Now that we’ve looked into how DAOs actually operate, it is important to understand how they can apply in our lives. DAOs are still in their very early stages, but it is important to understand how they are going to make an impact in our lives. So far DAOs have undergone three stages:
The first DAO, called “The DAO”, was released as a venture capital fund in which anyone could participate through the purchase of tokens. It has no conventional management structure and was controlled by the holders of the tokens. This became one of the largest crowdfunding events in history. This initial DAO showed promise until someone found an exploit in the code which allowed them to siphon off 1/3rd of the money into a separate account damaging the DAO’s reputation.
In the years following the 2016 hack, developers have created a wide variety of DAO projects. Different types of DAOs were created to achieve a wide variety of objectives. Fundraising DAOs became more popular and started to become common with the Blockchain community because it allowed groups to easily raise money while still having control over where the money went. Entire companies were founded as DAO, using governance tokens to increase productivity and offer a voice to more than just the executives. Some DAOs even started popping up to be run as a community 👀
With the recent rise in popularity from crypto, NFTs, and DeFi, DAOs are following in suit. The market for DAOs has increased dramatically with the influx on people learning about this space. Thousands of DAOs are now achieving to try a variety of different objectives with some making major headlines. Soon enough, DAOs will be a common form of corporation which could prove to compete against the current model.
One major example of how DAOs can provide quick fundraising to people in need. With the recent invasion of Ukraine by Russia, millions of Ukrainians have been displaced and Ukraine desperately needs weapons to fight with. Several efforts to receive funding from typical crowdsourcing sources like Go Fund Me have failed with the company even removing some campaigns from their site. Through Ukraine DAO and other direct crypto donations, Ukraine has received almost 100 million in donations.
Another massive fundraising effort was from Constitution DAO, a DAO created in an attempt to purchase the Constitution. This started out as a meme, but people on the internet saw this as an idea with potential and soon enough it became a real effort. This was an incredible example of a fundraising DAO which managed to raise 47 million to purchase the Constitution. Unfortunately, they were outbid by Ken Griffin, the billionaire CEO of Citadel, a major hedge fund, but this DAO set a precedent as to what could be achieved using DAOs. This has set the stage for other ambitious projects. One notable on being an attempt to raise 4 billion dollars to purchase the Denver Broncos and have them operated as a DAO.