Technology With the Potential To Create A World Void of Censorship & Corruption by Avoiding Centralization? 

Amazing ways in which DAOs via their unique design eliminates centralized management to ensure transparent, coordinated, and balanced living.

Large companies like Amazon with up to 840,000 employees, Microsoft with 160,000 employees, and several others need to ensure maximum productivity combined with efficiency in carrying out functions and this is exactly where organizational structure comes to play.

An organizational structure is basically a system that outlines the functions of various individuals within an organization to ensure that the goals of the organization are achieved. A popular example of this organizational structure is the traditional one whose arrangement is hierarchical and power flows vertically and upwards with a CEO right on top of the organization. Following the arrangement in democracy as well, on paper it is usually said that those at the absolute top are “the people” but in truth, it is the elected or appointed head of state, president, or prime minister. 

Looking at how some top organizations and even the democratic world is set up, they seem to set up to run the best way those at the top (in this case the CEO and the Prime minister, President, or Head of State) deems fit. These methods may not actually be the best for the people but as long as the leader feels it is the best, then it is and this could of course lead to censorship, corruption, and rent-seeking behavior which are against healthy societal living as a result of centralization in the basis of the traditional structure’s design. 

To solve the issues that arise from a centralized traditional organisation, decentralized autonomous organizations are being developed via rules encoded as a computer program that is transparent, unstoppable, and a user-owned network and not influenced by a central government, a CEO, or a leader. Popularly known Decentralized Autonomous Organizations (DAOs) include Bitcoin and Ethereum which are both characterized by qualities including autonomy, decentralization, being based on a smart contract, having a financing phase and token, having an open-source code, and utilizes blockchain technology. 

Why are DAOs absolute essential in the world today? 

Having stated how much centralization which is seen in a traditional organization affects social judgment leading to corruption, censorship, and rent-seeking behavior, there is a need to create a network void of this centralization to ensure that everyone follows the same set of rules for transparency, innovation of new ideas and more. 

How do DAOs work? 

To achieve decentralization which is the basis of DAOs function, blockchain elements of these autonomous organizations are an important part of its design. Blockchain technology eliminates the reliance on a single computer for processing security checks, financial information amongst several other important tasks by relying on a network of independent yet connected nodes. Through this innovative technology, all parts of the blockchain are dispersed and hence, decentralized. 

Also included in the functioning of DAOs are smart contracts which are programmed, algorithmic protocols which come into play when specific conditions arise. Most importantly, these contracts are self-sufficient and do not require human intervention to go through its processing after being set in motion and this is how this organization remains autonomous. 

To keep DAOs stable and functioning, a financial phase and token also need to be available which can be spent by the technology and to reward certain activities within the organization. The financial phase and token also provide a means with which individuals could invest in the DAO to get voting rights and influence policies within the organization. 

Decentralization in the functioning of DAO allows people to exchange funds in different addresses around the world and these transactions could be done in form of investments, charitable donations, money raising, borrowing amongst several transactions without an intermediary. 

Players in DAOs 

Some of the important players in the functioning of DAOs include; 

• Bitcoin: operates via peer-to-peer technology to undergo transactions without the use of an intermediary or central authority. Bitcoin just like gold provides a wonderful store of value as its number of units is finite, it is independent, and most importantly is able to hold and transfer value. 

• Ethereum: this new and ever-evolving technology is community-run powers Ether (ETH) and several applications. Although Bitcoin works better in a peer-to-peer network especially transaction-wise, Ether (ETH) is effective when there is a need to build distributed applications and smart contracts. 

• Decentraland: is also Ethereum-based and functions via blockchain technology to create a virtual world where users can purchase, build and monetize virtual reality applications. 

• BrightID: a potential tool to completely revolutionize democracy, BrightID is a membership DAO that consists of several specialized DAOs which combine together to develop a social identity network. BrightID ensures that only one person is able to use a single profile hence leaving no room for the rigging of electoral results. 

• MakerDAO: enables generation of Dai which is an unbiased currency and a decentralized stable coin. Dai is actually supported by Ether meaning that it is completely decentralized. MakerDAO is a crediting system that allows its users to make use of volatile currency as collateral for loans of stablecoins (called Dai) attached to the U.S dollar. 

• Aave: is a decentralized lending system that allows its user to lend, borrow and receive interests of payments all via crypto assets without the use of an intermediary or central system. 

• MintFund: provides a community through which artists are supported and their arts/talents are brought out for the world to see by providing the artists with funds, mentorship, and guidance for achieving their dreams. They help artists create records of their works capable of lasting as long as the internet itself. MintFund prioritizes BIPOC and LGBTQIA as well as artists outside North America and European Union. 

