Part I: DAO

What is a DAO?

Can you imagine a company that functions anonymously, and totally internet-based? None of the management team nor employees know each other, and none of the members has the right to access without approval from the team. Well, this is not some crazy concept from a movie scene. It is an abstract of how DAO works.

Image source: https://blog.liquid.com/hubfs/DAO- Network.png

DAO stands for Decentralized Autonomous Organization. It is an effective and secure way to work with teammates spanning the world. All decisions are followed by the approval of the majority of the team, which means no CEO or a single member of the management team can manipulate the treasury of the company. This greatly decreased the damage to the company caused by a dodgy leader.

Why DAO?

Everything to do with money requires trust. Operating a company/organization requires a giant amount of funds. Just as it is hard to put one's own money inside someone else's pocket, it is hard to fund our own money in a company with some partners we just met. With DAO, no one needs to trust anyone in the team. The code is 100% transparent and secure, and so does the system.

Part II: dAPP

What is dAPP? How Does It Work?

The full name for a dAPP is a decentralized application. It is built on blockchain (a decentralized network), with backend code (including the smart contract) and a frontend user interface. To understand dAPP, it is crucial to know the concept of smart contract, which is the foundation and the backbone of the dAPP.

Here is a quick explanation for a smart contract:

As its name “smart” indicates, a smart contract is a self-executing contract. The agreements between buyers and sellers are directly programmed into codes. The code is in the form of:

• If A happens, then B happens.

The smart contract is usually applied on blockchain and shares the characteristics of transparency and irreversibility.

Through smart contracts, traders can decide their own rules, just like regular contracts that we see every day. The special function of a smart contract is that it will automatically enforce traders to execute the predetermined deals.

dAPP is different from the other APPs that we use in daily life because most of these APPs contain a backend code that is run by a centralized company (server). Whereas in dAPPs, all instructions are executed based on the smart contract and the system does not have a centralized controller.

Image source: https://kingslanduniversity.com/wp-content/uploads/2019/06/dapps-1024x512.jpg

Why dAPP?

Here are some benefits of dAPP:

• Privacy: There will not be a requirement for real-world identity in dAPPs. Users can be totally anonymous on these systems.
• Efficiency: Since there is no centralized authority, and all processes are automated by codes, it greatly decreased the timing for running the system.
• Security: Each user is equal in dAPP, and non of the single user has the ability to access private information.
• Data Integrity: All data are stored on the blockchain, and these data are immutable and indisputable.