Our goal is to demonstrate our expertise with the industry—specifically regarding how to bring blockchain technology to industries that are seeking a leg up in the highly competitive digital marketplace. We will begin with a high-level overview of DAOs— including their signature traits, structuring, and functionality. As we’ll see, BLOCKS’ revolutionary approach brings blockchain technology to promising new ventures.
We will then explore the BLOCKS vision for DAOs. In doing so, we will address pressing questions like why DAOs are important, how the unique DAO architecture is advantageous, and what purposes DAOs can serve in today’s perpetually-evolving online ecosystem. Thus we will show how blockchain can play a key role in helping nascent enterprises flourish.
What is a DAO?
DAOs are decentralized autonomous organisations. The term was created by the SEC in 2018 to describe the state in which a token network has sufficiently distributed activity to no longer rely on a specific group or individual to carry out essential managerial or entrepreneurial efforts. DAOs are internet-native organisations collectively owned and managed by their members, with no centralised authority. Decisions are made from the bottom up, and are governed by a community organised around a specific set of rules.
DAOs are an effective and safe way to work with like-minded folks around the globe. Its rules are encoded as a transparent computer program, which is managed by the organisations members. As the rules are embedded into the code, no managers are needed, thus removing the inefficiencies of bureaucracies while eliminating needless red tape. The DAO model reduces the input that humans must supply for routine and/or mundane tasks; freeing up time and energy to attend to more creative pursuits.
DAOs are distinguished by their use of blockchain technology to provide a secure digital ledger for online organisations to effectively govern and make use of a shared corporate treasury. The DAO’s transaction record and operating rules are maintained on a blockchain. The advantage of this is the ability to assure BOTH transparency and security. Let’s look at each in turn.
A DAO is represented by rules that have been encoded as a computer program in a way that is transparent to everyone involved. DAOs are open platforms where individuals retain control over their identities and their personal data. With the incorporation of blockchain technology, this approach to governance eliminates the need to involve third parties in decisions around corporate treasuries. This is possible because most DAOs use a blockchain wallet, whereby the balances of the corporate treasury are viewable by all members of the DAO.
A DAO is girded against forgery by trusted time-stamping and dissemination of a distributed database. The costs of a blockchain-enabled transaction and the associated data reporting may be offset by the elimination of both the third party and of the need for repetitive recording of contract exchanges in different records. The blockchain approach allows multiple cloud computing users to enter a loosely coupled peer-to-peer smart contract collaboration.
Thus a DAO’s distinguishing feature is that they are decentralized, which is made possible by their use of blockchain technology. This blockchain backing allows for secure contractual collaboration that cannot be achieved in traditional corporate structures. With smart contracts powering everything from governance to the multi-signature wallet corporate treasury, BLOCKS DAO gains power and stability over the competition.
BLOCKS DAO LLC is the world’s first legal DAO LLC. Founded through close work with Wyoming legislators, BLOCKS is setting the standard for compliance in the DAO space.. What distinguishes BLOCKS is its unwavering commitment to pioneering the use of blockchain technology in enterprise solutions. This means establishing credibility in the industry as a trusted source of technological innovation.
BLOCKS DAO is unique in this new realm, but not alone. Like many other DAOs, the organisation employs a token ($BLOCKS), which represents membership in a group chat as well as governance rights in the enterprise being managed by the DAO.
What sets BLOCKS apart is that it is dedicated to pushing the envelope for what DAOs can do. The long-term mission of the BLOCKS DAO is to bring more businesses onto the blockchain. This entails devising innovative solutions around the BLOCKS token, and implementing those solutions via a streamlined process of seamless integration.
What are DAOs for?
DAO is an innovative, new way to facilitate human cooperation via collective ownership. Whether dealing with a group of people harnessing the power of DAO software for their own purposes or making use of the software itself, the role of a DAO is to facilitate coordination. Its virtue lies in its remarkable ability to keep a group of people focused and moving toward a shared goal. DAO software is ideal for finding the most efficient and effective way to coordinate action, which means drastically reducing the kind of coordination failures that so often addle enterprises in their early stages of development.
DAOs are good at doing this because they allow for collective ownership over organisation and decision-making—complex tasks that were previously very difficult to maintain at scale. Such a revolutionary new approach can have a staggering impact on everything from a small club to a large corporation.
Types of DAOs
Let’s look at seven different types of DAO.
The original application for DAOs that proved to be a resounding success was for the orchestration of grants. The model is simple: Communities donate funds and use a DAO to vote on how the capital is allocated to various contributors. This is done via governance proposals; and was initially conducted through non-transferable shares. This meant that participation was motivated as much by social capital as it was by return on its capital. Grant DAOs have shown that, when it comes to capital allocation, niche communities are more nimble than formal bodies.
These DAOs transition power from a core team into the hands of the community, offering a new way for projects to issue fungible tokens into the market. While DAOs initially featured non-transferable shares, Protocol DAOs were the first to issue transferable ERC20 tokens with a secondary market value. Such tokens are commonly used to govern protocols, meaning token-holders have the sole authority to propose, vote on, and implement changes to the underlying mechanics of the network.
Protocol DAOs provided a framework for any network to issue a token that was owned and operated by its community. Participants vote on how to distribute tokens, thereby opening the doors to liquidity mining, yield farming, and fair launches. The idea is to broaden the possibilities, while maximising control over how the enterprise is operated.
