The Relationship Of Dapps And A Dao

Dapps, the powerful autonomous applications that are created on the Ethereum blockchain with its Smart Contract capability, share a relationship with decentralized autonomous organizations. There are many similarities in how they function. To further understand the workings of a DAO, it is useful to take a look at this relationship with Dapps.

What are Dapps?

Dapps are a concept that are somewhat unique to Ethereum and its blockchain. These blockchain-based applications are ones that can be created to run autonomously without the need for someone to administer or operate them. They serve to create a bridge point between an individual and a service. The individual in complete control of how they interact with the Dapp.

Underpinning Dapps is blockchain technology. Perhaps the easiest way to explain Dapps is to say that they are open-source software platforms that leverage the power of the blockchain in order to work. Some of the more popular Dapps that have been developed are Golem, Augur, and Melonport. It is hard to precisely define Dapps for the simple reason that few of them have been developed.

What we can do is reference the characteristics of Dapps. They have four common features:

  • Decentralized – all records of the application’s performance are logged on the blockchain
  • Open-source – meaning that anyone with the ability to do so can create their own Dapp, but more importantly that Dapps are autonomous and self-governed
  • Incentives – Those who validate the processes of a Dapp on the blockchain are rewarded with cryptocurrency tokens relative to the application
  • Security protocols and either a Proof of Work or Proof of Stake architecture

What do Dapps have to do with DAOs?

We can now begin to clearly establish the similarity between a Dapp and a DAO. Both are autonomous examples of how software may be developed or how a company may be run. Just as the DAO concept reinvents the business model, so Dapps reinvent software models. Both of these concepts have the ability to reshape the technological landscape of the world.

It is when Dapps and DAOs combine that truly amazing possibilities could become reality. It wasn’t that many years ago when many of the things we are seeing happen in the world today were considered science fiction. In the movie Total Recall,  Arnold Schwarzenegger is seen using a taxi that is driven by a robot-like machine. The cab and the machine has the ability to drive a passenger to a destination, collect money, make change, and basically do everything a human cab driver can do. But there is no need for a taxi stand, dispatchers, drivers, mechanics, or gas attendants. The car with its robot can drive itself to a repair shop, pay for repairs and gas, and dispatch its own calls.

Flash forward to 2018 and we are on the verge of something like this becoming a reality. Imagine using your car to do exactly what the taxi did in the film while you sit at home or work another job. Everything runs automatically, and you collect the income. A DAO combined with a Dapp has, in theory at least, the chance to create something like this.

DAOs and Dapps are examples of how blockchain technology is changing the world. We can only hope that more development will foster greater innovations that benefit society.