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Benefits of Running a DAO

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DAOs, which stands for Decentralized Autonomous Organizations, have emerged as a novel approach to company organization and operations. They are essentially organizations that utilize smart contracts on a blockchain for decentralized decision-making and ownership. This new approach to company organization has gained popularity in the finance world.

DAOs offer a decentralized alternative to traditional intermediaries like banks or venture capitalists. By enabling direct investment and participation from individuals, DAOs create a more democratic and inclusive system that eliminates the need for intermediaries.

Transparency and accountability are valuable aspects of DAOs. As all transactions and decisions are recorded on a public blockchain, members of the DAO have the ability to easily monitor and audit the organization's activities.

DAOs provide a unique way to encourage active participation and contribution from members. By utilizing tokens, DAOs can offer incentives and benefits to members who work towards the success of the organization, creating a system where everyone is incentivized to work towards common goals.

DAOs have the potential to revolutionize the traditional finance world by providing a more democratic and inclusive alternative. Instead of relying on a select group of individuals to make decisions, DAOs offer direct participation and decision-making power to all members, thereby creating a more equitable system.

DAOs provide an alternative fundraising and investment method that does not rely on traditional banking or venture capital systems. This direct investment from individuals creates a more decentralized and democratic system, offering a new way to fundraise and invest in projects.

The emergence of DAOs has the potential to disrupt traditional finance by providing a more inclusive and democratic alternative. As technology and infrastructure continue to develop, we can expect more companies and organizations to adopt this decentralized model of decision-making and ownership.

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The main reason why most DAOs fail is the issue of real management. You either end up with a very centralised distribution of votes and this way it's not better than a traditional corporation including the risks of managing guys to be prosecuted. Or you will have a very distributed network of token holders, however in this case only a small percentage of holders will be actually voters so it will be very easy to coerce the DAO to do some weird stuff and the founding members will probably loose interest and abandon the project (ochlocracy in its worst) .
 
The main reason why most DAOs fail is the issue of real management. You either end up with a very centralised distribution of votes and this way it's not better than a traditional corporation including the risks of managing guys to be prosecuted. Or you will have a very distributed network of token holders, however in this case only a small percentage of holders will be actually voters so it will be very easy to coerce the DAO to do some weird stuff and the founding members will probably loose interest and abandon the project (ochlocracy in its worst) .

There are different use cases for DAOs. For example, it can also be a private DAO that is equivalent to partnerships in the traditional finance world.
 
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There are different use cases for DAOs. For example, it can also be a private DAO that is equivalent to partnerships in the traditional finance world.
Private DAO is equal to a ordinary corporation. Yes, there will be no "country of incorporation" and the shareholders register will be onchain, but that is basically the only major difference. If something goes sideways the shareholders might be sued in their countries or in the countries of the accuser, and DAO will not give any protection layer, not like LLC.

LLC and similar structures were created to limit the risks for the founders, investors and clients, DAOs only multiply those risks (adding technical issues like lost access to the voting tokens or hacks for instance) with little to offer instead.

Long story short - if things go sideways, DAOs offer less protection for the founders, customers and investors. If things go as planned - DAOs can add some value, but IMHO it's much better to start as a corporation, build a real community, achieve business success and only then consider converting it into DAO or non-profit or whatever.
 
Private DAO is equal to a ordinary corporation. Yes, there will be no "country of incorporation" and the shareholders register will be onchain, but that is basically the only major difference. If something goes sideways the shareholders might be sued in their countries or in the countries of the accuser, and DAO will not give any protection layer, not like LLC.

LLC and similar structures were created to limit the risks for the founders, investors and clients, DAOs only multiply those risks (adding technical issues like lost access to the voting tokens or hacks for instance) with little to offer instead.

Long story short - if things go sideways, DAOs offer less protection for the founders, customers and investors. If things go as planned - DAOs can add some value, but IMHO it's much better to start as a corporation, build a real community, achieve business success and only then consider converting it into DAO or non-profit or whatever.

For DAO to be recognized legally (for example, if you need banking access), such DAO would have to be attached to a legal entity.

So in reality, all participants are protected just the same as they would be protected by legal entities, such as partnerships.
 
I will just leave this here
https://www.sec.gov/news/press-release/2017-131
Regulators (and the courts) will see DAOs and unregistered partnerships with all the legal risks for the founders and managers and zero protection on the corporate level. DAO and banking? The whole idea of decentralised finance is not to rely on centralised banking :)

you are confused. I understand what means legally recognized DAO, and I have experience with it. It's kind of a mix/bridge between tradfi and defi. Both can be legally recognized and there are different use-cases for that.
 
I'm not a lawyer, so I don't pretend to know everything.
However I did rub shoulders with many crypto guys in 2017 and later and few of them ended up prosecuted and paid huge settlements. Saying "it was decentralised community" didn't help whatsoever, they were the guys pushing the buttons and the judges saw it clearly.

My point is that DAOs don't add enough value on the early stages of the project life instead creating extra risks, adding uncertainty and significantly limiting the operations (no or difficult to get banking, bad reputation of the whole industry, etc). If you are from traditional industry - stay away from DAOs, go corporate. If you are from crypto - yes, it might work for you.
 
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I'm not a lawyer, so I don't pretend to know everything.
However I did rub shoulders with many crypto guys in 2017 and later and few of them ended up prosecuted and paid huge settlements. Saying "it was decentralised community" didn't help whatsoever, they were the guys pushing the buttons and the judges saw it clearly.

