What ia a DAO ?

A Decentralized Autonomous Organisation (DAO) is a digital platform that uses blockchain technology to enable a group of users to govern and operate a decentralized organisation without the need of any central authority. Users control DAO through a set of rules encoded in smart contracts without any human interference. Some of the examples of DAOs are The DAO, Maker DAO, Aragon and. Moloch DAO.

Uses Of DAO

• Governance: DAO can be used to govern a community, giving each member power to vote on welfare and amendment related issues. Each member can vote with complete transparency to achieve a common goal.
• Fund management : A DAO can be used to manage funds in an Decentralized organisations in many ways like fundraising, fund allocation etc.
• Token Management : A large number of tokens is managed using DAO. In Decentralized autonomous organisation tokens are issued based on contributions made by members towards the organisation which later on gives member power to vote in any decision related to organisation.

Advantages Of DAO

• Decentralized : As the name says Decentralized all the powers and authority is distributed among the members of DAO depending upon the assets holding and is not controlled by a single entity.
• Self Governance: All decisions in a DAO is executed by smart contracts without the need of any any human intervention.
• Accessibility :Anyone anywhere with an internet connection can participate in a DAO.
• Transparency : All transaction and activities like voting and token distribution are recorded on a blockchain and can be easily viewed and audited.

Disadvantages Of DAO

• Complexity : As DAOs are based on blockchain technology which is complex and difficult to understand and managed by a non technical memebers.
• Scalability: Currently DAOs have limited scalability which limits the number of transactions they can handle which limits the growth of a DAO.
• Legal acceptance : DAO operates outside legal authorities and is not accepted in many jurisdictions, which make it difficult to protect the right of its members.
• Security : DAOs are vulnerable to hacking attacks and other threats as these are decentralised and easily accessible.

Future

DAO is a promising new model for organizing and operating digital organisations. With the advent of time, more and more traditional organizations will turn to DAO for more effective operation and management. Overall DAO has the potential to create completely new models of collaboration and decision making, which can revolutionise the way organisations operates.