DAOs: a new-fangled term to bamboozle novices into parting with their cash, but what role can they really serve?

Decentralised Autonomous Organisations (DAOs) in the digital assets sector have been around since 2015 when by a team called Slock.it launch the first DAO. Slock.it’s intention was to raise capital for different projects and start-ups. Using a smart contract, Slock.it programmed-in voting rights and ownership so that the initial investors in Slock.it received a token that gave them a share in the dividends, and capital loss and gains in direct proportion to the % of money that was raised. This was, in many ways, similar to an ordinary share. However, the real difference was there was no central control, management, CEO nor CFO - actually no board. Rather confusingly, the first digital asset DAO was called ‘The DAO’ but unfortunately it did not get off to a great start. It was hacked and, having raised $150million, $50 million was stolen.

A DAO is established by codifying rules and decision-making processes and procedures of the venture, thus removing the need for paperwork and boards a…