DAOs or Distributed Autonomous Organizations define the rules for coordinating a group of people in pursuit of a common goal.

Consider a group of people coming together with the goal of reducing pollution in their local area.

A DAO focuses and coordinates their efforts.

It provides a governance framework for how decisions will be made and by whom.

Software is used to track the rules, the members, and their contributions.

This provides transparency to all the members about who did what and why they received compensation.

The results are posted on a blockchain which keeps track of all activities, decisions, and results.

The rules are encoded into the form of Smart Contracts which respond to the actions of the members.

In our example, if a member picks up trash in the local area, then they receive tokens which are digital assets that give the member rights, access, or an asset of value.

If the members want more activities such as picking up trash they can vote to provide more tokens to those who do so. 

All members have access to the data as to what each member did and how many tokens they received.

DAOs are a good way to coordinate a group effort and compensate them fairly for their work.   

 

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

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