AssangeDAO is popular all over the network, let’s see what is DAO?
This is the 1560th original issue of the vernacular blockchain
Author | Sanli
Produced | Vernacular Blockchain (ID: helloBTC)
In recent days, AssangeDAO, a project under the banner of “Rescue Assange”, has raised more than 17,000 ETH (about $52 million) in just a few days, becoming a new hot spot in the crypto circle.
(Additional background: Assange is an Australian journalist who was wanted for leaking US government scandals and is now in a London prison; in December last year, a British court ruled that the US government was allowed to extradite; if successful, Assange may face long-term 175 years in prison.)
So what exactly is a DAO? Let’s take a look at what role it played:
01 What is DAO?
DAO is an acronym for Decentralized Autonomy Organization. In nature, bee colonies, ant colonies, etc. are all-natural decentralized autonomous organizations.
In a centralized environment, with the rise of Bitcoin and the rise of blockchain technology, decentralization (ie, distributed) based on the autonomy of community consensus has become an attractive way of collaboration. In this process, Everyone must abide by the consensus that has been reached. Therefore, many people are fighting for this ideal way of collaboration.
Distributed autonomous organizations were first proposed by the American writer Ori Brafman in a book called Starfish and Spiders. In his book, he likened centralized organizations to spiders and distributed organizations to starfish and explained the differences in detail. He writes in the book:
Spiders are centralized (cellular) tissues and cannot survive if their head is removed (whole tissue). The starfish is made up of a bunch of cells that are equal to each other (without a center), and each tentacle torn off by the starfish can grow into a complete starfish.
Starfish and spiders represent two kinds of organizations in the real world, decentralized and centralized, respectively.
When the starfish-type organization encounters setbacks and conflicts and is broken down, its organization will become a smaller decentralized organization and continue to function; while the spider-type organization will not be able to continue to operate after the head is cut off.
In contrast, a starfish-shaped decentralized organization will have a strong vitality.
This kind of analogy allows us to understand the concept and characteristics of distributed organizations, and DAO, as a decentralized autonomous organization, keeps running through smart contracts and encodes transactions and rules on the blockchain, to achieve open and fair, unattended and autonomous operation, but no legal entity.
The first fully functioning DAO is often considered Bitcoin, and in 2016 a German startup launched “The DAO”, a DAO organization based on the Ethereum blockchain platform, which raised to 150 million for Ethereum dollar funding.
However, due to the loopholes in the smart contract, the funds were transferred by hackers. This incident not only brought the end of “The Dao”, but also gave “The DAO” a profound lesson — the security of the DAO is very important, and a small code bug may result in huge losses.
02 What is the use in real life?
What is the role of distributed autonomous organizations in real life?
Avoid censorship in the first place and maximize resource utilization. Distributed autonomous organizations store everything in a decentralized storage network, which is open, transparent, and immutable. Anyone in the company can personally review the company’s activity rules, etc., at a glance, and resources can be dispatched in time when taking action, without time-consuming review.
Secondly, it can avoid marginalized employees and realize the innovation and development of the company. In traditional hierarchical management, it is difficult for leaders to collect opinions, so it is difficult for companies to understand the thoughts of lower-level employees. And people in distributed autonomous companies can put forward their opinions on the blockchain at any time and be seen by others, which reduces unnecessary procedures and realizes flat management, so that employee suggestions or opinions can be collected, thereby improving employee performance. work enthusiasm and creativity.
Finally, it can also improve the efficiency of work and the credibility of results. The characteristics of decentralization make some tedious processes in life easier. For example, when making some public decisions, to be fair and just, we will usually decide by voting, but whether it is paper or electronic voting requires a lot of energy, and it is difficult to avoid fraud.
The use of distributed ledgers will make every vote of the voter truly and openly recorded on the blockchain, without the need for people to count votes to generate election results, which are timely and credible. In 2016, the U.S. presidential election adopted blockchain technology.
So far, DAOs have been used for investment, charity, fundraising, borrowing, or buying NFTs.
However, due to this type of collaboration, there are also many drawbacks. For example, the flat structure is relatively decentralized and slow to operate. When there is disagreement in the community, many may form a major split. In many cases, the person with the most tokens in the organization has a higher right to speak, which violates its original idea.
03 Summary
At present, many DeFi has DAOs, and everyone decides the future direction through the votes in their hands. In the future, it is likely to become the next explosion point of the blockchain, changing the organizational form of human collaboration.
The rise of the decentralized financial DeFi outlet in 2020 has made DAO popular again. There are still many people exploring and advancing, and it is still worth looking forward to how it will develop in the future.
What do you think of this decentralized autonomous organization? Feel free to share your story in the comments section.
