligence
  • Is owned by people driven by purpose (e.g. fighting climate change or maintaining commons)
  • More accountable and resistant to corruption
  • Open, Permissionless & less biased
  • Better social justice, direct democracy like governance

Automation benefits

  • Increase efficiency by removing Managerial Waste
  • Scalable alignment with incentives
  • AI extension possibilities / digital organisms
  • Censorship resistance, unstoppable

Use cases

  • System configuration (Upgrades)
  • Asset Management (Funds allocation specifically)
  • Curation (Membership specifically)
  • Dispute Resolution

https://hackernoon.com/the-state-of-the-daos-b7cba318460b

Emerging use cases

  • Digital identity, identification, authentication
  • Reputation verification/ranking
  • Social Network
  • E-voting

Source

Theoretical use cases

{% hint style="info" %} More use cases to be explored in the next edition of the report {% endhint %}

References: