DAOs vs DACs

In recent times, there’s been a rise in DAOs (Decentralized Autonomous Organization) and even if you don’t know what they are, we can’t decide we’ve seen that so many times within the web3 space. DAOs are best described as an organization or business where members vote for decisions to be taken. The decisions in the community are made according to the highest number of votes according to numbers.

In DAOs, there can exist board of directors or team members of the organization who have a huge level of influence on the organization.

Famously known, DAO membership can be gotten through;

— Token-based membership: most governance tokens are usually fully permissionless and can be traded on decentralized exchanges. They can also be gotten when liquidity is provided but nonetheless, holding the token gives you access to voting. Example is MKR token for MakerDAO which can be used for voting in the Maker protocol.

— Share-based membership: in this, proposals are submitted to be a part of the DAO and offer value in form of tributes like tokens and proof of work. Members can exit at any time with their equivalent of the treasury offered. Example is MolochDAO, DAOhaus, Meta Cartel

Then, there are DACs (Decentralized Autonomous Company) which sometimes are confused as DAOs too but not be confused. They aren’t the same. Maybe, in 2017 but not now.

Just like DAOs support the collection of votes to make decisions, DACs are “individual-centric” which means DAC Economy is part of a Self Sustainable Decentralized Economy. It expands beyond money and has a new conceptualization of value also known as the real value; the zero sum type and the generative type.

- the zero sum type: includes all money forms (crypto tokens inclusive) examples NFTs (even though we can create super NFTs that contain generative component)

- the generative type: is a type that has different mechanisms and dynamics different from money examples Oracles.

DISTINCTIONS BETWEEN DAOs and DACs

• DAOs are based on community/group vote to make decisions while DAC is an entity that supports day-to-day operations in large scale enterprises. Therefore, DACs support individuals making decisions for every position they are in and not a collective one based on voting.
• In DAOs, decisions can be influenced by a group of people holding the highest influence in the community. And this puts a futile effort to what the main aim of DAOs are, which is to get a collective true opinion within the organization or community. While in DACs , decisions are solely individualistic and not influenced by any group or person with the company.

In years to come, we are going to watch the concept of a Decentralized Autonomous Company (DAC) Economy grow into a wide system for large scale enterprises and day-to-day operations for organizations. With METIS identifying as a layer 2 protocol and DAC Economy driven protocol, we are sure to see improvement and more competition to boost the economy.