Decentralized Autonomous Organization or DAO sounds like a complicated technical subject. From the perspective of blockchain technology applied to autonomous governance without central interference.
However, it is not entirely true. Let us help you to understand DAO easily.
According to a paper by Usman W. Chohan from the University of New South Wales, a DAO is an organization that operates using sets of rules in computer programs called smart contracts.
Smart contracts run using blockchain technology to record immutable and time-stamped data. The two combinations allow organizations to operate in a decentralized and autonomous manner.
In a DAO, the actions are decided based on voting consensus between token holders. Did you know that the Bitcoin network is a DAO because of its protocol and decentralized manner?
The DAO story
In 2016, The DAO raised $150 million in crowdfunding using smart contracts in the Ethereum blockchain. The purpose is to provide an autonomous means for fund management without traditional fund managers.
Apart from that, stakeholders have the right to vote in investments decision and hiring subcontractors. Unfortunately, hackers took advantage of the security vulnerabilities based on a paper published addressing the vulnerabilities earlier. The hackers controlled 3.6 million ETH until the Ethereum blockchain have to complete a hardfork.
DAO moving forward
DAO governance is possible, thanks to the existence of blockchain technology. The advantages of DAO are beneficial in terms of decentralization, transparency, and cost-effectiveness.
However, DAO is relatively new, like cryptocurrency and blockchain. It may take some time for DAO to be openly accepted and implemented worldwide.
Even so, the crypto community is always eager to experiment with innovation and opportunities. Techcryption had the honor to participate in the first-ever DAO workshop organized by Bitcoin Malaysia.
Jason Chew from Bitcoin Malaysia shared his experience attending a DAO workshop and securing his fund for his DAO education workshops. You can read more about it here.
Apart from that, we covered the DAO of Wu organized by TYGS and DAOFest in empowering the creative community with Jason Vandal, a hip-hop artist, and an entrepreneur. You can read about it here.
Imagine the possibilities of running a department in a company using DAO. Exciting!