Impact of Decentralized Autonomous Organizations (DAO) on Society 5.0

Abstract

Decentralized autonomous organizations (DAOs) are not a novel social phenomenon; rather, they draw inspiration from self-organizing systems and are often regarded as digital counterparts of cooperatives (Co-ops), wherein members fully own and govern the organization. The advancement of digital solutions for decentralization, such as Distributed Ledger Technology (DLT), along with the emergence of the third generation of websites (Web3) and platforms, has propelled DAOs to a new echelon. As such, DAOs represent the next generation of organizations, aptly referred to as Organization 5.0 in the context of Society 5.0. The objective of this paper is to provide a comprehensive overview of the evolutionary trajectory of decentralized autonomous organizations and their classification. The advent of Ethereum in 2015 enabled the realization of DAOs, with "The DAO" being the first large-scale example established in 2016 as a decentralized venture fund within the Ethereum ecosystem. Over time, DAOs have expanded their scope beyond fundraising and have evolved to serve various purposes. To provide a comprehensive context, the paper presents background information on the evolution of blockchain applications and discusses ethical considerations related to DAOs. In order to identify the most common categories of DAOs, this paper consults various DAO explorers and include, for each identified category, a descriptive example of a DAO. Finally, the paper concludes by offering an outlook on the future of DAOs.