My point is that DAOs don't add enough value on the early stages of the project life instead creating extra risks, adding uncertainty and significantly limiting the operations (no or difficult to get banking, bad reputation of the whole industry, etc). If you are from traditional industry - stay away from DAOs, go corporate. If you are from crypto - yes, it might work for you.

Yes exactly, it is IMPORTANT to properly structure it so it would align with requirements in traditional finance. Otherwise, it is a yolo. It is also important to emphasize what activities DAO does. If it's dealing with 3rd party money, then you may need to acquire an appropriate license, provide KYC, and things like that.
 
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Please correct me if I am mistaken but aren't the only countries that allow for DAOs to be registered the Marshall Islands and Wyoming (US)?
And besides, the person who registers the DAO will still be in the books as the main person to contact in case something goes wrong, so (AFAIK) there won't be any protection regarding the DAO being an entity owned by all the token holders of the DAO, and you will likely get in trouble sooner or later.

P.S. the text on your website seems to be AI generated (hence reads a little unprofessional).
 
Please correct me if I am mistaken but aren't the only countries that allow for DAOs to be registered the Marshall Islands and Wyoming (US)?
And besides, the person who registers the DAO will still be in the books as the main person to contact in case something goes wrong, so (AFAIK) there won't be any protection regarding the DAO being an entity owned by all the token holders of the DAO, and you will likely get in trouble sooner or later.

P.S. the text on your website seems to be AI generated (hence reads a little unprofessional).

Nope, such DAOs can be attached to a legal entity in any jurisdiction when structured properly. For example, even in the EU and this way you would have an option for EU banking. That's just one example.
p.s. yes, AI helped me to shape my words due to me being not a native English speaker. It's like an instant copywriter who fixes all mistakes and styling errors. Welcome to a new era!
 
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DAO's are scams.Theoraticly BS which are not working because of human greed and scammers.
Also its very easy to take control.
Best example first Decentralized exchange and DPOS/DAO ever bitshares.
Never ending fight of control and scams and in the end a single programer taking control over the whole voting system via a hidden code added in a node update.

Also a major problem no regulations which makes it possible to buy votes using incentives which makes the whole DOA system irrelevant and corrupt.Perfect systems for scammers.


These are real life experience and not theoratical bulls**t

However I did rub shoulders with many crypto guys in 2017 and later and few of them ended up prosecuted and paid huge settlements. Saying "it was decentralised community" didn't help whatsoever, they were the guys pushing the buttons and the judges saw it clearly.
US made is very clear if there is no legal entity but "decentralized" the people who make it possible running it like node runner/witnesses and programer will be held responsible.
 
DAO's are scams.Theoraticly BS which are not working because of human greed and scammers.
Also its very easy to take control.
Best example first Decentralized exchange and DPOS/DAO ever bitshares.
Never ending fight of control and scams and in the end a single programer taking control over the whole voting system via a hidden code added in a node update.

Also a major problem no regulations which makes it possible to buy votes using incentives which makes the whole DOA system irrelevant.


These are real life experience and not theoratical bulls**t

You are probably used to seeing DAOs that are created to raise funds or are some form of financial vehicle.

There are so many use cases for DAO! it's not only about fundraising. It can be a private cooperative, friends union, family office, you name it! And when it is properly structured (with actual knowledge and not a random yolo), there are zero problems with the regulators, because it can fully align with the law. And to add to your last sentence - yes, there are real-life experiences and examples, also developed by me.
 
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Yes exactly, it is IMPORTANT to properly structure it so it would align with requirements in traditional finance. Otherwise, it is a yolo. It is also important to emphasize what activities DAO does. If it's dealing with 3rd party money, then you would also need to acquire an appropriate license, provide KYC, and things like that.
A real autonomous DAO can't fullfill legal structur.Once you got the legal structur its not autonomous anymore.
 
You are probably used to seeing DAOs that are created to raise funds or are some form of financial vehicle.

There are so many use cases for DAO! it's not only about fundraising. It can be a private cooperative, friends union, family office, you name it! And when it is properly structured (with actual knowledge and not a random yolo), there are zero problems with the regulators, because it can fully align with the law. And to add to your last sentence - yes, there are real-life experiences and examples, also developed by me.
I was one of the leader of the biggest DAO's so i know what i'm talking about.
There is no DAO which is secure or which would be still a DAO and legal under US law.
 
It is becoming a gimmick of conversation now. as I mentioned, it has multiple use cases.
no you are just repeating the nonsense these idiots are writing about daos to blend people.

show me one bigger dao which succeeded in the long run

you are absolutely wrong, my friend. I have a friend who created first legally recognized DAO in US.
You are capable to read ?
The DAO i was leading was CMC #4 .It started 2013 and is still running.
Your friend had a bigger DAO ?

you are absolutely wrong, my friend. I have a friend who created first legally recognized DAO in US.
Then its by its orgin defention not a DAO anymore.
 
no you are just repeating the nonsense these idiots are writing about daos to blend people.

show me one bigger dao which succeeded in the long run


You are capable to read ?
The DAO i was leading was CMC #4 .It started 2013 and is still running.
Your friend had a bigger DAO ?

ok, giving you one example: Governor DAO Becomes First Legally Recognized DAO - ArticleCity.com
 
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