Can you imagine being an entrepreneur and having the chance to create your own company, with access to thousands of financial aid from invertors all around the globe while you work with the best experts in the industry anywhere you want? From an entrepreneur’s point of view, it sounds incredible.
If we analyze this situation from an investor’s point of view it’s even better as you could invest in promising companies around the globe without the need to be a certified investor for the company. Everything through smart contracts incentives and governance mechanisms that secure the trust needed in your inversion and the selection and built-up process a start-up needs.
That is why one of my efforts this year is to create a Venture Builder, possibly using these decentralization concepts. That is what I want to write about in this blog, Decentralized, Autonomous Organizations.
DAOs or Decentralized Autonomous Organizations are, as its name says, a new business model to create an organization so it works in an autonomous, and decentralized way. Open code software that enables shared control through incentives and governance mechanisms to pursue collective objectives. But what does it really mean?
Unlike traditional investments, a DAO works through tokens which are defined in the creation of the organization and have a value not only monetary but also in the decision making of the organization. The more tokens you have, the more representation and vote you have in the company.
One of my favorite parts of DAO is the community factor. They are companies that practically operate on their own. Its infrastructure is software that can be run on any computer, anywhere in the world, without the need for approval from a government department or regulatory entity. Even the money they use is global, open source, and beyond the control of any government. Although, of course, there are laws to regularize them.
The decentralization of these organizations can be observed from different points:
They are decentralized in terms of their infrastructure since thousands of computers around the world operate at the same time. This gives a greater confidence factor since if something happens in a particular computer the impact on the company is null since the others continue
to work, checking the integrity of the others. If one computer tries to process a fraudulent event, all the others reject it.
Payments and transactions are made with cryptocurrencies of the same DAO, which also means decentralization and greater self-regulation.
Decision-making is also collective and anyone can contribute ideas. Which means that we leave behind the hierarchical structures of traditional companies. This supposes a competitive advantage since the workers have greater involvement with the company seeking constant improvement. Closely related to what I’ve talked about Fred Kofman and Conscious Business.
Without a doubt, these types of organizations are the future for me. I hope very soon to be able to tell you a little more about the project that I have in hand for this 2022 but you can already give an idea.
Ricardo Orrantia Cantú.