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Blockchain Decentralized Autonomous Organizations (DAOs)
A decentralized autonomous organization, or DAO, is anything that is operated by code rather than by leaders or hierarchies. It is not run by a single individual or a group of individuals who are in charge; rather, it is managed according to the consensus of those who own shares in the company.
The decentralized autonomous organization, or DAO, is a form of organization that is based on the blockchain and is controlled by a crypto token. Whoever purchases the token is granted the right to vote on significant issues that are related to the DAO.
Why do we need a blockchain DAO?
It takes a good deal of assurance in a company before one can start a business partnership with another person that involves financial contributions.
The code that DAO employs is straightforward and easy to comprehend.
When using DAO, one does not have to put their faith in any one person among the crowd because it is the system itself that makes decisions and puts them into action when certain predetermined criteria are satisfied.
What is the DAO's working mechanism?
We need to find someone to work in the human resources division who can keep track of information and be accountable for it if our company is to operate in the traditional manner. When you hire someone, you'll be subject to significant financial obligations.
There is a code that can be used in its place of DAO. The system now completes all of the work that was previously expected to be carried out by human beings. Despite this, the shareholders, who are human beings, continue to hold the ultimate control. The shareholders decide the company's course of action and either approve or reject new initiatives.
Democracy is enforced rigorously through the use of DAO blockchains. In plainer language, this means that no single body, including the DAO itself, is able to make any changes unless a certain minimum number of people agree to those changes.
What are the characteristics of DAO?
- Fairer organization: It is an organization fairer than the man-run type because of the democratic base on which it is built.
- Transparent: The DAO's operation is transparent due to its open-source code, which any of its investors can review.
- Smart contract: There is a smart contract between the user and the organization. It is a set of regulations that decide the workings of an organization.
- Coercion free: There is no hierarchy maintaining the organization, so it seems impossible for any state to implement pressure on DAOs.
- Easy access: Anyone with access to the internet can buy tokens of DAO, thus gaining the decision-making power of DAO.
- Recruitment: Because autonomous robots require outside talent to repair them as indicated by sensors, The same is the case in DAOs, which require hiring an outsider to remove any flaws.
Due to the decentralized and autonomous nature of DAOs, their developers are unable to provide any guarantees regarding their safety.
Mistakes are possible in autonomous codes, which can result in greater financial losses.
Because interruptions are difficult to detect, hackers have a way in; the same thing happened in 2016 with Ethereum, which resulted in a loss of $50 million.
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