Where humans could fail, AI might succeed with DAOs

Because of human prejudice, DAOs may never be more than a fantasy. Without robots, DAOs are only a dream.

In a non-hierarchical structure, decentralised autonomous organisations (DAOs) encourage all members of a community to participate. DAOs have the potential to transform the way we think about labour, but their implementation is not without difficulties.

In some cases, the word “DAO” is used to refer to a system of software processes that manages and operates itself entirely autonomously, relying on people only as a last resort. Using automated scripts or smart contracts, a blockchain-based network can provide services like file storage and machine learning model training, while also advertising its products, renting out gear, and receiving payments. Every part of the company might be handled by the automated network, which may include code that would allow it to call in and pay a human accountant or lawyer if necessary.

DAOs can be thought as as a means to organise network software processes that may be regulated by humans, but where the overall network is controlled and steered in a decentralised manner without the usual corporate structures or administration of a corporation.

As a collective, a DAO is an alternative to typical corporate or non-profit structures, where members can be either people or AI agents and are often only known to each other by somewhat opaque-looking IDs like cryptocurrency wallet addresses.

Applications

Cryptocurrency’s decentralisation and community participation make the DAO model ideal for the crypto economy. Token holders in DAOs have the ability to vote on ideas, unlike in typical public companies, where tiny shareholders have no voice in management.

It is common for these open-sourced, decentralised groups to be highly active and participatory in discussions about the company vision, direction, and financials. This level of participation provides constant monitoring, eliminating single points of failure in organisations’ management, and cultivating bias-free decision-making, all of which are facilitated by this level of participation.

DAOs aren’t just for cryptocurrencies; they might be employed in any field where it’s advantageous for several people — or various software processes — to come together to pursue common objectives. Creating a DAO should become as simple as creating a Google Group as blockchain technology becomes more widely adopted.

DAOs demand a high level of understanding and involvement, which is why there are yet no successful examples of fully decentralised organisations. There are, however, some organisations that are adopting this paradigm and moving forward with their decentralisation efforts. Developer communities like Metacartel and Aragorn’s DAOs show that decentralisation is possible, and Compound is a promising illustration of how it can work out in the long run.

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Examples of single-purpose DAOs include the ConstitutionDAO (SPD), which has the sole purpose of obtaining the first copy of the United States Constitution. In spite of the experiment’s shortcomings, it was a success in raising awareness of distributed autonomous organisations (DAOs).

 

Prospects for the future

DAO projects have a bright future ahead of them. Decentralized Autonomous Organizations (DAOs) are becoming increasingly attractive business models for the gig economy, which means that freelancers can join and contribute to DAOs in a decentralised manner without relying on a central leadership structure.

AI DAOs, where a community of human participants votes for the AI agents who represent them in the DAO’s decision-making process, will be a particularly fascinating advancement of this business model. Collaborative AI agents are able to review and rank each other in this manner since they are working together in an unstructured style.

We should expect to see a lot more DAOs in the blockchain world start off with human-controlled software processes, but this is likely to change as AI and other technologies evolve.

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When AGIs (artificial general intelligences) begin to appear, the DAO structure will be the best organisational paradigm to use. DAOs are fundamentally and totally democratic, and they inherently encourage cooperation and collaboration between humans and AI, which helps to ensure ethical results for AGI.

Challenges in putting things into practise

Communities that participate in Delegated Autonomous Organizations (DAOs) will help this concept take off. However, there are still a few hurdles to clear before DAOs become commonplace.

Decentralized non-hierarchical firm structures have been existing for more than a century, and there are numerous examples of decentralised community decision-making procedures in the world.

In this case, we have the technology to make it happen plus a system of incentives that encourages everyone to participate.

If a DAO is set up in a manner where no one or a small group of people can be held legally accountable for what the DAO does, then this is the main problem with the DAO. In a company without a CEO or board of directors, the only people who can be traced and identified are the people who cast their votes.

DAOs are becoming increasingly appealing to organisations that foresee a future in which every member of the community has an equal opportunity to have a say. DAOs are poised to have a positive impact on the future of labour, but there are still a few roadblocks to be solved before this model gains traction.

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