A new way of governance is brewing thanks to blockchain technology. Since the 20th century companies have been funded and organised in serveral ways but most of them develop through a centralized model. However this tendency might come to and end with the rise of DAOs.
What does DAO mean?
DAO stands for Decentralized Autonomous Organization. It is a type of organization run by rules encoded as computer programs called smart contracts and executed on blockchain technology, instead of being run by a centralized authority or management team.
This means that a DAO is not controlled by one single person or group of people, it is managed by a network of participants. Normally, these people are part of the community that supports the organization.
Also, DAOs are typically created for a specific purpose or mission, and anyone can participate in the organization by purchasing tokens or shares that give them a stake in the organization and a say in how it is run. However, members can also be involved by collaborating with their time executing several tasks.
As DAOs activity is transparent, it is considered to be a more democratic and fair way to organize, as decision-making power is distributed among all participants rather than being concentrated in the hands of a few.
Additionally, DAOs can provide more efficient and cost-effective ways to manage certain tasks, such as fundraising, decision-making, and resource allocation. However, DAOs also bring some challenges to the table. Is for this same reason, when participants are way too numerous the difficulty of enforcing rules and resolving disputes increases, not to mention the risk of hacking or other security breaches.
What is it for artists and other content creators?
This way of governing organizations can help artists articulate their own community of supporters in a fruitful and fair manner. Also it can help them develop all those activities that they are not very keen at with the help pf their community members. This is for two main reasons. In the one hand they could stablish a more truthfull and direct way to communicate with their audience and make them part of the decision process. In the other hand, fans could also become supporters and members of the crew.
While the full potential of DAOs is still being explored and their use cases and limitations are yet to be discovered, also legal issues rise. So, the execution of this new and emerging way to govern organizations, will need to be studied carefully in the following years.