Decentralized Autonomous Organizations (DAOs) gained a lot of traction in the past, after a project known as “TheDAO” gathered roughly $150 million dollars and then lost it to a hacker due to an bug that was found in the code. This unfortunate sequence of event, however, was just a rock in the way.
Although the first DAO was hacked, the concept itself remains alive and well, and although some technical difficulties may lie ahead, it’s a concept that is worth exploring and bringing to life. So what is a Decentralized Autonomous Organization?
It’s basically a crowdfunded organization in which there are no CEOs. Instead, a decentralized group of token holders vote on decisions, be it on how to spend the funds that have been previously sourced or on other decisions regarding the organization itself and its projects or contractors.
The idea behind TheDAO was to use the crowdsourced funds to invest in projects that could bring profits to the DAO token holders. This organizational structure can, however, be used for various goals, one of which is social accountability and activism, a concept that is being explored by ACT. Their website reads:
“ACT is a decentralized autonomous organization (DAO) addressing social accountability by aggregating micro payments from citizens to fund grass roots proposals that drive change.”
So, how does it work, exactly? Aspirant contractors must submit their proposals with a small ETH payment (to avoid spam). Then, curation for the proposal is conducted in a transparent environment by the community, with ACT token holders being rewarded for their work in that field. Then, an Activation algorithm will “push proposals to ACT users locally and globally”.
Once a proposal has been curated, the ACT users will be notified via an easy-to-use mobile app.The ACT users will then be able to see the proposals and vote on them, with votes being previously sold at $0.10 each, allowing users to vote yes, no or abstain. A quorum of 90% must be reached in order for the proposal to be funded. ACT also employs a delegate system where users can pass their vote on to users who seem to have expertise in the field of the proposal.
The funds gathered from the votes purchased are used to fund the proposals and bring the project to life, with 15% of the Ether sourced going to ACT token holders who provide curation services. In order to ensure that ACT token holders are truly involved in the process, the rewards are given in the form of a third token, the “ACTION” token. This token can be converted into ACT tokens over a long period of time, ensuring the ACT token holders have a vested interest in the platform’s success.
As so, ACT is able to build a system where users can contribute to important causes in a transparent environment and with no middlemen fees, while others can be rewarded for curating the proposals that can make a positive impact on the world. Being a community-focused project, ACT is also open to changes. The white paper reads:
“The crypto community – those that will make up the bulk of supporters during ICO – comprise specialists from diverse fields including behavioural economics, advanced mathematics, game theory, coding languages, and complex algorithms. The ethos of this community is one of collaboration and participation. The donation campaigns are an opportunity to debate and contribute to the design of the DAO and its constituent parts. Such ideas are foreign in the world of the traditional centralised corporation and venture capital but we believe that an ICO is as much about design as it is funding activities that will make the decentralised vision of the project reality.”