Investment DAOs allow members to pool capital and invest in projects at their earliest stages. It is an ideal way to coordinate well-targeted capital infusions. While these DAOs come with a lot more legal restrictions than Grants DAOs, they demonstrate that any group of savvy individuals can come together to invest larger amounts of capital with low barriers to entry.
Service DAOs are effectively talent allocators. They use on-chain credentials to funnel specified resources from one DAO to another, acting as crypto-native talent agencies— from legal to creative, governance to marketing, development to treasury management. These specialised DAOs create centralised working groups for individuals to work for the open internet. A global network that transcends national borders, a Service DAOs is a far-reaching allocation mechanism for anyone who offers vital skills. The idea is to create funnels to contract web3 mercenaries. Work can be rewarded with ERC20 tokens—thus providing ownership over the value created for a network. Service DAOs have pioneered the future of work, thereby transforming what employment looks like in the crypto-native world.
Social DAOs place an emphasis on social capital over financial capital. They are the natural evolution of group chats, where friends can become helpful collaborators. These DAOs are able to transform every group chat into a possible digital enterprise. They expand what it means to be a part of a community; and make it possible for entrepreneurs to find others with similar visions. This is about harnessing the unrealised power of qualified connections, and tapping into the nascent potential of digitally native tribes.
Collector DAOs are designed to collect NFTs. Curator groups serve as the commercial ballast behind a specific artist, entrepreneur, or platform in order to ensure stability and longevity. Such DAOs are thus adept at ascertaining which NFTs have long-term value.
In an age of global access, ownership of the narratives through which information is disseminated should be too. Media DAOs give that power back to those who consume the content. They break down the way that content creators relate to their audiences; and reveal the relationship they have with the content they release. This includes governance over which topics make the front page of any given media outlet. For example, they can play an integral role in media-mining programs that are designed to incentives contributions. The aim of Media DAOs is to generate awareness—turning consumption into a two-way street.
What are the benefits of DAOs in today’s digital marketplace?
Starting an organisation involves funding, so requires a lot of trust in the people one is seeking to work with. However, it is often difficult to trust those with whom one only ever interacted with on the internet. With DAOs, one does not need to trust anyone else in the group; one need only have faith in the integrity of the DAO’s code—which is 100% transparent and verifiable by anyone. This opens up many new opportunities for global collaboration and coordination.
To recognise the significant advantages of a DAO, it is instructive to contrast a DAO with a traditional organisation (T.O.) Many things set DAOs apart from T.O.s.; so it is worth exploring some of the key differences.
In terms of governance, a DAO is usually lateral, and thus fully democratised; whereas a T.O. is usually top down, and thus hierarchical. DAOs have a democratised organisation; whereas T.O.s do not. For any changes to be implemented, members of a DAO need to vote and establish consensus amongst the group. In a DAO, voting is required by members for any changes to be implemented. In a T.O., changes are often demanded from a sole party, and voting is only an option at the discretion of those within a closed conclave (i.e. a boardroom).
The funding of DAOs is mainly based on crowdfunding, which issues tokens. The governance of DAOs is based on a communal effort, whereby knowledge and skills are pooled; and thus maximally coordinated. In a DAO, votes are tallied, and outcomes are implemented automatically—without the need for an intermediary. In a T.O., in the event that voting is even allowed, the votes are tallied internally; and the outcome of voting must be handled manually.
When it comes to a DAO, services are handled automatically, and deployed in a decentralized manner—be it the distribution of philanthropic funds or the deployment of technology. By contrast, a T.O. requires human labor and/or centrally controlled automation, which is costly, time-consuming, cumbersome, vulnerable to corruption, and prone to manipulation. While all activity of a DAO is transparent and fully public. The activities of a T.O. are typically opaque and closed to scrutiny. The operations of a DAO are fully transparent and easily scaled to global contexts; whereas the operations of a T.O. are private, and constrained by the typical burdens of conventional commerce across borders.
A DAO’s financial transactions and rules are recorded on a blockchain. This eliminates the need to involve a third party in a financial transaction, simplifying those transactions through smart contracts. The solidity of a DAO is based on contracts that represent the rules of the organisation. No one can edit the rules without people noticing, because DAOs are transparent and public.
Unlike T.O.s, DAOs are maximally efficient, as they can be set up to run without cumbersome human interactivity, provided the smart contracts are supported by a Turing-complete platform. Through the affordances of public blockchains, DAOs can incorporate deeper practical knowledge in governance without increasing operational transaction costs. The blockchain model enables them to become more and more efficient as they scale.
Finally: While T.O.s are backed by legal status, DAOs function without such formalities, as they can be structured as general partnerships. This liberates them so that they can operate without the logistical snags normally encountered by localised licensure, which differs from place to place.
The Future With BLOCKS
Blocks incorporates many facets of the seven types of DAOs, but chiefly, BLOCKS is identified as a combination of social and service DAO. The BLOCKS priority is onboarding industries onto blockchain through a series of blockchain and industry-agnostic solutions that help make BLOCKS Token a standard unit of measure for blockchain. From real estate and financial services to agro tech and ticketing, BLOCKS will pioneer the blockchain technology space, providing innovative solutions to companies looking for blockchain-based solutions to their business challenges.