Pros and cons of DAOs

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The emergence of decentralized web has changed the method of building communities through the use of DAO.

DAOs are Decentralized Autonomous Organizations, already thats a mouth full but give me a minute, DAOs happen when a group of people with a common goal, Mission and Vision come together to achieve it in a decentralized way. We removed as many buzzwords as possible. A common meme definition is a group chat with a shared Crypto wallet. DAOs will change how we work and earn forever and we can see it happening already with multiple DAOs raising funding to build the future of work. 

Membership is by owing a token created by the community. This makes it possible to create a community where every members has right in the decision making pertaining to the organization without the need of a central governing body like CEO or whatever. This type of organization also helps to build a trustless community where members do not need to trust each other rather the code that are set as the community rule .

Despite it’s power in building a decentralized community a DAO also has it’s own benefits and downsides 

What are their pros (Benefits) 

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# decentralized 

No single entity or person owns a DAO , hence their is no Central authority.


# Transparent 

One of the purpose of DAO in finance is to guarantee a sustainable financing model for ventures. 

# Automated 

With the help of smart contract, once the rules are in place decisions are enforced automatically with no need for human input 

# Community based 

Unlike the traditional organisation decision-making is not restricted to only a group of people rather every members take part in the decision making process. 

 What are their cons (Downsides)

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As the community is growing larger it is not that rare for disagreements to appear which may cause splitting from one into two companies. 

#Flat structure 

One of the major cons is the making decisions is time-consuming and thus these organizations are slower for operation as there is no one controlling entity. 

#Legal risks

it is not clear how daos will be classified within the existing legal framework.

#Ignorant decision making 

DAO members may be unaware of the technical issues they are voting on.

Read more Pros and Cons of DAOs on a bit of an higher level: 

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