DAO stands for decentralized autonomous organization and is an entity in a digital system facilitated by smart contracts. Smart contracts involve digital tools and protocols that help support specific transactions or other contract elements. Here are some guidelines to better understand the organization, its mission and values, and why it is decentralized and autonomous.
Definition of Decentralized Autonomous Organization
The first code based DAO was launched as a smart contract, running on the ethereum blockchain as an investor-directed capital fund having no conventional management structure or board of directors. The idea of this organization surfaced not long after bitcoin was released. The thought was that if bitcoin needed financial middlemen to work, maybe another organization could operate without them.
It was then crowdfunded via a token sale in May 2016 thanks to blockchain technology on the Ethereum (ETH) Network. In June 2016, the organization failed, striking back later stronger and more improved. It set the record for the largest crowdfunding campaign in history and was considered to be the first true autonomous corporation.
To better help visualize what a DAO is, Mike Hearn, a former Bitcoin contributor, said to imagine this; a driverless car that cruises around in search of passengers and charges them for the ride. After dropping them off, it uses the profits made to go to a charging station. Now to carry out this said mission, the car doesn’t need any outside help, apart from the initial programming.
And this is what DAO represents. The organization gets initial programming to set up rules and then works autonomously, continuing to serve the function. Moreover, with it, there is no need to waste time and effort creating an intermediary to run an organization – the organization does the job itself.
Transparent and Anti-Corrupt
DAO works with popular cryptocurrency and digital ledger operations. Many world governments and businesses are moving toward this operation for more transparency and for evolving innovations for anti-corruption. Thanks to the blockchain technology and the organization’s open-source nature, all transactions are fully transparent and immutable.
DAO can provide a secure digital ledger that tracks financial interactions across the internet, preventing forgeries with trusted time-stamping and the spreading of a distributed database. This approach eliminates the need to involve a bilaterally accepted and trusted third party in a financial transaction, eliminating trustless interactions.
The original theory underlying the DAO was to remove delegated power from financial middlemen and place it directly in the hands of owners, removing the ability of directors and fund managers to misdirect and waste investor funds.
How DAOs Work
In order to even exist, a DAO needs some sort of token that is valuable and can be used for a rewarding system. This token transaction is created first.
After being deployed, the organization is totally independent of its creators and cannot be influenced by outsiders. In other words; it is then autonomous. Even program rules and financial transactions are on the blockchain and cannot be altered. In order to withdraw or move funds, a majority of the DAOs stakeholders must agree on the decision. Even if, for example, an error is found in a code, the majority of the voters must agree on taking action before doing so.
To develop hardware, build a product or write code, the entity needs a contractor to accomplish its goals. These get appointed via voting of token holders.
Proposals are the primary and most effective way for making decisions in a DAO, which can cause an overload of proposals on the network. To avoid this and prevent spamming, commercial deposits could be required.
After a proposal has been submitted, another voting takes place. DAOs allow people to exchange economic value with anyone in the world, like investing, money raising, lending, and borrowing, without the need for an intermediary, but just by trusting the code.
Infinity Economics’ Role
Infinity Economics is a user- and service-centric multipurpose blockchain platform and cryptocurrency based on proven crypto open-source projects. Its DAO mission is to blaze a new path in business organization for the betterment of its members, existing simultaneously nowhere and everywhere, and operating solely with the steadfast iron will of an unstoppable blockchain. It can easily be adopted by businesses and communities through accessibility and ease of use.
Infinity will be the nucleus of many economies going forward, and intends to be at the forefront of supporting innovative and promising projects, products and services in order to become a real and transformational decentralized autonomous organization.
Values of The DAO
The following are the values of the DAO:
- Voluntary participation
- Privacy and the right to anonymity