Decentralized autonomous organization:: it's benefits, purposes and disadvantages. by beauty197

hive-167922 · @beauty197 · Aug 9 '23 (edited)

$12.34

Decentralized autonomous organization:: it's benefits, purposes and disadvantages.

[Decentralized autonomous organization](https://leofinance.io/@leoglossary/leoglossary-decentralized-autonomous-organization-dao) is a legal structure or entity that is decentralized and operates through code or smart contracts on a [blockchain](https://leofinance.io/@leoglossary/blockchain),  because this entity is decentralized if they have the opportunity to make decision without the need of any intermediaries and because it is based on the blockchain participants can vote to proposals they can make collective decisions and they can also allocate resources.
It can also be called decentralized autonomous cooperation

https://images.ecency.com/DQmTnQNagQSpqqjNg3MqbJ8cJv3hieSAntmkkGSXitsqM3j/addtext_08_08_09.23.38.jpg[Edited from pixabay](https://pixabay.com/photos/web3-nft-blockchain-world-universe-7637962/)

.

Decentralized autonomous organisation is used to manage funds governing protocols and organize community driving initiatives.

#### Features of DAO's.
Tho partly discuss shed more light on how decentralized autonomous observation works in a larger scale.

*[DECENTRALIZED](https://leofinance.io/@leoglossary/leoglossary-decentralization) [GOVERNANCE](https://leofinance.io/@leoglossary/leoglossary-governance)*

People who are part of decentralized autonomous organisation are known as token holders and they have stake in the organisation and this gives them the right to influence any decision being made they also have the opportunity to vote proposals and this depend on the amount of token they have in the community.

*[TRANSPARENCY](https://leofinance.io/@leoglossary/leoglossary-transparency) AND [SECURITY](https://leofinance.io/@leoglossary/leoglossary-security)*
Transactions carried out in decentralized autonomous organisations are recorded if there is any change indecision they have been recorded and once recorded in a block chain no one can change or alter such decision this promotes Trust among the participants and draws more interested people in in the organisation.

*PROPOSALS*
Any member decentralized autonomous organisation has the right to come up with a proposal and token holder us who support such proposal and if such member get a tangible amount of support the proposal will be granted.

Another good feature of decentralized autonomous  organisation is that it can be accessed from any part of the world as far as you are connected to internet, example is hive blockchain hive blockchain allows global participation that is why people from every part of the world can join hive once you're connected to internet.

Decentralized autonomous organisation always reward people who join in the oppositional proposals and they also encourage people who participated and this helps to enhance engagement in the community.

*[SMART CONTRACTS](https://leofinance.io/@leoglossary/leoglossary-smart-contract)*
Yes decentralized autonomous organisation uses  Smart contracts to enforce or automate rules in the organisation and all participants will follow such rules.

#### TYPES OF DECENTRALIZED AUTONOMOUS ORGANISATIONS.
There are different types of decentralized autonomous organization:
*  There is the entertainment decentralized autonomous organization.
* There is  the media decentralized autonomous organization.
* The grants decentralized autonomous organization.
 * There is also social decentralized autonomous organization.
Lets also see some other DAO's and how they work.

*SERVICE DAO'S*
They mainly focus in some service like content creation software development freelancing and they also reward all participants.

*BLOCKCHAIN-BASED DAO's*
This one only operates on the blockchain platform using Smart contracts to manage all decision-making and also managing fund allocations.

*GOVERNANCE DAO's*
They are basically artificial bacon and they foresee how the opposition handles each projects that comes up, there are also collective decentralized autonomous organization which have the intention of gathering people to collaborate on a project and also share resources and work together to achieve a particular goal.

INVESTMENT DAO's works on  encouraging people participants to invest the cryptocurrency stocks and real estate, there is also NFTs DAO's that focuses on non-fungible token that are used to create trading and curate digital art.

#### BENEFITS OF DECENTRALIZED AUTONOMOUS ORGANISATION.
Because decentralized autonomous opposition can be created on an aragon network with a little amount of ethereum and also it offers transparency and automated efficiency there will be many benefits  that comes with it.

One of those benefits is that decentralized autonomous organisation gives opportunity for different people in different part of the world to come together and achieve a particular and motive, an example is the ongoing Leofinance DHF proposal what is needed is support from people from different part of the world we are working together to reach our target and achieve our goal for the project so it can be said that decentralized autonomous organisation is all about community involvement as far as you are connected to the internet wherever you are you can be a participant.

Another benefit is that all votes  can be seen by the token holder and the earner, so everything on decentralized autonomous organisation is public and this is an advantage.

DAO's authorizes participants to govern and manage resources collaboratively thereby supporting blockchain technology for trust and efficiency.

#### Disadvantages of DAO's
There are some few drawbacks in DAO's, because decisions are made by token holders it requires much time before a proposal is granted, also because DAO's is decentralized token holders can decide to withdraw their assets at any point in time and this will result to massive setback of the community.

Lastly fixing of bugs of codes in DAO's is always difficult because once a code is posted it is very difficult to alter it so to fixing bugs requires rewriting of the code.

#### Conclusion
The fact that DAO's is accessible by anyone in any part of the world interests me most, and also the transparency and security makes it more interesting.

What again do you love about DAO's?

[Reference](https://www.investopedia.com/tech/what-dao/)


Posted Using [LeoFinance Alpha](https://leofinance.io/@beauty197/decentralized-autonomous-organization-its-benefits-purposes-and-disadvantages-)

Posted Using [LeoFinance Alpha](https://leofinance.io/@beauty197/decentralized-autonomous-organization-its-benefits-purposes-and-disadvantages-)

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