If you have been around for the past decade, you are pretty much aware of blockchain technology and how it has transformed economics and how people do business. The blockchain is the next phase in technological evolution. Though blockchain technology is great, it lacks a very important aspect, governance. This is where DAOs step in.
What is a DAO?
DAO stands for Decentralized Autonomous Organization.
Let's break it down a bit:
- Decentralized: means the organization has no central point of control, it is distributed to all stakeholders. This means there is no single point of failure as each stakeholder holds the entire organization in their computer. This makes it very safe and secure.
- Autonomous: This means the organization is self-governing and cannot be influenced by outside forces.
In summary, a DAO is an organization that is run by rules created by its members through a consensus process and these rules are encoded into a set of complex smart contracts run by computer software on the blockchain.
DAOs are truly phenomenal, they completely eliminate human input, (though I find this a bit scary), they are still just a concept and it is not yet possible to have a fully functioning DAO.
The closest thing to a DAO is a blockchain organization, like Etherium, EOS, etc. These organizations are great, but they lack a successful governance system. This is where DAOstack comes in.
Introducing DAOstack
DAOstack "is a platform for decentralized governance that enables collectives to self-organize around shared goals or values, easily and efficiently."
DAOstack brings the power of collaboration to the people. It is "designed to catalyze the future of collaboration."
The platform consist of these essential components:
- A modular set of complex smart contracts
- A javascript developer environment
- An intuitive user interface that allows users of any level to create or participate in a decentralized organization without the technical know-how.
The problems that DAOstack is attempting to solve are really complex and this is a very ambitious project that has never been attempted before. For this reason, the architects are not trying to offer a complete solution to decentralized governments, rather "solutions will emerge with time" and DAOstack is a sandbox for experimentation. Solutions for each organization will be mixed and matched accordingly, making it more like a Wordpress template.
The Approach
The Arc
It is the base layer of the stack. This is a library of smart contracts implemented on the Etherium blockchain that can be mixed and matched to meet the needs of each DAO that utilizes the DAOstack. This stack is mainly for developers since it's implemented in Solidity and will be used by developers to create solutions which anyone can use just like developers create Wordpress themes and templates.
The Arc.js
This is the stack for frontend developers who have no knowledge of solidity. It is a javascript library that will allow them to build apps on top of the Arc.
The Application Layer
This layer allows users who are not blockchain developers to interact with the stack using DAPPs created by the Arc and Arc.js
Alchemy
The first application being built on the stack is Alchemy, an intuitive user interface for budgeting and resource allocation for decentralized organizations. With Alchemy, anyone will be able to create a DAO in a few clicks, create an ERC20 crypto-token if desired, and invite others to participate in a hub of decision-making and talent-sharing.
Use Case
As a developer, I can imagine a scenario where a company needs to run a project with 2000 devs. The organization will need to plan on how they will manage the collaboration between these devs.
Each dev will not contribute the same value and this means the methods of compensation will have to be tailored to each developer according to the value they bring.
How much does Insculpt have to be paid and how, those are the decisions that will need to be made and the organization can use Alchemy to tailor these needs according to their specifications.
The DAOstack uses the holographic consensus
“There is a natural tension between scalability, the number of decisions a collective can make in a period of time, and resilience, the incorruptibility of those decisions. We resolve that tension with a new collective decision-making process, called Holographic Consensus, whereby small groups can make decisions on behalf of the larger majority in such a way that guarantees perfect alignment between the two.” — DAOstack architect Matan Field