Thanks to the internet and social media, like-minded people can engage more efficiently than ever, regardless of their geographical location.
In addition, a new type of social network has emerged due to the introduction of digitally native money and banking, allowing like-minded individuals to socialize and coordinate around the capital.
DAOs are software-enabled organizations, to put it simply. They enable individualities to pool coffers to pursue a participated ideal and share in the value created once those pretensions are met.
DAOs are preferred to be the organizational primitive for Web3 in the same way that the LLC( limited liability corporation) was for the artificial revolution.
However, companies are based on the historical financial system and managed through legal contracts.
DAOs are organized by tokens with rules recorded in smart contracts and run on open blockchain networks like Ethereum.
To understand Decentralized Autonomous Organizations (DAO) better, let’s try breaking the terms individually:
Decentralized: refers to the technology on which these autonomous organizations are constructed and is further defined in this article as Ethereum smart contracts. Organizations founded on legal documents recognized by a central authority, such as the government, maybe the polar opposite of this.
Autonomous: in this context, it refers to the ability to continue without outside help.
Organization: This component is well-known, and it may be readily referred to as a group of humans and, if desired, other organizations.
How does a DAO function?
Smart contracts are used to create the DAO’s rules, which are set by a core team of community members. These smart contracts set the groundwork for the DAO’s operations. They are apparent, verifiable, and publicly auditable, allowing any potential member to comprehend how the protocol will operate at all times fully.
The next stage is for the DAO to learn how to acquire financing and impart governance once these rules have been legally inscribed onto the blockchain. This is mainly accomplished by token issuance, in which the protocol sells tokens to raise cash and replenish the DAO’s treasury.
Token holders get their voting rights in exchange for their money, which is generally proportionate to their holdings. As a result, the DAO is ready for deployment once financing is finished.
How does DAO impact social media?
DAOs are social by nature: A social network is created when a DAO is created. DAO is a group of people who work together to achieve a common ideal. They bear communication and governance technologies to function and collaborate efficiently. DAOs naturally combine all members’ contributions, create a shared social network, and allow social data to be monetized on-chain in a transparent manner.
Bridge to Web3 for social media firms: Each social media platform has a stranglehold on a vast quantum of stoner data. As a result, authorities, and consumers are getting critical of this system. Using blockchain technology to ensure data responsibility, openness, and power can help to palliate these issues.
Power of tokens for content providers: Today’s social media is centered on user-generated content and the creator economy. However, the platforms that host such activity collect most of their revenue. Blockchain tokens have the potential to change this by allowing creators to monetize their following using many of the same methods that DAOs use to reward members for their efforts.