On this webpage we will be discussing why Influential Entrepreneurs to Operate on DAOs. Also, we will look at the topic’s relationship with entrepreneurs, members, businesses, organizations, etc.
One will ask, what are DAOs? However, it stands for ‘decentralized autonomous organizations’. Presently, the influential entrepreneurs we have are Jack Dorsey, Elon Musk, Mark Cuban and so on. So, why will upcoming influential entrepreneurs start a DAO?
This entrepreneurs, didn’t just become influential overnight. Most of them put in place, structures and innovations that builds the economy. Mark Cuban believes that, if majority of the people can engage in DAOs, it will boost the economy of the world. However, some still ask why the next set of influential entrepreneurs will engage in DAOs and not other cooperation. Can DAOs stand the influence of great business structures and their stakeholders? Of what use is decentralized autonomous organizations? All these will we study as we proceed.
Influence Of DAOs On the Business Structure
There are a couple of individuals we regard as the pioneers of the modern world. This is so, because they made moves and actions that made the economy better. Larry Page and Sergey Brin from Google and Richard Branson from Virgin are all on this list.
The chief executive officer of Dallas Mavericks made a tweet. He made it known that DAOs adversely affect corporation because, the focus on top tank businesses. Also, that decentralized autonomous organizations is a product of progressivism and capitalism. On the other hand, some entrepreneurs have put DAOs to work. They are already milking the benefits that comes with it. Some of them like LinksDAO, members of Krause House in DAOs and CityDAO have set off already.
To help you understand properly and answer some of your questions, we will look at entrepreneurial culture. Also, how the companies carry out their activities and all. This way, you will understand the beginning part well.
Without entrepreneurs, our economy won’t develop. With their act of creativity, they keep introducing exceptional products to the market. Think of anything at all, an entrepreneur is part of the creation. What is entrepreneurial culture all about? It is an avenue where prospective entrepreneurs make innovations and take risks.
The Amazon marketplace, is an establisment of an entrepreneur, Jeff Bezos. With this, people can access product online easily.
Diversification of business structure is advisable, although, most entrepreneurs choose a corporation structure.
Working Principles Of Corporations
We must have come across the word corporations. However, corporations are establishment or business that obtain some advantages from limited legal liability. Meanwhile, for any issue of debt, the shareholders are not responsible for it.
The design the structure of corporations to have top stakeholders. Those top stakeholders are the CEO and the CFO. They are incharge of approving crucial decisions of the corporation.
Most importantly, cooperations have the mandate to utilize funds of investors. At the end, the result should be high profit for the investor. In a capitalist system, the chief executive officer, plays a crucial role in propelling it.
Most actions that happen also have a negative impact on the employees. Inequality, poor state of life, underdevelopment, are the impacts it can create. An analysis by The World Economic Forum shows that a greater percentage of profits go to the rich people. This leaves the lesser percentage for the poor.
This is where DAOs come. This business structure will help in eliminating most of this issues employees in cooperations face.
Meaning Of DAOs
Like we made mention of it earlier, it stands for decentralized autonomous organizations. Its goal is to interaction and produce constructive ideas for wealth creation. Meanwhile, it shares some similarities with centralized organizations. Still, it has its disparities.
Therefore, it runs on a digital stream, devoid of a single holder of authority. There is nothing like manager or director. DAOs operate on a consensual agreement through voting. Its full autonomy means, their is no third party that it needs for processing anything. Above all, it stores all its financial activities on blockchain. To ensure the efficient functioning of decentralized autonomous organizations, smart contracts were set in use. It functions on coded instructions which it executes efficiently after they reach an agreement.
After members on DAO’s make an invest on a particular business, the profit goes round automatically and equally. No need for a treasurer or financial secretary.
So, entrepreneurs like Andreessen Horowitz invests so much funds to support DAOs. He also assist other project, running on the block chain. Another assistance from a group, “a16z” to a DAO by name “Friends with Benefits” is on record. The goal of this organization is to build a group of creative individuals on Web3. However, a member of a16z made it clear that, “Friends with Benefits” is a base for breeding a web3 class. Engaging in it will fetch it the prospects that comes out from it. Similar to a16z, there are other venture capitalist that support DAOs.
Difference Between DAOs And Current Businesses.
There are lots of differences between DAOs and corporations. But, you can refer to DAO as a new and broader way of a business structure At the initial stage of corporations, the only commence with a few members. Gradually, the develop and new members join in. The more it develops, it attracts more investors. When it attains a full scale of being in the stock exchange, anyone can now buy shares from it. The higher your share, the higher your rank in the organization.
On the other hand, DAOs provides all its shareholders, equal right to give their opinion. Their is no hierarchy, everything decision is on a consensual agreement. So, the both organizations have a common, but approaches it from a different angle.
DAOs has always been decentralized and democratic, just that, its digital and blockchain features are still new.
In Rochdale, England, 1844, they made the first cooperative. They people carry out the practice of permitting employees to give their opinion.
