DAO Types and Where BLOCKS Fits In

Overview

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.


Transparency

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.


Security

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.


About BLOCKS


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.  

Grant DAOs

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.


Protocol DAOs


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

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

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

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

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.  


Media DAOs

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.  


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.


The DAO

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