DAOs are the foundation of Web3, the creator economy and the future of work

Decentralized autonomous organizations (DAO) started as a simple concept conceived as organizations, created by an idea and driven by developers, automating business functions and processes by leveraging smart contracts and all the fundamental principles of blockchain. The central idea was to flatten the complex business process that various organizations are immersed in and facilitate the movement of assets towards a highly future-oriented digital interaction that did not need intermediaries, promising faster, cheaper and more transparent transaction processing.

By replacing many intermediaries, DAOs themselves acted as digital intermediaries providing transparency and scale, giving them the stature of an organization without the traditional organizational constructs of entities, groups, management, bylaws, and other forms of collective action. While the traditional centralized organizational structure is challenged, the remaining key organizational elements are fueling a new economic revolution that is giving birth to a new economy of creators and bringing together artists, lawyers, developers and creators from around the world to create ideas and monetize them on a global scale in permissionless cryptoeconomic systems built on top of blockchain and Web3 technologies, and essentially defining the future of work.

Reduced reliance on trusted parties, asset tokenization, and the new stores of value enabled by blockchain technology may by themselves enable new types of organizational structures and reduce the power of intermediaries. The famous Ronald Coase rehearsal about him Reason to be for the company, "The nature of the company" explored why companies exist and what elements make them up.

From a transaction cost perspective, the company creates an economic structure where the transaction cost within its limits is reduced through greater control of standardized contracts with its employees and ownership of resources. As the cost of internalizing resources increases, contractual agreements with other companies in specialized areas result. Transaction costs associated with contracting can be dramatically reduced through decentralized verification and blockchain-enabled smart contracts.

While this was the initial thesis behind DAOs, with the speed, efficiency, and costs that leading goals bring, DAOs now represent a significant part of shared-mind governance and the primary driving force behind mining. value of the base layer, or layer one blockchain. platforms. These layer one blockchain platforms render popup Web3 technologies that aim to provide greater control to participants through fundamental decentralization of computing, storage, and interconnection. Many DAOs will emerge representing the collaboration of a global talent pool, digital natives and the ingenuity of a community sharing a common belief system, bringing the term "organization" to life.

Related: DAOs will be the future of online communities in five years

DAO: Pillars of the Creator Economy

A broad definition of DAO would be an organization that records its membership, rules, and responsibilities in an immutable ledger enabled by blockchain technology. Its status and evolution are public and immutable. Joining generally requires resources and a kind of community membership, in the form of tokens, to participate or vote as a participant. The tokens are denominated in monetary assets (fungible or non-fungible tokens), either crypto or fiat. Acquiring tokens, in most cases, requires time and talent involvement, or a purchase using fiat or crypto.

DAOs provide a unique structure that naturally supports a creator economy, in which an economic model supports a structure through which you rent your talent and time, gain flexibility and profit, and leverage them to facilitate fractional ownership in the supported system. and governed by the community. . Blockchain and by association DAOs embody a natural governance structure for borderless online collaboration on crypto-native projects by digital natives which, incidentally, can be leveraged by traditional organizations embracing the principles, similarly. how brick and mortar companies found an on-ramp to digital equivalents in the Web 2.0 era.

While issues persist around regulatory clarity and a framework for investor protection, these digital entities embody a nation-like digital reality: the state is trying to attract talent, capital, and innovation. Although governance and rules of engagement may not be perfect, they are an ongoing experiment with innovation that aims to change the way we live and empower the participation of all communities who want to. Although the arguments in favor of autonomy and collectivization are used to defend the lack of regulation, the ability to acquire voting power and the lack of protection provide a strong counter to this argument. If DAOs become digital analogues of existing corporate and organizational structures, will they continue to serve as a pathway to, or promoters of, a creative economy and support the principles of Web3?

Related: Bull or bear market, creators dive headlong into cryptocurrencies

The future of work

Web3 as a technological paradigm aims to provide rails for the creation, tokenization and movement of value and assets. The goal of Web3 is to resolve content ownership and provide portability of digital assets by tokenizing them and paves the way for exchanging this tokenized value for other fungible tokenized assets, allowing creators to monetize their work effort. These work efforts may include (but are not limited to) mining and content creation, such as art, music, and other forms of non-fungible tokens, that represent a stake in an ecosystem, much like gaming tokens.

In a future in which dynamic organizations, without borders and without hierarchies, can assume a large part of the value creation, a service offering is more conceivable with interconnected value networks, exchanges and bridges that provide connectivity between these ecosystems. These decentralized exchanges or asset bridges not only provide an avenue to exchange various asset classes, but also facilitate the global movement of assets, thus creating truly global economies that attract digital natives and a pool of talents.

Innovation driven by decentralized and transparent token economy models aims to provide an excellent end-user and employee experience, while ensuring that the organization realizes the cost savings and competitive benefits of superior participant experiences. The DAOs involved with DeFi, NFT and various other Metaverse projects provide just that, where a handful of developers or founders conceive initiatives and pursue decentralized development through platform projects or crowdsource development with token incentives and participants who are not only consumers, but also earn income from their significant participation.

Related: DeFi and Web 3.0: unleashing creative juices with decentralized finance

DAOs represent the emerging trend that is driving a deep and lasting transformation of the workplace that combines cultural, digital and philosophical belief systems. This is attracting investment from other token projects and talent from digital natives around the world, thereby creating an experience for all participants that results in a more resilient and empowered workforce and greater community participation.

This article was co-authored by Ananth natrajan Y Nitin gaur.

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