While DAOs are still in the early stages of development, they are no longer just a promising concept. A large number of DAO projects and applications have emerged in venture capital, media, grants, collections and more, collectively managing billions of dollars of capital, providing real products and services to millions of people, and creating new ways for people to generate income.
What is DAO?
The concept of DAO was first introduced by American author Ori Brafman in a book called “the starfish and the spider”. In the book, he compared centralized organizations to spiders and distributed organizations to starfish.
DAO, named Decentralized Autonomous Organization, is a distributed organization that works together to create, capture and distribute community value around a common mission, bound by smart contracts.
The goal of DAO’s work is enabled by networks formed around crypto protocols that are becoming a new way to coordinate, measure and reward contributions to complex ecosystems. This shift is already beginning to open up new revenue-generating potential for individuals and is leading to an increasing shift in value capture from organizations (usually corporations) to people participating in crypto networks as individuals.
The ultimate vision of DAO is to provide an economic and social system that replaces traditional centralization and enables decentralized resource allocation around the mission of the community.
DAO has Five Typical Features
- Decentralization: Community rules are set by the community and will not be controlled by centralized organizations; no hierarchical structure.
- Tokenization: Token is used as a condition of participation as well as an incentive mechanism to promote the development of DAO, etc.
- Autonomy: Community members participate in the governance of the community autonomously without the need for employment.
- Autonomous management: DAOs are governed by all community members in the form of community proposals and votes.
- Openness and Transparency: Most DAOs are based on blockchain technology and smart contracts with rules，roles, processes and the results of each decision from proposal, discussion, to voting are publicly recorded and traceable.
The corporate structure’s “control” of social resources has brought about various disadvantages such as waste of resources, wealth skewing, income inequality, and curbing healthy competition. DAO, on the other hand, is a decentralized community self-governance model, in which community members govern together and allocate resources fairly according to their contributions. The non-tamperability of rules ensures the efficiency and transparency of DAO organizations.
Why Participate in DAO?
DAO has the characteristics of full openness, autonomous interaction, decentralized control, complexity and diversity, and emergence. Like traditional organizations, DAOs are not limited by the space of the real physical world, and their evolution process is driven by events or goals, with rapid formation and strong propagation.
Freedom in Distributed Work
The barriers to participation in DAO organizations are low and are not limited by nationality or geographic location. Anyone, anywhere, can conveniently become a part of the organization and leave as well. The whole process is not connected through redundant personnel systems and management systems, but Tokens.
DAO is a “programmable” organization that can reach consensus with strangers and work together to achieve their goals. DAO organizations can achieve global reach in a short period of time. When you want to participate in a DAO project:
- You don’t need to go through any interview or application, you can participate directly according to the open uniform rules
- The test of your work is not your boss or HR, but directly the market
- You get a cash return, but also a part of the project income and decision-making power
When you do not want to participate in the project, you can not only settle and realize your “equity”, but also do not need the cumbersome exit process. The whole process is done in an open market, transparently and in a Permissionless environment.
Free up Time to Match Diverse Incomes
DAO as an open economy will drive the X-to-earn trend, which will make work more flexible, fluid and interesting than work at nine o’clock, finish at five o’clock. Without the clear constraints of working hours and locations, there will also be a higher ability to gain discretionary time. At the same time, the open nature of the crypto economy will allow people to participate in multiple DAOs and crypto networks, mixing and matching different revenue streams and ownership rewards.
In a traditional organization, people would have clear time and place constraints to work, and would not be paid for not keeping their contracts. In a DAO, we all have the opportunity to achieve cross-regional arbitrage, such as paying the cost of a third-tier city in Vietnam with the time income of a first-tier city in the US. Because the distance of cities is in DAO, there are two addresses in the chain.
DAO Turns Job into Investment
In a traditional labor market, a wage earner usually only gets paid for selling his labor, and the amount of time an individual has becomes the upper limit of what he can earn. Every minute invested by a DAO collaborator brings a cash return (you can immediately cash out in the market) and a right to dividends for the growth of the project (the right to hold earnings and decisions that will increase in value as the project grows).
The on-chain reputation system will capture the behavior of our work at DAO: our contributions to DAO, our governance voting history, our token holdings, etc. The reputation system will use these on-chain behaviors to predict our future behavior to determine who is trustworthy, credible, and consistent. The better the reputation contribution or track record, the higher the long-term return on investment.
How to Get Involved in DAO?
Many people would think you need to be a crypto expert or developer to join the DAO, but that’s not the case. DAOs need people with a wide variety of skills and knowledge bases. Many DAOs have writers, graphic designers, marketers, software developers, translators, artists, videographers, community leaders, and more. So even if you are a beginner, you can still find opportunities in the DAO ecosystem.
Currently, DAOs have included multiple categories such as Protocol DAOS, Investment DAOS, Grants DAOS, Service DAOS, Social DAOS, Media DAOS, Collector DAOS, and DAO Operating systems. Before participating, it is best to have a clear participation list.
- Research the DAO ecosystem to find the right organization
- Check out guides and links to useful pages in your target organization’s social media and online resources
- Join Discord and start contributing to your area of interest
- Earn on-chain compensation and reap the benefits
Getting paid from DAO may require some commitment and upfront work. So we have to prove our worth before we start earning big bucks. The best way to join for a beginner is to enter the forum and Discord to find more information.
After joining the DAO, you will need to go and actively participate in discussions, provide input to governance proposals or discussions and participate in community calls. Once you get the hang of it, you can then get involved in more in-depth work, such as helping with the DAO’s core projects or providing resources to new members. Throughout this process, the most important thing is to make sure you are active and provide value to the DAO. When you do things that benefit the DAO’s development, people will start to take notice of your work.
Once you build a reputation in the community, more opportunities will arise, usually starting with the completion of a one-time bounty. In a DAO, it’s up to you to contribute as much time as you want; you can contribute 1 hour a week and still be considered a helpful DAO member. Or, you can contribute to a large number of projects and end up with a full-time salary on the chain.
Frank Sun said, “The future of working in DAOs will be more transient and flexible, and the cost of switching between jobs will become lower and the opportunities more obvious. It will be very interesting to mix and match different income streams and ownership compensation.”
DAOs have incredible potential to harness the power of decentralized networks and the collective intelligence of people, but they need better software tools for coordination, such as those that support governance, software collaboration, money management, discussion, access, etc. On the other hand, a scientific reputation system to determine who to allocate scarce resources to, to avoid an elite monopoly situation. Governance and regulatory issues should also be coordinated so that DAOs can truly achieve “X-to-earn” — playing games to make money, learning to make money, creating to make money, and working to make money.
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