We are starting to see some discussion about Decentralized Autonomous Organizations (DAO). This is something that was long talked about yet it is starting to become a reality.
A DAO is simply a new business structure. Many feel it will be the replacement for the corporation. While that dominated the last 150 years, enabling massive economic expansion, the DAO potentially could eclipse the corporation in results.
For this reason, it is important for us to consider this model when constructing projects. Since we have a regulatory environment that is slow to change, we have to operate, as best we can, outside the reach of these entities. The DAO can allow us to do this.
Before going any further, we have to note the word "autonomous" in the name. Certainly there are autonomous projects out there like the Decentralized Hive Fund. However, we must remember that most operations are not autonomous. Therefore, we might have to thing of what we are discussed more as digital organizations.
We recently discussed the opportunities to disrupt the film industry. This is one that is full of gatekeepers. The major movie studios control most of the market, from creation to distribution. Cryptocurrency can assist in the generation of funding using new models.
Of course, much of this is going to run afoul of regulators. Here is where a DAO can enter the picture.
Let us use the example of a film. A DAO could be set up as the "owner" of the project. Funding could be done through the tokenization process whereby individuals are able to contribute small amounts of capital (or large if desired). The idea is to get hundreds of thousands of people to buy the token, raising the money required.
If a DAO is used as the business structure, there is nobody in charge. The key will be the distribution. As long as there is not one or two people who have the overwhelming majority, it is hard to pinpoint the "ring leader".
Naturally, there are expenses and people need to be hired. This can be done through the DAOs funding. The coding could be such that certain expenses are placed in there, for distribution as certain criteria are met. There is a lot of experimentation that is going to take place over the next few years with the coding of DAOs.
Here we can see the alignment of the different stakeholders. To achieve the proper level of distribution, ie protection, founders cannot assign themselves a large stake. In fact, they cannot have any ownership other than what they amass through the same channels as everyone else. There is still going to be some legal maneuvering to do, something that will have to be accounted for also.
The economic impact of DAOs could be incredible.
What makes this so powerful?
Basically DAOs allow us to tap into the totality of human potential. It allows for the bootstrapping of innovation.
How many great ideas never see the light of day because they lack funding. Someone comes up with a concept that many believe will work yet the resources are not available. After all, not many of us can go to our parents and get $250,000 to start a company like Jeff Bezos did. Thus, another way of funding is required.
DAOS can offer this. In fact, due to the ability to tokenize, there is no reason why we cannot fund most things. The amount of money we can create is massive. Since we are in a digital world, we see how Network Effects enter the picture. As more are involved in the project, the value only grows.
We also see a lot of discussion about community. This also ties in. Going back to the film industry, what is the fanbase of a particular movie? They are nothing more than a community. What if the community members all had a financial stake in the success of the endeavor? It stand to reason they would be ardent supporters.
Think of the possibilities for the CANCER token. We know hundreds of thousands of families are affected each year by this disease. This is the United States alone. Globally, that number has to reach the millions.
A token of this nature has a built in community. The Network Effect would be almost instant once word got out. Consider all who are involved in this and the potential use cases.
We have researchers who always require funding. Imagine being able to fund that with CANCER. Then we have families of those affected. Many suffer financial loss due to the ailment and death of a loved one. Here is where financial support could be given. Payment for treatments could also be arranged.
To expand the economy a bit further, we all saw the pink (and blue) shirts, ribbons, and hats that people wear. How about those being sold, accepting payment using CANCER.
Here we see one topic where the community is already into the millions.
Money printing is not wealth. That is why countries that engage in this practice tend not to improve their economic situation. What is required is using that money to develop real wealth.
The examples here show how that is done. If a DAO is a funding mechanism, even if not fully autonomous, the money can be used to create films, pay researchers, sell products, or a host of other use cases. As people develop and innovate, the products or services offered only grows. We can see how massive just a few ideas surrounding the CANCER token could be.
It is a process that can be duplicated across almost any idea.
Earlier it was asked how many great ideas never see the light of day due to a lack of funding? DAOs can help to solve this problem. We know there will be failures.
The DAO could be the business structure to release this. We are embarking upon a time where cryptocurrency is going to help fuel the Age of Abundance.
Hopefully we can see how the pieces are starting to fall into place.
Let us know what your thoughts are in the comment section below.
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