The Rise of Public Blockchain Unicorns: Rethinking DAO Governance for Enterprise Adoption

Despite these challenges, DAOs possess significant potential for public and private entities. Their inherent transparency eliminates single points of failure, ensuring projects can continue even if key individuals depart, as the DAO is a collective of multiple individuals and companies. This, coupled with their agile and collaborative nature, makes DAOs worth considering for enterprise alliances and non-profit organisations.

DAO can be considered for:

• New research & development centres: DAOs excel at fostering collaboration and ownership among geographically dispersed groups. Imagine a Silicon Valley unicorn setting up its first R&D centre. A DAO could connect engineers worldwide, with everyone contributing expertise and voting on research directions. This transparent structure incentivises participation, distributes project ownership fairly, and eliminates potential biases in funding allocation.
• Innovation-focused organisations driven by agility and rapid iteration: Traditional governance structures can be slow and cumbersome. Multi-layered approvals, committee meetings, and complex decision-making processes can stifle innovation and hinder adaptation to changing market conditions.

Benefits of a DAO structure include:

• Enhanced trust and transparency: By placing decision-making power in the hands of the community, DAOs foster trust and eliminate potential conflicts of interest. In the R&D centre example, engineers can be confident that funding allocation is based on merit, not personal agendas as decisions are documented and made public. In addition, if funds are distributed via public blockchains, the use of funds is immutable and transparent to all stakeholders.
• Access to a wider talent pool: DAOs are not limited by geographical constraints. They can attract and incentivise participation from the best minds and companies globally, enriching the project with diverse perspectives and expertise. Furthermore, DAOs avoid creating employer-employee relationships and allow companies to reduce dissolution costs if the project doesn't succeed.
• Reduced overhead costs: Traditional R&D centres can incur high setup costs due to new entity creation and administrative burdens. DAOs, on the other hand, channel capital towards research directly. In the R&D centre case, capital should be allocated to actionable research that will lead to future growth rather than additional overhead. DAOs use programmable mechanisms to distribute capital based on agreed milestones, ensuring efficient resource allocation.
• Faster decision-making and innovation: Streamlined governance processes in DAOs allow for quicker decision-making compared to traditional hierarchical structures. Through on-chain voting, proposals, and votes are recorded and executed directly, eliminating the need for manual vote counting and verification. This fosters agility and rapid iteration, pivotal for projects operating in fast-paced environments.