DAOs are the foundation of Web3, the creator economy and the future of work

Decentralized Autonomous Organizations (DAOs) started out as a simple concept, conceived as an idea created and run by developers, organizations that leverage all the fundamental principles of smart contracts and blockchain to manage business functions and processes. automates. The basic idea was to flatten the complex business process in which various organizations are stuck and facilitate the movement of assets into a very future-oriented digital interaction that requires no middlemen – faster, cheaper and more transparent. Promises transaction processing.

By replacing many intermediaries, DAOs themselves acted as digital intermediaries that provide transparency and scale, giving them the stature of an organization without the traditional organizational construction of entities, groups, management, charters and other forms of collective action. . While the traditional centralized organizational structure is being challenged, the key organizational elements that remain are fueling a new economic revolution giving rise to a new maker economy and attracting artists, lawyers, developers and creators from around the world. bringing together to form ideas and thoughts. Built on Blockchain and Web3 technologies – and essentially defining the future of work – monetize them on a global scale in permissionless cryptoeconomic systems.

Less reliance on trusted parties, tokenization of assets, and new stores of value enabled by blockchain technology itself could enable new types of organizational structures and reduce the power of intermediaries. Famous Essay by Ronald Coase raison d’etre For the firm, “The Nature of the Firm” explored why firms exist and what elements they consist of.

From a transaction cost perspective, the firm creates an economic structure where transaction costs within its limits are reduced by standardized contracts with its employees with greater control and ownership of resources. As the cost of internalizing resources increases, contractual arrangements with other firms in specific sectors result. Decentralized verification and blockchain enabled smart contracts can significantly reduce transaction costs associated with contracts.

While this was the initial thesis behind DAOs, with speed, efficiency and cost bringing the primary objectives, DAOs now represent an important part of mindshare governing and the base layer, or layer, is the primary driving force behind value extraction from a blockchain platform. represent. These Layer One blockchain platforms represent emerging Web3 technologies that aim to give participants greater control by fundamentally decentralizing computing, storage and interconnecting. Several DAOs will emerge that represent the ingenuity of a global talent pool, digital natives, and a community sharing a common belief system – and bringing the word “organization” to life.

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The DAO: Pillars of the Maker Economy

A broad definition of a DAO would be an organization that records its membership, rules and responsibilities on an immutable ledger enabled by blockchain technology. Its charter and development are public and irrevocable. Typically, joining requires resources and community membership, in the form of tokens, to either participate or vote as participants. Tokens are denominated in monetary assets (fungible or non-fungible tokens), be it crypto or fiat. In most cases, the acquisition of tokens requires either the involvement of time and talent, or purchases made using fiat or crypto.

DAOs offer a unique structure that naturally supports a producer economy, in which an economic model supports a structure through which you hire your talent and time, gain flexibility and earnings, and Take advantage of this to facilitate partial ownership in a system supported and governed by the community. , Blockchain and, by association, The DAO by Digital Native incorporate a natural governance structure for borderless online collaboration on crypto-native projects that, incidentally, can be leveraged by traditional organizations as brick-and-mortar businesses. are equal. The on-ramp for digital counterparts in the Web 2.0 era.

While a framework for regulatory clarity and investor protection is in place, these digital entities comprise a digital reality like a nation – the state strives to attract talent, capital and innovation. Although the rules of governance and engagement may not be perfect, they are an ongoing experiment with innovation that aims to transform the way we live and empower the participation of every interested community. While the arguments of autonomy and collectivism are employed to defend the lack of regulation, the ability to buy voting power and the lack of security provide a strong counter to this argument. If DAOs become the digital analog to existing corporate and organizational structures, will they continue to serve as a producer economy, or to serve as promoters and support of Web3 principles?

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future of work

Web3 as a technology paradigm aims to provide rails for the creation, tokenization and movement of value and assets. Web3 aims to solve the ownership of content and provide portability of digital assets by tokenizing them, thereby paving the way for trading this token value for other convertible tokenized assets, allowing creators to monetize their work effort. helps to do. These action efforts may include (but are not limited to) the mining and creation of content, such as art, music, and other types of non-fungible tokens, which represent a stake in an ecosystem, much like game tokens. Like.

In a future where dynamic, borderless organizations without hierarchies can create more value, the delivery of services is more conceivable with interconnected value networks, exchanges and bridges providing connectivity between these ecosystems. These decentralized exchanges or asset bridges not only provide an opportunity for the exchange of different asset classes, but also facilitate the global movement of assets, creating truly global economies that integrate digital natives and a talent pool. attracts.

The innovation driven by a decentralized and transparent tokenized economic model aims to deliver excellent end-user and employee experiences, while ensuring that organizations achieve cost savings and competitive advantages through improved participant experiences. The DAOs associated with DeFi, NFTs, and many other metaverse projects provide just that, where a handful of developers or founders envision the initiative and pursue decentralized development through platform projects or crowdsourced with token incentives and participants. Those who are not only consumers, but also earn money from it. their meaningful participation.

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The DAOs represent an emerging trend that is driving deep, long-lasting transformation of the workplace that combines cultural, digital and philosophical belief systems. It is attracting investment from other tokenized projects and talent from digital origins around the world, creating an experience for all participants that results in a more flexible and empowered workforce and greater community participation.

This article was co-authored Ananth Natarajan And Nitin Gauri,

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