Industry experts are forecasting major growth for decentralized autonomous organizations (DAOs). According to the blockchain data provider, DeepDAO, $11 billion is already being managed in their treasuries. Cryptocurrencies and blockchain technology have shaken the world of finance. The very nature of blockchain-based platforms makes them the perfect technology for financial institutions and other trusted parties to securely share data and confidential information.
Imran Khan, co-founder of the pre-seed crypto fund Volt Capital and founding member of Web3 accelerator Alliance, says that DAOs will have one trillion in AUM (assets under management) by 2032. This major boom and growth is taking place because DAOs provide an unparalleled value proposition which has peaked investor interest.
Blockchain technology is reaching its potential and investment in cryptocurrencies are flourishing. However, the opportunity cost is still troubling for some given the cryptocurrency and ICO investment risks still remain relatively high. DAOs present a silver lining as they are fueled by blockchain technology but with human government and management.
DAO investors do not have complete control over the organization. Instead, its members unanimously vote on major decisions. Everything from the next product line to what raw materials are being used to make products, these decisions are made together. This is contrastingly different to owning shares in a public company on the equity market.
One caveat is that, If the DAO does not generate a profit investors do not get their money back. This can happen if the DAO cryptocurrency is not successful or the type of DAO fails to peak market interest.
These next-gen start-ups are operating on new-age business models to push the business landscape forward but founders ultimately know the risks. “The challenges of Decentralized Autonomous Organizations can be complex and will likely continue for a while, simply because the concept of the DAO itself is so new and relatively unexplored,” explains Mark Homza, co-CEO and co-founder of full-service creative agency, Funday. Homza is also a co-founder of the world’s first Consumer Packaged Goods (CPG) DAO, gmgn supply co.
DAOs are now inspiring people across all industries to leverage the power of the crowd and use the DAO structure to create products and services in a new way. Filmmakers are turning towards the DAO structure to generate new, fresh ideas from their community. PizzaDAO is a revolutionary DAO made up of a global community of people who simply love pizza and think it should be free. There are new art DAO’s that buy and sell NFT’s popping up on the blockchain all the time. Superrare has over 8,000 members with nearly 259 million in their treasury. MoonDAO taking a new look at how we explore space. Its goal is to decentralize access to outer-space exploration and research. According to its website, it plans to send one of its members on a spaceflight in 2022 using the proceeds of their lottery Tickets To Space NFT collection. This sector gives VCs and investors wider commercial access to space and related investments. And in the consumer packaged goods space, gmgn supply co, is working to launch 100 CPG brands where its DAO members will be rewarded for participating. gmgn looks at their model as a way to revolutionize the CPG industry and drive the next generation of beloved brands.
There are no restrictions on who can invest in a DAO, which means a wide range of investors can get involved. If the DAO is successful, the ecosystem token could hold considerable value.
DAOs could be revolutionary and spur innovation and mass change to the way companies currently operate. They are in line to be the future of startups, but there is still a long way to go before we see DAOs used on a large scale.