Autonomy, Blockchain, Smart Contracts. These may all be buzzwords, but they are about to impact our lives, faster than some may have imagined.

With no boss, no CEO and no VP,  a Decentralized Autonomous Organization (DAO) is a flat organization with no hierarchy.

A DAO is a combination of computer code, a blockchain, smart contracts and for now people.

So without a boss, what happens when you consistently miss deadlines? Or, even more powerfully, let’s say you treat other team members disrespectfully?

The DAO token holders who voted on your contract simply withdraw their votes.

If your contract falls below a threshold, then you guessed it! You’re fired.

Since the DAO is organized around smart contracts and value and not people and roles, the flexibility and agility to innovate are greatly increased.

As a flat organization, the community can rally and “fund” the best ideas from anywhere, empowering and encouraging innovation.

Here’s how it works:

The founders of a DAO set up the basic governance rules of how it will work.

The DAO has stakeholders who own tokens that represent a share in the performance of the DAO. Essentially, what those stakeholders want is an increase in the value of their tokens as reflected by increased demand.

Instead of a board of directors or senior executives, the token holders (aka shareholders) of a DAO have the right to vote “yay” or “nay” on any and every proposal facing the organization.

There are some rules that a DAO institutes to make things as effective as possible, but that’s a post for another time.

The bottom line is that, in a DAO, instead of being hired as an employee, you are awarded a contract (or a contribution contract) on a project basis. The community members discuss and then the proposal is voted upon. Once it is passed, work can commence.

In a DAO world, you don’t have a boss. But what’s better is that underperformers and those who are a drag on the organization are removed much more quickly and efficiently.

Employee not doing the job well? Remove your support from their contract.

Employee treating others with disrespect? Remove your support from their contract.

What the DAO offers is the potential to not just develop better output and productivity, but also to create a better work experience for everyone else on the team.

The future of work?

Just like how the first websites that popped up didn’t give us a good picture of what would become of the Internet, we also don’t have a clear picture of the future of DAO because it is still in its early development. 

But that doesn’t mean they aren’t the seeds of something significant that connects to much larger trends worldwide.

It’s possible that, in the future, you’ll have 10 different contribution contracts to multiple DAOs, which, collectively, pay you more than a full-time job AND give you the flexibility to do more of what you love.

We’re excited to watch this evolve.