There are many benefits to decentralizing the traditional business structure and turning it into a DAO. For brands, it allows their target audience to have a say in the future direction of marketing and production efforts. In addition, exploring the decentralized autonomous organization model is an appealing option for any forward-thinking company.
The Power Of Decentralization
To some people, decentralization may only seem applicable to cryptocurrencies. Removing the intermediaries and central figureheads from the equation have given rise to alternative payment systems, such as Bitcoin. However, this concept goes much further, thanks to blockchain technology and smart contracts. Introducing more autonomy into the world can benefit billions of people and empower them at the same time.
It is possible to let the blockchain and its smart contracts interface with external information by decentralizing business processes and operations. With that information, contracts can automatically execute commands or tasks without human intervention. More importantly, the Decentralized Autonomous Organization, or DAO, serves a secondary purpose. It allows community members – or customers – to operate and maintain the parameters of the projects and which direction it will head in next.
No one can deny modern organizations have many problems to address. Managing an organization and ensuring smooth day-to-day operations is a very demanding task. Automating the majority, if not all, of these processes will benefit all parties involved. While it does away with the top-down structure, it also provides a level playing field for investors and stakeholders to have a say in all matters. A fresh set of eyes on business operations can do wonders for any brand, big or small.
Moreover, the autonomous structure of the DAO ensures there can be no power abuse. Depending on its policies and rules, stakeholders will have no opportunity to collude and take control over the Decentralized Autonomous Organization. The same applies to any proposal submitted by stakeholders, as there is a cost associated with putting ideas forward. Combined with the inherent transparency – everything that happens is recorded in real-time on the distributed ledger – there are many reasons to explore the DAO model for any business.
Governance Empowers Users
The governance aspect of a Decentralized Autonomous Organization is a crucial selling point. One can argue that combining more people in the governing “body” – assuming they hold the native token or asset as a stakeholder – will lead to new insights and ideas. However, relying on the same group of individuals to make decisions and sign off on ideas will eventually become counterproductive due to bias and narrow vision. Avoiding those pitfalls is essential for any business that wants to succeed long-term.
As thousands, if not millions of people, weigh in on the governance of a project or business, we can establish true democracy. It is very different from the current political and managerial structures society relies on today. Although people are asked to vote or submit ideas, the result is often very different from what most people want. Unfortunately, there are no repercussions in this regard, forcing society to embrace new models, such as a DAO.
Within the blockchain industry, DAOs remain ever-popular concepts. Aloha, a DeFi and NFT platform with a wifi-sharing DApp, embraces this governance model. Projects that cater to millions of suers need to empower the same users to achieve its milestones and adjust wherever necessary. Aloha’s focus on decentralized finance and NFTs can unlock many potential use cases, but it is essential to ensure community members have a say in these matters.
The Decentralized Autonomous Organization model has many benefits, both for projects within and outside of the blockchain and cryptocurrency space. Automation and relying less on human intervention – biased or otherwise – is the way forward for our society in this modern era. A level playing field for global participation by stakeholders sounds more enticing than a top-down business structure that relies on a handful of decision-makers.