Exploring the Trend of DAOs in Non-Profit Causes
Decentralised autonomous organisations (DAOs) are versatile, with plenty forming over the years to accomplish various purposes. These include crowdfunding dapps, investing in NFTs, and acting as a community for specific interests.
More recently, DAOs have been set up for philanthropic purposes too. One example is KlimaDAO, a DAO which aims to tackle climate change by first solving the issue of coordinating efforts from individuals worldwide.
DAOs are organisations where leadership is distributed among all members of the community, so they provide a high level of transparency.
Let’s explore more reasons why DAOs are used for non-profit purposes, and where these will take them next.
What Can DAOs Offer Non-Profit Causes
Although DAOs have only been recently set up for non-profit purposes, this organisational system is actually ideal for philanthropic causes. That’s because DAOs are:
- Decentralised – To prevent the misuse of donors’ funds by one or group of leaders, it’s important for decisions to be made according to a consensus vote. Everyone in the organisation has the power to approve and influence proposals that the funds will be used to carry out.
- Transparent – Every decision a DAO makes and every action it takes is recorded on the blockchain. This information is publicly available for all DAO members, which serves as another way to prevent funds and assets from being embezzled or misused.
- Efficient – DAOs utilise smart contracts to automatically execute the decisions which members make. Time-consuming and routine tasks like allocating monthly budgets or summarising governance decisions require little to no human intervention; in the case of TMRWDAO, it is possible to deploy AI agents to automate them.
- Engaging – Each DAO is formed for a specific purpose, so it stands to reason that almost every member is passionate about ensuring that its purpose is met. This naturally fosters a high level of engagement and participation, especially for non-profit DAOs. This boosts the odds of success.
Features of Non-Profit DAOs
The most common way for DAO participants to acquire and accrue voting power is by owning the organisation’s cryptocurrency. This is dubbed ‘token-based voting’. However, non-profit DAOs apply ‘reputation-based voting’instead. The reputation of each participant is tokenised and if they misbehave, their reputation tokens will be burned.
Conversely, if they complete tasks for the DAO and/or stake its native cryptocurrency, they’ll grow their reputation token balance. Additionally, non-profit DAOs implement peer evaluation systems. This lets members weed out unsavoury individuals who might be abusive to other participants, even if they aren’t doing anything wrong on-chain.
Another feature of a non-profit DAO is similar to any other DAO: transparent and real-time on-chain accounting. A DAO’s decisions and actions are recorded on-chain; these include transactions involving the DAO’s liquid assets and treasury, and anyone can report anything that is amiss.
Take VitaDAO for instance. As a DAO focused on longevity and human healthspan, it has since raised $9 million in research funding, and has a permissionless system where anyone can submit proposals for evaluation.
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TMRWDAO: Streamlining the Creation of DAOs All Across Web3
The AI-enhanced aelf blockchain is scalable and secure, allowing software developers to seamlessly create groundbreaking dApps like TMRWDAO. And with TMRWDAO, anyone can form a DAO in a matter of minutes. For bonafide DAO experts, you can even specify the structure you want for your organisation.
Because TMRWDAO was built on aelf, it has a suite of AI tools to assist you in creating and managing your DAO. For instance, its AI-assisted data analytics tool is able to decipher the proposals your DAO’s participants submit and craft unique insights for you. It can also identify voting trends and patterns, enhancing your DAO’s transparency with AI technology.
Ready to get a DAO going for your favourite non-profit cause? Try it out now!
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Why Are DAOs Going Down the Philanthropic Route?
As mentioned above, the ethos of DAOs lends itself greatly to what non-profit organisations are ideally looking to accomplish. A decentralised power structure and collective decision-making are crucial for members to have faith in and contribute to the organisation's work.
Ditto for how transparent DAOs are. Not only is this vital for participants, but donors too. With everything recorded and publicly accessible, donors can be reassured that their funds are heading to the right places. This creates a virtuous cycle, where donors would then be encouraged to lend more support to the organisation and further their shared cause.
Lastly, as DAOs solely exist online, anyone with a shared philanthropic cause can get in touch and collaborate. Having a diverse group of experts means having an equally wide range of perspectives. This results in initiatives that are of higher quality, enabling the non-profit DAO to tackle an issue on a global scale.
Where Is This Trend Heading?
The capabilities and potential of AI are only set to enhance what DAOs are able to do. For example, AI agents can assist DAO participants with tasks like writing proposals and manifestos. AI governance boosts the DAO’s efficiency and frees up the time and headspace of members for more tasks which require greater thought and focus.
Furthermore, AI agents also allow DAOs to communicate with each other via swarm intelligence. This is a gamechanger for DAOs which have identical or similar causes.
The best part? They can collaborate with minimal intervention from the participants themselves.
In Closing
Non-profit DAOs have an immense amount of potential. For one, DAOs are incredibly disruptive to traditional charitiesbecause of how decentralised and transparent they are. Charities need to reconsider how they operate or even set up DAOs of their own to retain the confidence of their members and donors.
With that said, non-profit DAOs have a long way to go before becoming perfect organisational systems. A high level of decentralisation results in reduced efficiency as members need to come to a consensus before any decision is made.
Participants need to be proactive in recognising that the organisation’s goals have to take precedence, and it is up to each individual DAO to manage this.
*Disclaimer: The information provided on this blog does not constitute investment advice, financial advice, trading advice, or any other form of professional advice. TMRWDAO makes no guarantees or warranties about the accuracy, completeness, or timeliness of the information on this blog. You should not make any investment decisions based solely on the information provided on this blog. You should always consult a qualified financial or legal advisor before making investment decisions.
About Tomorrow DAO
Tomorrow DAO (TMRWDAO) is an advanced decentralised governance platform built on the aelf blockchain, a high-performance Layer 1 network. Launched in 2024, TMRWDAO leverages cutting-edge AI technologies and intuitive no-code interfaces to empower communities in establishing and managing decentralised autonomous organisations (DAOs) with unparalleled efficiency. Committed to revolutionising governance, TMRWDAO stands at the forefront of the movement towards a more transparent, inclusive, and democratically governed digital future.
For more information about Tomorrow DAO, please visit: https://tmrwdao.com
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