The new guide on DAO from the World Economic Forum aims to create basic guidelines to harness the potential of this sector of the blockchain industry and establish guidelines that minimize its risks.
The WEF has launched a new guide in collaboration with the Wharton Blockchain and Digital Asset Project with which it aims to provide the necessary tools for the constitution and management of DAOs, decentralized autonomous organizations based on blockchain.
La 38 page guide describes what DAOs are, how they are structured, what their advantages and challenges are, their governance frameworks and their legal structures. In addition to this, the WEF guide also outlines the need for formalization of DAOs, how these organizations fit or should fit into traditional legal frameworks, and their legal implications.
The WEF recognizes that DAOs are an emerging initiative in the blockchain industry that is revolutionizing traditional organizational structures and that represent an innovation for society. In the paper he noted that these blockchain-native organizations are driving a more equitable governance structure, which can help overcome several current barriers and shortcomings in traditional organizations.
However, the international organization also specifies that this type of decentralized and autonomous organization faces current risks that raise various questions about its stability.
WEF Recommendations for DAOs
According to the WEF, the main focus of DAOs is to manage and manage resources. In its guide, the international organization details that DAOs began to grow in popularity in the DeFi boom, since projects saw the need to become decentralized organizations to help manage resources and promote new mechanisms for taking of decisions collectively.
In 2021, DAO treasury went from $380 million to more than $16.000 billion, showing a growth of 4.000% in just one year. In addition, the number of participants and members of DAOs multiplied by 130 times, going from about 13.000 participants to more than 1,6 million that same year, highlighted the WEF.
Although, currently, the treasury managed by DAOs has decreased with the fall that the cryptocurrency market experienced in 2022, its influence in the blockchain world and in society continues to be important.
DAOs, a gateway to Web3
DAOs “attempt to reimagine how we connect, collaborate and create,” by reducing the need for trusted intermediaries and by distributing power among their members by promoting collective participation, the WEF said. But these autonomous organizations also face operational, technical, governance and legal challenges that justify the creation of general guidelines.
Through its new guide, the WEF wants to establish recommendations that allow DAOs to develop effective operational, legal and legal strategies to ensure their proper functioning.
Among these recommendations, the WEF highlights the importance of establishing voting processes that mitigate the risks of plutocracy and deciding whether to establish a legal legal structure to benefit from the legal frameworks of a given jurisdiction. The WEF also made recommendations focused on the organizational and operational scope of the DAOs.
It should be noted that many of the general recommendations mentioned by the WEF in its guide are already being implemented by DAOs to maintain their autonomous and decentralized nature. Furthermore, the same organization recognizes that These are only recommendations and not closed standards that must be complied with exhaustively..
Rather, with the publication of this guide, which follows previous ones where DAOs and DeFi have also been discussed, the WEF seeks to generate resources that help both developers, policy makers and other interested parties to effectively evaluate DAOs. , its transformative potential and its many opportunities.
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