Key facts:
DAOs must solve security and governance problems, says the agency.
In addition, it considers it necessary to encourage the participation of its members in voting.
The World Economic Forum sees decentralized autonomous organizations (DAOs) as having potential in the corporate and economic industry.
This is how the organism expresses it in a recent report. They add that, to unleash their potential it is necessary that they solve structural problems first, for example, the security of smart contracts.
As an example, mention is made of The DAO, an important organization for the development of Ethereum in its early years, which was hacked. For the World Economic Forum, it is important that these decentralized organizations, in terms of security, live up to the objectives they pursue.
The truth is that, in general, the hacks —according to the aforementioned report— are due to human failures and lax mechanisms to counteract them.
He mentions the international organization (also known as the “Davos Forum”) that Another challenge for DAOs is the legal framework. In most countries they do not have formal regulation and for this reason some organizations have created hybrid systems that combine a “traditional” company governed by mechanisms of a DAO.
Finally, it is explained that these non-traditional organizations must improve participation in governance. According to observations from the World Economic Forum, DAO participants often do not vote when they can, as they are not interested in their direct interaction with the organization. As an example, they refer to the decentralized Ethereum exchange, Uniswap, which has had votes in which less than 0.06% of the entities with voting power participated.
The World Economic Forum is optimistic about the potential of DAOs
Anyway, as mentioned at the beginning, the World Economic Forum is optimistic about the future of DAOs:
Their long-term importance will depend on how effectively they solve organizational and governance problems. For millennia, any tool that manifestly improved human coordination eventually caught on and produced dramatic economic and social gains. Only time will tell if DAOs should be added to this list.
World Economic Forum.
In addition to what is outlined here, the text, written by specialists Aiden Slavin and Kevin Werbach, breaks down what a DAO is and explains its different categories.
As defined by the CriptoNoticias glossary, a DAO is “a type of digital organization or ‘company’ that works based on a system of rules previously codified through smart contracts or a chain of blocks.