The adoption of decentralized autonomous organizations, or DAOs, have exploded in the past year and participants believe this is just the beginning and argue that more use cases will emerge in the sub-sector.
DAOs are community-led groups that, in theory, empower participants to make operational decisions without centralized leadership. The groups are self-governing and typically raise capital through a token linked to the DAO. The tokens often provide members with voting rights over governance rules, and through smart contracts those votes influence and dictate what DAOs do.
Many DAOs focus on raising funds to support a cause or to purchase an item, whether that be buying a copy of the Constitution or a golf course, as ConstitutionDAO or LinksDAO, respectively, have envisioned.
DAOs have even been compared to a new frontier for coordination, but some DAO participants say examples of this are just beginning.
“There will be a lot of evolution” [for DAOs] as we begin to embed the technology into human behavior,” Sarah Wood, Upstream’s chief of operations, said during a panel at the Avalanche Summit.
“I see a world where you can use a DAO for your book club, or whatever you want.”
Whether it’s friends pooling money or taking action together, collective activity without centralized leadership is something everyone does, regardless of whether they’re in crypto, Wood noted. The DAO ecosystem is potentially helpful for any person or organization looking to pool funds or make decisions together, but there needs to be better education for others to understand, she added.
“I think we’ll see more use cases of people coming together to buy an item, team, or property,” Imran Khan, a core contributor of web3 accelerator Alliance, told Marketingwithanoy. “This idea of social coordination as a way of bringing groups together to buy something is the easiest to digest and implement.”
Just as AssangeDAO has raised more than $53 million to bid for an NFT that would support its mission to free WikiLeaks founder Julian Assange, Khan expects more people to come together in the future to support projects or missions worldwide.
“Except [DAOs purchasing assets]there will be more experiments to get people around the world to follow a mission or theme,” Khan said.
Right now, DAOs are the third stage of online coordination, he said. In the past, Web 1.0 platforms connected people via email or chat rooms on sites like Yahoo or AOL. Then Web 2.0 emerged and online groups were formed through social networking sites like Facebook or Reddit, but those groups often grew on the websites, not outside them, Khan said.
“It was always about growing Facebook, not the group,” Khan said. “So imagine that you can give a sign to the group and allow yourself to grow and mold; that’s very powerful. We’re going to grow and become disconnected from platforms and self-form, and I expect DAOs to be as big as nation-states.”