The Evolving DAO: How Decentralized Companies Are Dominating Web 3.0

This article is from the TranspilerLab.DAC, authored by Connor Sephton, translated by Chloe.

Decentralized Autonomous Organizations (DAO) have become a pillar of the crypto world

The fundamental principle behind DAO is to enable companies and organizations to operate fully without the need for a hierarchical management structure, much like a vending machine selling a snack in exchange for a certain amount of money, after which the system automatically reorders stock with that money. Maintaining the machine does not require human involvement, as all the processes necessary for its operation are pre-written in the relevant code.

Beyond these real-life examples, the possibilities of DAO can be said to be limitless. But now there is a problem; many people believe that the potential and prospects of this technology have not been fully realized, as many Dapps only use DAO for governance purposes, simply allowing community members to submit proposals and vote.

An increasing number of crypto enthusiasts believe that as the world shifts to Web3.0, DAO will play a leading role------paving the way for fully decentralized companies to ensure that these companies can enjoy equal importance and influence in the Web2.0 world alongside centralized tech giants. The rise of the value internet requires a new organizational form that allows decentralized applications to be managed by community members.

However, to achieve this, DAO still needs to evolve and address and eliminate technical limitations for large-scale applications.

More than just voting

Metis DAO believes that decentralized autonomous organizations should provide community members with functionalities beyond just voting mechanisms. DAO should be used for collaborative management, allowing everyone to contribute to the development of projects and be rewarded based on their efforts.

But currently, the structure of DAO is not suitable for large-scale applications. It heavily relies on smart contracts, and programming languages are not always suitable for executing complex business logic. For a decentralized large company, focusing solely on voting is also impractical and distracts from the bigger picture. Large enterprises do not hold board meetings every day to vote on operational issues; instead, they have a core framework to ensure that daily operations are under control.

DAO needs this as well. From a technical perspective, changes are also needed. The drawbacks of Layer 1 solutions include high gas costs, low efficiency, and a lack of on-chain tools to support DAO management. Evolution also needs to ensure that community members can easily trust each other.

Making decentralized companies a reality

Metis DAO is characterized by establishing a trusted core mechanism, a method known as Optimistic Governance, aimed at uniting community members by using stake bonds to ensure that participants have a financial commitment to fulfill and are motivated to work for the best interests of the project. Collaborators who fail to fulfill their commitments may ultimately be penalized through a withdrawal mechanism.

Decentralized companies can be established on Metis through three simple steps------the embedded trust mechanism means they can collaborate with anyone. Over time, users can accumulate credibility in a decentralized business credential system recorded on a blockchain. This means that each wallet address can be assessed, allowing users to determine whether they are trustworthy.

As a sidechain on top of the Ethereum main chain, Metis is also a Layer 2 solution (via hard fork Optimistic Rollup). This paves the way for significantly improved scalability and greatly reduced gas costs. Most transactions ultimately occur on this sidechain, and when communication with the main chain is needed, they are bundled into a package. Better yet, a large number of microservices and tools can be developed and deployed through this infrastructure.

The project also provides more functionalities for DAO management. Currently, community members have developed task management, knowledge management, and event management. This, combined with the simple interface used by Web2.0 users, paves the way for easy-to-understand and directly relatable API integration with other Dapps.

Over time, Metis hopes that DAO will no longer be a shell structure that does not encourage value creation. Therefore, reform is a necessary condition for effective governance, as many projects are homes for token holders pursuing arbitrage opportunities, who have little intention of voting because they do not care about what happens in the community.

Metis has just completed its seed round financing, and it will officially launch in April, completing all private placements in the same month. Metis paves the way for the integration of Web2.0, DeFi, and NFT communities, enabling community members to collectively operate and manage their funds, avoiding exploitation by "whales." Meanwhile, the Metis token will be listed on exchanges before June and will also launch a series of other microservice tools. Metis will act like an engine, supporting an increasing number of decentralized applications to go live on the blockchain.