Main menu


What is a DAO? What is the company?

 What is a DAO?  What is the company?

What is a DAO?  What is the company?

      Our society changes the way we want to make decisions.

      This is something that is deeply affected by the change in our perception of trust and independence.

      Let's go into detail about what a DAO is and all the changes it can generate for the future.

  People who have money to invest in various projects to make profits, generally do not have enough time to sit down and analyze which projects could be profitable and companies need this money to advance their projects.  After this point we can not help but ask ourselves what is the company?

 What is a DAO?

  Board of Directors

  Companies appoint a board of directors to make important business decisions for the company.  This is a group of trusted people who do things like appoint the CEO, decide when one company has to work with another, and vote on other decisions that are relevant to that company.

  Anyone can put their money into a company and trust that the board of directors will make the decisions and be able to choose how that money will become profitable.  This way, people can worry about other things in their lives while the board of directors makes decisions about how to invest them to make them more profitable.

  For this model to work, it requires trust in the board of directors.  We can have this confidence in the current system for two reasons: proxy voting and shareholder priority.

  Proxy voting

  You can choose the directors and choose the person who will make the big business decisions for us.  It can be said that he is a kind of "actor" who makes decisions rather than voting for them ourselves.

  Shareholder priority

  This is a law that tells the people who make these big company decisions that their main goal is to make money for shareholders.  This law states that the first objective is to increase profits.

  Obviously, this would be a fairly basic explanation for how the company operates.  We give our money to those people who are chosen to make decisions about how to make more profits.

  We must bear in mind that trust will not be a very extensive resource at this time.  This destroys the current model of how companies are run.

  Let's look at for-profit companies as an example.  Above we talked a little bit about “shareholder priority,” and some companies made the decision that the main goal wasn’t to get more money, and that wasn’t a good idea.

  Basically, they realized that increasing profits in any way lead us to situations that we do not want on many occasions, such as the destruction of the planet or environmental pollution.

  Along those lines, some states have made the decision to allow something called a "benefit foundation," which says "a company can focus on making money, but it also has to focus on other important things like the environment and social benefit. You have to tell people what you're focused on so they understand where to go."  Their money goes."

  If Profit Corporations challenge the idea of ​​shareholder primacy, DAOs will prove to be a minor challenge to the idea of ​​proxy voting and the board of directors.  This way people start to wonder if they trust the board of directors to make the decision, will the board of directors follow the company's rules?  Are the best decisions being made?  Is a power vote the best way to make decisions?

  What is a DAO?

  So what is a DAO?  In an effort to simplify it as much as possible, a Decentralized Autonomous Organization (DAO) is a business that transforms its members into a board of directors.  In this way, decisions are not limited to a few people, decisions that will affect an entire company.  Instead, it is the company's members who vote on important decisions.

  These laws are programmed into what are known as smart contracts.  Votes and decisions are tracked and implemented through these contracts on the blockchain, rather than taking meeting notes and publishing decisions using presentation forms and proxy data.

  DAOs act as a blockchain store and information exchange.  There are no meetings with a specific group of board members, DAOs have a chat function where everyone can give an opinion about the decisions that need to be made.

  As our perception of trust and independence changes, so does the way we decide to make decisions.  We want to have a voice, we need it, especially when it comes to knowing where our money is going and who makes the decisions about it.

  Law and businesses are working to address these issues in innovative ways, such as DAOs and charities.  States like Wyoming have already proposed legislation so that corporations can be incorporated as DAOs under their LLC law.