How Is DAO Revolutionizing Traditional Business?

Introduction

What Exactly Is a Traditional DAO?

How does DAO disrupt traditional business?

Funding

  • DAOs link financial contributions to governance rights, allowing investors to become owners and employees.
  • DAOs are usually funded by tokens sold on open markets. Anyone who wants a stake in that organization can buy governance tokens to have a say in the project’s direction.
  • These token sales, in turn, help to fund a DAO’s treasury. Furthermore, a DAO treasury can lock funding into a multi-signature wallet to increase security and prevent any single member from withdrawing funds.
  • Moreover, DAO members are rewarded for keeping a project alive rather than making a quick buck.

Structure

  1. Traditional organizations frequently use a hierarchical structure to keep things running smoothly, allowing those at the top to make decisions that those at the bottom will implement.
  2. This tired top-down pyramid structure clearly defines each member’s or employee’s role, which is an efficient way to delegate responsibility across a large workforce.
  3. Despite its benefits, this model can be restrictive for various reasons. Idea communication tends to cascade from a small group to the majority.
  4. This can often reduce job satisfaction and prevent employees from aligning their goals with the companies. Furthermore, this model has the potential to stifle innovation and avoid collaboration.

Comparison between DAO & Traditional Organization

Comparison between DAO & Traditional Organization

Will DAOs eventually supplant traditional organizations?

Closing words

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