Siri what's a DAO sorry i didn't quite get that welcome back to coin market cap my name
is Jessica and here at clean market cap we love bringing new videos about all things crypto from
market moves to updates and relevant news topics that you should have on your radar
we're going to jump straight in and talk about the topic of decentralized autonomous organizations
basics out of the way encrypt to the term doubt it floats around a lot many of us not in agreement
but do you actually know what a DAO is DAO stands for decentralized autonomous organization
okay that part makes sense but why are they needed and how could they ever compete with a traditional
business structure well you're all familiar with one if not the first DAO, any ideas what it could
be well actually bitcoin is generally considered to be the first fully working DAO because it's a
fully running operational protocol without the need for one person or a collective to
keep it running it's been over 10 years and bitcoin continues to function autonomously
to understand DAOs first you need to understand the technology that's behind them
DAOs rely on smart contracts which are collections of code that run on the blockchain and blockchain
technology itself now if you think of a company that you work for now in a traditional structure
there's typically a hierarchy that looks something like a pyramid there's a board of directors
executives or upper management and these are the key decision makers and those at the bottom of
the pyramid really don't have much power to make changes or to propose new ideas if you
compare that with a DAO the rules and governance of each dial are coded in smart contracts on the
blockchain and those rules cannot be changed unless voted on by the DAO members so instead
of having a select few of the majority say members of each style can also vote on decisions together
so what happens when you start or when you join a DAO well when starting a doubt the DAO rules
are built by a core team of community members through the use of smart contracts and these smart
contracts layout the framework from which the dial is to operate these are visible verifiable
and perfectly auditable so anyone can fully understand how the dial works and when joining
it out you agree to the code that's in place it isn't easy to change the code and it typically
requires votes between all the members and to obtain voting power or membership in a DAO
you typically need to buy or a given governance tokens which are cryptocurrencies or digital
assets tied to a certain project think of these as tokens or voting chips that really enable you
to vote on key decisions that could take place inside the DAO and how could this improve the
current business model well i'm going to let Colin Pape CEO of pre-search explain with uh most of
today's centralized big tech platforms they are making all these decisions behind closed doors
so you can think that they're uh in some type of uh you know board room and they're saying hey this
is how we think it should be for these people here are the you know two options that they get
versus the decentralized model it's not a board room it's more like a town hall and so you have
people that are there if somebody has a good idea it doesn't really matter who they are
uh it doesn't matter what their background is or what their qualification is if they're willing to
raise their hand and say hey have we thought about this then they can participate in the
process and help to shape the the nature of the service and how it works and what that provides
is kind of the ability for people to have some type of influence and to have multiple different
ways that you can do something rather than one that kind of gets sent down to you it's
an opportunity for people to say hey what about this it's a better way to do it and if it is and
other people within the community say hey that's a great idea then that idea rises to the top
so it seems like it's a modern and streamlined approach to operating a business what's the catch
the problem is that those using dials do risk running into legal issues and all of the laws
around businesses and their corporate structures really are not made to fit into the decentralized
organizations because until recently DAOs well they just didn't exist given the size of some
DAOs or the fact there isn't one clear ceo or founder it makes it really difficult to hold
accountability if things do go wrong there's been a really big debate on just how to protect those
that use DAOs and also regulations surrounding DAOs they're still unfolding each style is
structured a little differently but many dials fall into one of around seven categories and i'm
gonna run through them all for you now starting off there's DAO operating systems now this is the
starting block for a DAO ecosystem they offer the resources for people to start their own
DAO next up we have grant dials and these were the first real use case for DAOs this act is a
form of venture capital funds communities can donate funds and also use DAOs to vote on how
the capital is allocated to various contributors in the form of governance proposals one of the
most common is protocol dials and protocol dials really give the voting power back to the community
these tokens are used to vote on and also implement changes of course we have investment
dials and investment dials allow members to pull capital and also invest in projects at the early
stages although these do come with some more legal restrictions than your typical vc fund next up we
have social dials and these are really the natural evolution of group chats where friends can become
co-workers and really interact on a decentralized platform there are service dials which are used
to create decentralized working groups for individuals and also talent agencies so as more
and more blockchain companies come into the market this helps bridge the gap between the talents and
the communities collector dials really came into play in this year as the NFTs took off these
styles work with NFTs or artists and platforms to make sure which NFTs have long term value next
up and one of my personal favorites we have media DAOs media dolls incentivize content creators and
consumers and both give them a reward ecosystem they also share an open agenda of decentralized
news aggregated ally is a big list but all dials do have one common interest and that is to ensure
the important notions are discussed proposed and implemented with all of the community's
best wishes just because there is some uncertainty around regulation it doesn't mean the industry
isn't moving ahead at lightning speed deep DAO a DAO metric site reports there's currently 12.8
billion dollars locked in DAOs and 1.7 million adult members the biggest DAO is currently a
uni swap which is a decentralized finance platform you might have heard of it before it has over 275
000 members and the USD value according to deep DAO is currently 2.9 billion the uni
swap token which is currently the 20th biggest in market cap if you go on queen market cap and
such styles there's hundreds of tokens linked to this autonomous business model so people in crypto
we're clearly investing in DAOs but are we seeing some real world progress well in July of 2021
Shapeshift exchange made the announcement it was moving decentralized control of the organization
would now be shared among holders of Shapeshift digital token that means employees investors and
even customers and the former found out rewards would only hold five percent of the company's
digital fox token as soon as the news came out the price of shape Shapeshift's fox token jumped from
29 cents all the way to 89 cents and now currently stands at just under one us dollar per token in
the exact same month Wyoming became the first u.s state to legally recognize doubt and also grant
them the same right as a limited liability company and just a few months later blocks made history
as the first Wyoming DAO llc with plans to run out services in the state but also throughout
the world showing that dials were expanding so if you're looking to invest in a company
or even work for a company DAOs could be a better solution for you billionaire investor mark cuban
has also said that he sees huge value endows he said the future of corporations could be really
different as dolls take on legacy businesses but i now want to ask you what do you guys think would
you invest in a DAOs even work for DAO let me know in the comments and as always if you do
have any more questions you can always ask Alex in the description box below see you all very soon