Have you ever heard the word DAO? DAO stands for Decentralized Autonomouse Organization. Decentralized autonomous organizations have no leadership and manage decision making and financial management transparently and democratically with blockchain technology.
People in the DAO don't have to trust each other. This is because all decision-making processes and transactions are disclosed on the blockchain, and information that no one can manipulate in the first place is shared with anyone. There's no one in the world to trust, however, in DAO, the system means trust.
DAO can be a group with the same different interests or a group of PFP project holders. They share funny memes and photos, and they share stories, but they go beyond mere friendship and fairly distribute profits and benefits within a decentralized system. If you look at the type of DAO, it will be easier to understand what it means.
Types of DAO
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Finance and Investment
Finance and DAO build a decentralized financial system. Without banks or intermediaries, DAO takes the initiative in the supply and demand of capital. In a centralized real economy, there are institutions that fluctuate interest rates, but in financial DAO, you can experience making your own coins, exchanging them freely, and becoming a financial agent. The same goes for investment. For example, thousands of people, tens of thousands of people, enough to buy an NBA team, people are able to do businesses that only a few capitalists could do. DAO participants can take the initiative and speak and maintain fully democratized investment activities.
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Social Media
Traditional media is maintained in a way that advertisers pay for advertising. Media DAO makes creators or groups that are close to the media they are pursuing have economic power. Furthermore, it becomes a social media DAO and builds a large playground for DAO without being subordinated to advertising, targeting independently decentralized social media rather than servers owned by large companies.
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Collector and Entertainment
There is also DAO in the form of cultural membership. Many people raise money to buy digital ownership of scarce cultural properties, and each member owns a fair share. Entertainment DAO can develop the story of content such as books, movies, dramas, and games through its own governance (speech/voting rights) granted within the DAO.
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Governance
Governance is called "public management," a system in which many people in the DAO make mutual decisions, and it is an integral part of the DAO: a device that enables all stakeholders to feel responsible and make transparent decisions to achieve common goals. Types of governance include dividend tokens, voting rights, and speaking rights issued by DAO. Usually, it is given as a reward for DAO's activities, or in PFP projects, there are also governance benefits such as holders and whitelists.
COMMNUNITY vs DAO
Our common community and DAO are very different in nature. A community created by people interested in NFT cannot be called a DAO. No matter how democratic the motto is to operate, the operators and staff who run the community move in a vertical, centralized system. As mentioned before, DAO is an organization that exists on blockchain technology, and everyone acts as a leader and member of DAO.
DAO precautions
There are many views that do not acknowledge DAO. DAO is primarily designed on an Ethereum-based blockchain, but if data uploaded through the Ethereum network is eventually stored on Amazon's AWS, it can't be 100% decentralized yet.