Report on D.A.O

Decentralized Autonomous Organizations are supposed to be internet scale, rules based, co-ordination mechanisms.

Majority of DAOs are built as on-chain applications on the Ethereum blockchain. This follows from ETH has the most developers, robust tooling and standard templates for smart contracts. They inherit decentralization from the ETH blockchain and are atmost as decentralized as the underlying chain.

Depending on where the decentralization comes from, DAOs can be (in increasing order of decentralization)

Legacy applications modified to use some part of the decentralized stack
On-Chain applications that use the underlying blockchain for most of the heavy lifting
Fully P2P applications that broadcast state change and do all the processing at the end point. i.e. a localbitcoins version of a DAO localDAO 

(further explained in the deep-dive section.)

Depending on how value capture vs creation, ease of transaction and compliance with local laws are interpreted, DAOs can have one, two or no native tokens.

DAOs have the following sub-parts
1.Cap-Table Management
2. Automated contract execution system
3. Governance system
4. System of record
5. Project Management

At its highest aspiration a DAO is software eating the Nature of the Firm

Problems

1. Compliance -Unregistered Association, Unregistered security sales, Privacy vs Transacting with non KYC’d actors.
2. Misaligned Incentives- Voter apathy, Properly valuing contributions, speculation overthrowing usage.
3. Decentralization theater - control and decision making are centralized.
4. Re-Introduction of transaction costs - Ease of Use, Transaction fees, Systemic risks.

Predictions

1. DAOs move to higher layers, app based chains, shards
2. Legal suits brought against a misbehaving DAO
3. DAO wrappers for legal orgs, Legal Wrappers for DAOs
   4.Remote first companies, growth of digital nomadism will push the need for corporate structures managed like software. They will try to form DAOs

Opportunities
1.Better Voter services
2.Better decision making
3.Institutional voter services
4.DAOs on different substrates
5.Better User Interfaces
6.Standard templates for governance.

let me know what you think