DAO to DAO Relationships: Describing Business Partnership Through a Web3 Lens
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The future of business will include the formation of and success of decentralized autonomous organizations, better known as DAOs. The Ethereum foundation defines a DAO as being “a collectively-owned, blockchain-governed organization working towards a shared mission”. DAOs are very similar to businesses in which they aim to offer products that scale. The primary difference between today’s businesses and DAOs is the flat and community structure that is baked into the operational structure of DAOs. For example, when it comes to decision making in DAOs, the outcomes are decided by the collective as opposed to a hierarchical decision making process. As DAOs become more relevant in the business sphere, it will be important long term to identify how these types of organizations choose to partner with one another.
Based on DAO structure alone, the direction of the organization relies on the contributors of the DAO to voice their opinions. On one hand, this is a part of the ethos of Bitcoin and the current state of crypto which was created due to a powerful subset of people making decisions that impacted the entire world leading to the “Great Recession” in 2008. While the overall concept of the DAO structure is sound, one would imagine that when it comes to making internal decisions such as new product features and partnerships, the time execution speed of ideas may tend to be slower. In many cases, to spur action in DAOs, a proposal is necessary. The proposals are sent to the entirety of the DAO community, which can have thousands of members, and outline the prospective action desired. After the proposal is sent to the community, the DAO then votes and the proposal is either accepted or vetoed based on the specific organization’s governance rules. The governance rules set the value of the votes of each community.
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