29 April 2022
The DAO – A Decentralized Approach to Governance
The DAO – A Decentralized Approach to Governance

It seems that every day someone identifies a new problem that can be remedied through blockchain technology. Nowadays, decentralized spaces have evolved past being gateways for innovative financial operations. In addition to initiating  actions across various services connected to the Internet of Things, blockchain-based infrastructure has recently focused on solving issues related to management and organizational efficiency.

 Both organizations and societal establishments can find a lot to gain in the fundamental virtues of the blockchain. With its immutability of data, full transparency, and automation; the blockchain might be just what modern businesses need in order to break free from the shackles of inefficiency. It is this form of governance that forms the basis of the DAOs or Decentralized Autonomous Organizations. 

Current Organizational Hurdles

The vast majority of organizational issues relating to efficiency and effectiveness are directly linked to the question of trust and human error. The same could also be said of issues relating to simple human interaction. Trust has always been the biggest challenge to overcome when two or more parties are trying to negotiate terms and come to an agreement. Extensive contracts and documentation are seen as practically mandatory for any sort of obligation to have a legal basis. However, the imperfect nature of humans has proven itself remarkable at undermining the “legality” of documents. From incompetence, to negligence, to full-on corruption the ever revolving door of civil courts serve as a reminder that no amount of  documentation can guarantee the automatic execution of a contract.

  In light of these shortcomings, businesses seeking transparency in a trustless environment might greatly benefit from utilizing blockchain technology as the perfect medium for launching DAOs.


A Decentralized Autonomous Organization is a blockchain-based entity that is operated and run by a community of participants without any centralized authority. The use of smart-contracts ensures the full transparency of all processes in a DAO, while consensus rules secure the  immutability of voting. A more simple application of this concept can be seen in the way that Bitcoin Core developers vote on upgrades to the Bitcoin program. Likewise, DAO members can also vote on structural changes to their organizational protocols through the blockchain. 

The voting process is considered a highly democratized one. Voting rights are secured through the ownership of native DAO tokens, tallies are counted through code, and services are automatically handled through the use of smart-contracts. This process can be applied to any proposal that any member of a DAO is free to  publish and put up for general evaluation.The majority voting mechanism and decentralization ensure that no single entity can take control of the DAO or influence the outcome.

Normally, DAOs are structured around a combination of three tasks turned into technological solutions. The first type is the Social DAO, which brings discussions to a quick “close” by employing token-based voting with minimal transaction fees. The second type of DAO is related to asset and treasury management, where the group collectively  controls either its own funds or those of clients. The third type of DAO is related to the operational function, and is best suited for handling internal  expenses such as payments, grants, and other transfers that need majority approval to be executed.

Notable live use cases of DAOs so far include services that operate payments such as salaries and service contracts, the distribution of governance tokens and the respective accrual of income which their holders might receive in a given period, sales of common assets, and of course the distribution of project proceeds. 

For Banking

As we work towards improving the quality of our services, Embily will continue to seek and integrate decentralized blockchain based solutions. We’re excited to see how applying DAO principles at Embily could expedite the process by which we  turn client feedback into service improvements in addition to introducing new features. In the end, expanding our financial infrastructure will always come second to building one that shares the vision of our crypto-community.

Read The Making of a Modern Payment System - Crypto Bank Cards - https://embily.com/blog/the-making-of-a-modern-payment-system-crypto-bank-cards