What is DAO and How is it a Revolutionary Business Model?
The revolutionary idea of Bitcoin contributor Mike Hearn could help develop leaderless organizations 30-or-so years into the future.
What is DAO?
DAO, otherwise known as a Decentralized Autonomous Organization, is an idea entails the possibility of having companies and other organizations that can operate without any hierarchical management. In other words, creating a business environment where there is no “boss”.
How is this different than current models of work?
DAOs main objective is to create certain rules that a company can follow, with the help of smart contracts technology.
For example, one of those rules could entail that a company would set aside a certain percentage of earnings for a cause once certain criteria are taken into account. It could also pay employees their salaries automatically once a specific date is reached.
Essentially, this model helps a company work like any other normal organization would, with the difference that rules are enforced digitally.
In 2016, there was an effort made to create a company that worked in such a way, called DAO, where participants would receive DAO tokens to vote which projects should be funded. However, the project failed within months.