A Decentralized Autonomous Organizations (DAO) is a community of individuals or legal persons who share a common interest.
How is a DAO organized?
One of the main characteristics of DAOs is the absence of a decision- making body. Any form of hierarchy is banned.
How does a DAO work?
Decision by vote. – Each DAO obeys governance rules set in smart contracts. Decision-making goes through the vote of community members. As with a corporation, the weight of a member’s right to vote is based on the level of his investment. Decision-making by voting has the advantage of involving all stakeholders. However, this process makes decision-making cumbersome and slow. Transparency. – In principle, the decisions voted on by the members of the community are made publicly available. A priori, all actions of members of the community are also publicly recorded. The principle of transparency is intended to encourage members to vote and act in good faith and in a responsible manner.
Security. – Given the level of investment involved, the top priority for DAO members is cybersecurity.
Why are DAOs important for IP owners?
The presence of intellectual property rights holders or associations representing intellectual property rights holders within the relevant DAOs seems crucial in order, a minima, to be aware of the debates and decisions and, ad majorem, to influence decision-making.
This article was first published in News From There, our Web3 Brand Protection Newsletter, Issue, December 2022.
