Blockchain technology is unleashing different kinds of disruptions crisscrossing the financial markets and socioeconomic spheres. Bitcoin has forever altered the course of history by challenging the highhandedness of governments and monetary agencies that make irresponsible fiscal decisions. In addition, news headlines are always bursting with stories of innovative startups coming up with disruptive blockchain-based ideas for many industries ranging from entertainment to real estate.
However, what many people might not foresee is that blockchain technology could also be a disruptive force that will change how businesses are run and managed. From the earliest days of mankind in hunter-gatherer societies, humans have survived and thrived on collaboration. Of course, the shape and form of our collaboration usually changes and evolves with the times. From tribal warlords who had slaves, to highborn and low born peasants, to monarchies, and now democratic governments; political and corporate governance structures are always in a state of evolution.
Blockchain births a new type of organization
Now, blockchain technology is birthing another type of organizational structure with the development of Decentralized Autonomous Organizations (DAO). A DAO is a kind of organization that is managed without a centralized authority. In a DAO, there won’t be a manager, a CEO, chairman or board of directors. All relevant stakeholders are “contributors” and all contributors get to have a say in how the organization is managed.
The blockchain-based nature of DAOs helps them to stay lean and operational with the instrumentality of Smart Contracts – (self-executing contracts). The application of smart contracts makes it easy to hardcode the rules of the organization without any fears that someone will change the rules; hence, the organization can run smoothly on autopilot with minimal manual input. In a DAO, people can move up the rank to get more decision-making power based on a reputational structure that allows them to draw up proposals and vote of decisions.
DAOstack to provide organizations with the tool to create decentralized models
DAOstack is setting up shop as an operating system for building decentralized autonomous systems. DAOstack provides organizations with the tools they need to leverage plug and play modules to build a DAO or transition an existing corporate structure into a decentralized model. DAOstack considers themselves as a WordPress of sort for the blockchain, in that as you don’t need much coding knowledge to build a website on WordPress, you don’t need much programming knowledge to build a DAO on DAOstack.
A breakdown of DAOstack contains five major components for laying the foundations of a thriving DAO ecosystem namely Arc, Alchemy, Arc.js, the ArcHives, and the eventual DAO. With Arc, people interested in building a DAO can start by choosing elements from a menu of modular governance modules. The prebuilt modular governance modules in turn helps organizations to reduce operational expenses while reducing setup time in relation to trying to build a DAO from scratch.
Interestingly, there are quite several companies are vying to control the market share in the DAO ecosystem. For Instance, DAOstack operates in the same space as District0x, Colony, and Aragon. However, DAOstack’s competitive advantage lies in the fact that they offer organizations a unique opportunity to mix up different kinds of rules and governing modules even though you are working with prebuilt components. Hence, organizations won’t feel constrained to limit their structure and governance rules to predefined modules.
DAOs will change the rules of incorporation for businesses and organizations
Now, when a group of people decide to create a business or organization; they’ll often spend days defining ownership structure, creating legal documents, assigning stock options, managing the fundraising efforts, and determining who is responsible for what in both internal decisions and external relationships.Such organizations will also need to work with a crew of service professionals such as lawyers, accountants, and investment bankers.
With DAOs, businesses can set up their organization process faster, cheaper, and more efficiently on the blockchain than on traditional centralized models. More importantly, DAOs could set the stage for the disruption of the enterprise resource planning (ERP) industry where incumbents such as Oracle, Microsoft, and SAP have a triopoly.
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