Meaning Of A Co-operative
Cooperatives are basically establishments that operate on the basis of people. Every action is on the members, both the running of the investment. For any request made by a member, it gets one vote. It doesn’t matter what your status is.
Unlike corporations that at solely dependent on profit, co-operatives can provide varieties of benefits to its member. Shareholders doesn’t own it. Cooperatives are unique is various ways. They put back any left over profit the make into the business. Sometimes, the can share it to members as incentives.
In recent times, a large number of cooperatives are functional. Well, there isn’t much number of people who are members of it. On the other hand, a company, Mon dragon operates as a cooperative for a very long time. It has an estimate of $12.1 billion for its annual revenue. This disproves the notion that cooperations are the ideal form of monetizing businesses.
Similarities Between Cooperatives And DAOs
- They are both democratic;
- None of them operate to satisfy the interest of unknown shareholders;
- They look out for the benefits of their member.
We shall answer the question why the next influential entrepreneurs should operate a DAO.
Advantages Of DAOs
In comparison to traditional business structures, the advantages of DAOs include:
Low Overheads and Global Reach
To start up a DAO doesn’t really require much. In terms of cost, one needs quite a few funds to run it. It has a tiny overhead. Also, it doesn’t a settlement or equipments to operate. All these, enables new entrepreneurs to settle and work without thinking of renewing rent or upgrade of equipments.
More so, there is no need for intermediaries. Therefore, the need to pay them is absent. However any payment, is made by its smart contracts.
Its biggest challenge is to build up the first code, which it will run on. Also, DAOs require a server to host a blockchain which will help it function properly. So, securing a server space could be difficult.
Most importantly, DAOs are widespread. Entrepreneurs have the ability to access it anywhere around the world.
Sincere And Clear Operations
What makes DAO’s activity transparent is because, the state out their rules and regulations. It is accessible by its members and can be reviewed. All about DAOs is in it. So, it guides the members and informs new entrepreneurs. However, the blockchain serves as the storage for transactions.
Entrepreneurs can also make use of DAO’s smart contracts to communicate with different people anywhere in the world. There is no need for intermediaries. This method saves time and cost.
Transparency and sincere operations here, reduces corrupt practices. Also, detection of corrupt members will be easy.
Less Stressful To Fund
Crowdfunding also functions in decentralized autonomous organizations. It does this by making and selling tokens. This can attract people from around the world. Therefore, being beneficial to the organization by making it global. They are also obtain funds from venture capitalists and Investment banks. This is similar to the traditional businesses. This is its similarity with traditional business structures. The more convenient way to raise funds is through token sales. This is because, it has a low risk.
Democratic Form Of Business
The beauty of DAOs is its democratic nature. It allows for consensual agreement, as long as you are a member. Every member has the right to contribute their opinion to the operation of DAOs. This is different from a regular business structure.
Contrary to the communication level in a traditional business, members of DAOs enjoy sound and interactive communication. Any opinion or contribution is reviewed and not discarded. By obtaining different opinions and criticism, the organization can take the right decision. This increases efficiency.
With the transparency and sincerity, DAOs offer, employees tend to show dedication in work. Otherwise, they will just be have focus on the money and benefits.
All these points show why the next generation of influencial entrepreneurs want to operate a DAO. But, what is the possibility of achieving this?
Possibility Of An Entrepreneur Operating A DAO Like Other Businesses.
Its is in relation to the US state of Wyoming. There is a possibility of operating a DAO as a business. However the US government can approve and recognize it. In the previous year, Wyoming’s Governor passed Bill 38. This bill conferred to DAOs the rights of a proper business. This is a form of recognition, which also bestow on DAOs, the rights of limited liability companies. It is a boost to their status, which will make DAOs stand amongst other establishments.
The promotion and validation from other countries can make DAO scalable. Also, it will help it earn recognition from the law. However, individual interest still matter, regardless of whether it is a DAO or a normal traditional business.
Businesses like Amazon and Unilever have made name and public impact. This makes people to generally accept it. For DAOs to be able to stand on this level, they must diversify and take an extreme action
It is clear that decentralized autonomous organizations can’t just gain solid ground out of no where. Obviously, it will take some time and dedication from the next generation of influential entrepreneurs.
Regulation and Challenges Facing DAOs
Some of the challenges that DAOs face, is as a result of insufficient legal embodiment. This is suppose to oversee the smooth running of a DAO. However, the quest to regulate it hasn’t been easy. This is because, it is only the members that restrict it. In other words, external bodies can’t act on DAOs.
Its special feature of being digital also aids in withstanding regulations. The regulations that members observe, is that which governs them. To clarify, government laws can’t do much impact on DAOs. It stores most of its transactions on blockchain. So there is no way government can even access it. However, the only place regulators can impact on DAOs is on the number of members. They can bridge the number of participants.
In conclusion, ensure that the decentralized autonomous organization you are in, is bearing a limited liability tag. This will help to protect you from any fault or irregularity. Currently, they do not have the rights of limited liability. Also, not many countries recognize it as a business structure yet. To sum it up, everything on DAOs is on believe and optimism. Its structure shows that it will definitely, improve the world’s economy.