• PieDAO:  allows its users to create tokenized portfolios by functioning as a decentralized asset manager for automatic wealth creation. Assets produced by the users are referred to as allocation PIEs. These PIEs are designed for composability hence, when core compositions are in place, they can be combined together to give more resilient and stable. 

• pNetwork: is a community-driven transparent governance process that allows easy movement of assets across blockchains. pTokens system is governed by the pNetwork and they are unchained assets that function to move liquidity from one blockchain to another. 

• Badger: is also a decentralized community which is set up to accelerate Bitcoin’s use across Ethereum and other blockchains by producing infrastructure and assets necessary for bringing Bitcoin use to DeFi.

• NFTX: NFTs features an extensive catalog and contains arts, collectibles, tickets, monetized items, and more. The most valuable subcategories are those of arts and collectibles while finding other valuable NFTs could prove quite difficult but NFTX allows users to generate ERC-20 tokens and create funds backed by governance-selected significant arts individual pieces. 

• mStable: is a permissionless protocol created for unifying, securing, and governing tokenized assets. It builds autonomous and non-custodial stablecoin infrastructure. 

• rDAI: known as redeemable DAI and it allows its user to invest currency in an interest-generating pool used for collateralized loans. With rDAI, the investor still has hold of the exact amount invested with the freedom to use it at will as well as decide what the interest is to be used for 

• Uniswap: a highly decentralized financial structure with a commitment to permissionless access, security, and immutability so everyone can access financial services without having to worry about discrimination or third-party interference. 

• Moloch: is a decentralized autonomous system created for the purpose of promoting ethereum 2.0 grants across the ethereum ecosystem especially in relation to privacy, client security, layer 2 scaling and more. 

• Augur: is the world’s most accessible, no-limit betting platform produced with an aim to stop exploitative ways in betting platforms exploit individuals as it utilizes blockchain-based prediction markets to counterbalance the incorrect spread of information on social media. 

• Aragon: this technology allows the internet community to participate in governance by giving everyone unprecedented power to organize around shared values and resources.

• The DAO:  was a digital decentralized autonomous organization with an objective to provide a new decentralized business model for conducting commercial and non-profit businesses. 

• Saint Fame: the world’s first decentralized community-owned fashion house.

• Compound: is a decentralized community of COMP token-holders and their delegates with the ability to propose and vote upgrades to the protocols of the organisation. 

• The LAO: is a global group of enthusiasts supporting the ethereum ecosystem. 

• MetaCartel: an ecosystem of creators and operators building decentralized applications 

• HausDAO: is a decentralized community governance of the DAOhaus ecosystem. 
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TOOLS

• Aragon • Create and manage DAOs
• Roll • Create and manage social tokens
• Rally • Create and manage creator coins
• Collab.Land • Tools for tokenized communities 
• Colony • Create and manage DAOs
• DeepDAO • Find the top DAOs by value, members and participation
• DAOhaus • No-Code platform for Moloch DAOs

Predictions about the evolving world in relation to DAOs 

Giving how laid out the plan is to have a proper ecosystem that promises equity and transparency, it is important to note some of the possibilities of how things may play out in relevance to the coming revolution. Some of these events have been well documented and are discussed below; 

• User-Owned Networks getting an upper hand? 

With the emergence of DAOs, it is clear to see how they improve equity and governance as well as how user-oriented networks like facebook’s public shares will have 1/10th the voting power of private shares. 

• Politicians to help in handing power over to the new system

Those who understand the evolution of the world to what it is today would surely know that change is virtually inevitable and even the politicians would recognize this as well. Individuals who understand the reasons why this new organisation system is beneficial to all would become major stakeholders in the ecosystem. Some of the individuals who have openly declared their support for decentralized autonomous organizations (DAOs) powered by blockchain technology includes; the mayor of Miami who has chosen to directly invest a portion of his wealth into cryptocurrency, members of the congress who have openly shown support for Bitcoin’s meteoric rise as well as the CEO of cryptocurrency donating a substantial amount to Joe Biden’s campaign. We are witnessing a bloodless transmission of power here! 

• Negative externalities will go unchecked: 

Negative externality is a term used when the production or consumption of goods or services exerts a negative effect on a third party independent of the transaction. A typical negative externality is when motorists do not get to pay for the environmental pollution their cars cause. In a traditional organization, carbon credits could be placed on factories that do not still compensate for how much pollution the companies cause but with DOAs for example with Bitcoin miners, these externalities would go unchecked as there is a decentralized system not under a single sovereign leader.

• Network rents will drop

Rent-seeking is a way of transferring previously-existing wealth to oneself in a manner other than voluntary trade. Rent-seeking refers to a means of gaining wealth without creating wealth with theft being the closest example to rent-seeking. Apart from the theft example of rent-seeking, in government today, certain individuals have the power to pass bills into laws as well as formulate policies and since some individuals have friends in power and favor to call in, the basis of rent-seeking is formed in the society today. 

