The Evolution of DAOs

Decentralized autonomous organizations (DAOs) have revolutionized the way organizations form and operate, moving from theory to action within the blockchain ecosystem. Cointelegraph Research’s report, “DAO: The Evolution of Organization,” dives deep into this transformation, documenting the rise of DAOs and their significance today.

Understanding the Three Eras of DAOs

The report categorizes DAOs into three distinct eras:

• DAO 1.0: This era of analog DAOs lacked the technology required for effective governance and interaction, beginning in the 1950s and culminating in the term’s coining in 1997.
• DAO 2.0: Marked by the advent of on-chain governance, exemplified by Dash in 2015. This era saw the integration of blockchain technology.
• DAO 3.0: The current era, characterized by the rise of tools and infrastructure supporting the establishment and operation of DAOs.

Current Landscape and Metrics

With approximately 4,000 active DAOs today, they span various sectors:

• Decentralized Finance (DeFi): 40%
• Social and Political Causes: 15%
• Tokenized Physical Assets: 26%
• Infrastructure and Tooling: 14%

To DAO or Not to DAO?

Investors often question whether holding DAO tokens is more beneficial than staking coins from layer-1 blockchains. Historical data shows that during high market sentiment, DAO tokens frequently outperformed Ether (ETH), although CAKE from PancakeSwap uniquely retained positive growth through market fluctuations. This behavior demonstrates that DAO tokens might react more aggressively to bullish and bearish conditions.

Case Studies and Lessons

The research also presents case studies, including OlympusDAO, Coinshift, and the infamous hack of The DAO in 2016, which led to a significant loss and the bifurcation of Ethereum into two networks: Ethereum and Ethereum Classic. These examples provide critical insights into the functioning and governance of DAOs and highlight potential futures as they progress into the 4.0 era.

Expert Insights

Cointelegraph’s Research department, comprising experts from finance, economics, and technology, aims to provide accurate and insightful information on DAOs and their impact on the ecosystem. The work of Demelza Hays, Ph.D., and the team is focused on delivering premier reports that can guide stakeholders in this evolving landscape.