The Future of DAOs and Large Corporations: Risks and Rewards 

The Decentralized Autonomous Organization (DAO) is a concept that has been gaining traction in recent years. DAOs are a form of direct democracy, allowing stakeholders to vote on decisions such as investments, purchases, and strategic goals.

The concept is built on Blockchain technology, which gives us the veil of what business will become in the foreseeable future.

My name is Yuriy Hotoviy, I am the co-founder of the DeXe Network ecosystem, and in this article, I will try to describe why large corporations should already look towards DAO, why this structure will inevitably become dominant in entrepreneurship, and what the risks are. Let's go!

Who will be first?

Some experts call DAO "a revolution in company management. We think DAO is an evolution. The next stage of entrepreneurship, which is built on openness, a community of consumers, and freedom of decision-making.

But at this point, DAO is still a concept for innovators. And mass implementation is yet to come. And here, everything will depend on the big companies - who will make this step first?

Perhaps Toyota, which is already looking at the implementation of DAO structures. Albeit partially. In any case, DAO has several advantages that change the game.

By utilizing blockchain technology, these organizations can increase transparency, reduce management costs, and create a high degree of trust amongst their stakeholders. So let's see how it works.

Decision-making has never been more transparent

Let's be honest: there's nothing worse than a board of directors. It's either a sham, where 1-2 people make the real decisions or 9 circles of hell with endless disputes. The DAO allows you to never again depend on decisions made at a narrow table.

The whole point of DAO is that it is collective ownership and responsibility. Only members of the community can make decisions by voting within a certain period of time. It is a true democracy, which requires posing a problem, creating options for answers, and voting collectively for a solution.

By allowing stakeholders to vote, organizations can make decisions transparently and effectively, without the need for lengthy deliberations. This helps ensure that organization resources are used efficiently, and that decisions are made with the best interests of all stakeholders in mind.

It is almost impossible to remove the hierarchy completely, but in the DAO it will become part of the social ranking. And it does make sense. Social rating should motivate project participants to be more active in developing and making decisions.

Ultimately, this may carry some danger - the emergence of  «key groups of one-thinkers». Something in the style of political parties or gangs.

But personally, we do not see this as a particular risk, because each such group will need to seek the support of the majority in any case. This means proposing the most appropriate solution to the problem.

But are big companies ready for this?

So far, for investors and key figures, the concept of DAO management looks like a bad dream. Losing control could change everything. For example, Apple could stop making the same phone for five years.

However, we believe this is what big business needs. If you introduce DAO not immediately to the "core" of management but start with some departments.

For example, to give DAO control of design structure, UX/UI, or software development. Your users will create the comfort of using your product.

It would allow you to choose the best coloring for the next Jeep SUV, or finally add the ability to edit tweets on Twitter. Only through voting.

It will also create tremendous trust and openness. That said, the company's internal decisions remain independent. If that's what you're so afraid of.

Cost reduction

Yes, yes, here is the most important thing. DAO will help your company reduce costs. Drastically. The arguments:

• Automation. DAO could help large corporations reduce overhead costs since the platform would allow them to automate processes and streamline operations. By allowing stakeholders to interact directly, without a centralized governing entity, organizations can cut costs associated with maintaining hierarchy and dealing with administrative paperwork.

  
  

• The recruitment system will also change. I'm afraid that HR specialists will have a hard time.

  Thanks to the introduction of the social rating system, only the community will decide where the project should go and who to appoint to the developer roles. We are unlikely to encounter 1000-odd positions that are hardly needed now. And it is unlikely that we will see the mass layoffs that all the world giants are cheering for now.

  
  

• DAO can help large companies become more secure and transparent. By using decentralized tools, companies can increase the transparency of their operations, thus eliminating the need for middlemen. This can reduce the overall costs of operations and ensure that all transactions are conducted in a secure manner.

And most importantly, safety

DAOs are designed to be highly secure since decentralized applications are not vulnerable to cyber-attacks and malicious actors, as long as the code is well-crafted and free from bugs. Furthermore, the data stored in a DAO is secure and immutable, meaning that it is difficult to tamper with or alter. As a result, a DAO can help an organization achieve its security goals more efficiently and cost-effectively.

A DAO can also be used to create smart contracts, which are digital agreements that are automatically executed and enforced when certain conditions are met. These can be used to automate many common business processes, such as payments, contracts, and data security policies. Smart contracts can provide a robust layer of security, as they can be programmed to execute certain actions if specified conditions are met and are difficult to hack.

But there is one big problem

The introduction of DAO in large companies has a number of problems and contradictions: how not to bury such a large community on the first day (and not to allow chaos to occur there), what to put under shared control and what not, and much more.

However, there is the most important reason. Big companies have too many secrets and commercial deceptions, which obviously the users will not like. We need to remember that in the era of a super-digital society, openness, transparency and honesty are the main trends in business. And companies should move towards these solutions.