Benefits of a DAO

DAO is growing in popularity in different areas from sports, arts, and finance to crowdfunding. There are several benefits that it offers, which might be the reason why groups, entities, and individuals would want to pursue the DAO structure. With that said, here are the major benefits of DAO

Decentralization

The basic design principles of DAOs are well aligned with the goal of achieving the highest level of decentralization. This essentially means collective participation while eliminating dependence on one or a few individuals. This helps give an equal amount of importance to every stakeholder and member to have their voice when it comes to the decisions made. However, DAOs are not completely decentralized as members who invest in more tokens have more voting privileges. Despite this, the voting power is still well-distributed which prevents power transfer to one or a few individuals.

Participation

DAOs, as a result of being as decentralized as possible, encourages more participation than most traditional organizations. When the members of an entity feel like they have fair voting rights, they feel more empowered to contribute. This is what drives the DAO stakeholders to use their tokens in ways that benefit the entity, cast their votes, and burn tokens.

Community

Decentralized Autonomous Organizations have great community involvement, which enables people from all over the world to connect with each other to work on goals. All it takes is an internet connection and DAO governance tokens to be able to enter the world of web3. Since the decision-making process is not limited to a group of authorities or the boardroom for DAOs, every member can contribute in ways that add to the productivity of the goals. And with this, there is more scope for innovative developments from the organization and its members.