To tackle rent-seeking in decentralized automated organizations (DOAs), Forks creates competition, a commoditizing force to keep power in check. Forks refer to a means by which protocols on how the organization is run could be changed if members of the crypto community grow dissatisfied with functionality. The presence of Forks is a means to ensure checks and balances. 

• Dominant minorities (bankers, farmers, car dealers) will lose their free options.

In companies whose activities (either losses or gains) are mediated by a third party (in this case government officials), the possibility of these companies to maneuver outcomes to their favor is also available. Common companies accused of these shortcomings are bankers, farmers, and car dealers. The bottom line of this accusation is that these companies find a way to be rewarded for their gains and also receive large sums even when failure is recorded so that they aren’t affected by either. In 2019, thousands of farmers received over $100,000 under Donald Trump’s presidential tenure as compensation/means of support from taxpayers’ funds due to floods taking over their farmlands. These compensations ran into billions of dollars with amounts of money being also removed from other sectors. Compensations and incentives could be given but the right amounts should be disbursed but in this case, the compensation given was much larger than the amounts the farmers could have realized. 

These free options include bailouts, subsidies, and anti-competitive legislation all of which the networks have to bear. 

• Vampire attacks will run rampant

With the development of new ecosystems, vampire attacks like the ones organized by sushiswap on uniswap become more rampant as the validity of new movements could create pathways and attractive offers to draw old users into a new one while siphoning liquidity of the former DAO. With the vampire attack, sushiswap was able to attract over $1B liquidity in less than a week. 

Yearn running on ethereum blockchain and functions through lending and trading to optimize earnings on crypto assets makes use of this sort of opportunity which processes like the vampire attack provides. 

• Billion-dollar DAOs will form in days

Considering how efficient the vampire attack was in helping sushiswap develop $1B liquidity, the formation of billion-dollar DAOs in shorter periods is to be expected unlike in the past where DAO like  Aave reach such significant raises. 

What opportunities could the emergence of DAOs provide? 

With policies of equity, transparency, and innovation which DAOs provide, it is also quite important to understand regions/areas in which individuals could fit in. Some of these areas include; 

• The opportunity to cast votes involving policies is made available for token holders of the stated DAO. As seen in the opportunity handed to those Uniswap. 
• Service delivery provided via XaaS could be built around DAOs in keeping with policies of transparency. Examples of this service delivery includes one provided by Cooper Turley as a social token manager. 
• Work for a DAO. Lewis Freiberg earns his highest salary ever ($180,000) as a community manager for ESD.
• Build no-code tools to start and manage DAOs. See Aragon, Roll and Rally. 
•  Build a DAO DaaS. See ad-supported DeepDAO and SaaS-supported Dune Analytics. 
• Launch a community coin. Friends With Benefits membership costs 55 $FWB. 

Important things to note in the revolution that DAOs provide

• Switching costs are costs a consumer has to pay for switching to a brand or product. With the use of DAOs, currencies, social networks and nations would experience lower switching costs as there is no need to include taxes, tariffs, and more due to the decentralized nature of its design. 
• DAOs have provided a pathway for countering corruption by ensuring transparency and the provided smart contracts which are already programmed and eliminates the need for a third party. 
• With the introduction of DAOs, the use of word of mouth/brand slogans is eliminated and it is replaced with the ability of codes to display transparency, decentralization, credibility, and equity. 
• The introduction of DAOs due to their decentralized nature makes censorship-restraint an impossible task and banning buying GameStop shares, downloading TikTok or trading with other nations is also impossible. 
• Past experiences/exposures has properly shown the ability of DAOs to bounce back from strenuous situations while remaining strong and ever-growing. 
• The censorship-resistance which DAOs provide may not be all positive and may also mean externalities cannot be stopped. 
• With the amount of pulls Bitcoin and Ethereum provide especially in the press for both credible and controversial reasons. It should not be controversial due to the basis of its functioning but the interference and controversy provided are barely fueled by the press.

How about the downfalls predicted by non-supporters 

“Didn’t The DAO get hacked?”

Yes. And we’re better for it. See antifragility. 

“Decentralization slows things down.”

Some DAOs seek progressive decentralization. Representative models may help. 

“These don’t sound very autonomous.”

Autonomous is a misnomer. A better term may be DCOs (Decentralized Continuous Organizations) or DUOs (Decentralized Unstoppable Organizations).

“Whales will run DAOs.”

They run existing networks. Covertly with high switching costs. DAOs check power with transparency and forkability. 

“What about the Oracle Problem?”

Be more specific. Time is an oracle. Decentralized networks are oracles. What are you solving for? Most DAOs are not fully autonomous which removes the need for end-to-end oracles. 

“What about private blockchains?”

They’re called computer databases. Centralized and censorable. They’ve been around since the 60s.