DAO stands for Decentralized Autonomous Organization – decentralized meaning there is no central authority, autonomous meaning the ability to govern itself, and organization meaning a group of members. DAOs can also be described as networks of members which control the organization’s operations without having to follow a hierarchy. DAO members can control the workings of their organizations by submitting proposals. For these, members vote with governance tokens.

The smart contract enforces decisions within DAOs. They follow operations procedures embedded into blockchains. Smart contracts automatically respond to passing proposals. The Foundation, for example, uses a DAO in order to vote and propose changes to the Ethereum protocol. Pre-selected developers will be paid in ETH if a proposal is approved and have access to development tools.

The key aspect that makes DAOs so revolutionary is trustlessness – human-to-human trust isn’t required in order for members to know that organizational rules will be enforced and promised actions will be acted upon. The Ethereum example shows that proposals can’t be stopped by the influential foundation members, like Vitalik Buterin, the co-founder of Ethereum. Ethereum.org explains more:

Starting an organization with someone that involves funding and money requires a lot of trust in the people you’re working with. But it’s hard to trust someone you’ve only ever interacted with on the internet. With DAOs you don’t need to trust anyone else in the group, just the DAO’s code, which is 100% transparent and verifiable by anyone. The DAO’s code is 100% transparent and verifiable by anyone, which opens up new possibilities for international collaboration and coordination.

Cryptocurrency enthusiasts have begun to notice the benefits of DAOs for business governance and all other types of organization.

DAOs in business can help to distribute power more evenly between employees. They grant them different amounts of governing tokens, either equally or based upon factors such as seniority and title, which allow them to vote on business strategy, pay and benefit, new products, services, and business-to-business deals.

DAOs are also able to be used to manage and pay employees automatically based on their performance. High-performing groups can receive transparent and automatic compensation, and low-performing ones can be assigned to new managers or placed on performance improvement programs.

Individuals that do not directly work for DAOs can also affect their operations by purchasing governance tokens from members and voting on proposals, directly providing input from an outsider’s perspective. DAOs enable project teams to collaborate with their communities. Developers set visionary boundaries, and communities guide project development.

DAOs allow netizens to come together with common visions and build amazing things.

Given the limitless potential of DAO’s, there is a large variety in governance tokens and their uses. These are some of the most popular crypto examples.

• (UNI): Uniswap supports hundreds of tokens including emerging and new projects. Uniswap’s native UNI token can be used to vote on changes made to the exchange, such as which cryptocurrency networks (Ethereum, Matic, etc) it supports.
• MakerDAO (MKR: MakerDAO, a DeFi platform (decentralized finance), allows users to place collateral and obtain loans against it. MakerDAO’s native MKR token is used to vote on DeFi protocol changes and maintain the peg of MakerDAO’s own DAI stablecoin.
• Illuvium (ILV): Illuvium is a AAA-quality monster-capture-combat game. Players can use Illuvium’s native ILV token to vote on council members, new features, and game balance.

A newer governance token that’s been running up the charts is SBP, the token for ShibaPad. ShibaPad is a community-driven launchpad on the Binance Smart Chain, goal-set on creating a thriving “woof ecosystem”. SBP tokens can already be used by holders to vote on critical decisions regarding ShibaPad, though full DAO functionality will be coming soon with ShibaPad’s second version of the SBP token, SBP V2.

Members of ShibaPad will be eligible to cast their votes on new projects and crowdfund them. They will also have access earlier than investors outside the company. ShibaPad supports NFTs in its home country.

Here is a closer look at ShibaPad’s tokens:

• ShibaPad is set to airdrop SBP V2 tokens when the DAO has been fully released. This token will be equal in number to their SBP tokens.
• Every buy will include a tax on the purchase: 2% of all buys will go to LP pool, and 4% towards development. The marketing budget will receive 4%, while token buybacks will get 6%.
• Sales will all be subject to an additional 2 percent tax, which will then be distributed among holders according to their holdings.
• To earn more SBP, holders will have the option to purchase SBP tokens.

Here are important points regarding ShibaPad’s launchpad:

• Members of the community will make their main income source through the launchpad.
• The launchpad is a way for investors to gain early access to projects with different price and vesting options.
• BNB can be used for participation in projects pools at reduced fees
• Members’ tokens will impact their investment and fee options.
• The governance tokens will allow community members to suggest and vote for new ideas such as swaps and games.