The future of DAOs is a hotly debated subject right now. 2021 saw DAOs gaining some attention, thanks to social-cultural DAOs. The discussion around DAOs helped draw attention away from BTC, Metaverse, and NFTs. Although DAOs are likely to experience growth this year, they will also face regulatory challenges.
The reason for the current optimism around DAOs is due to the recognition that they have the ability to organize people. This understanding is likely to help DAOs gather momentum.
Analysts believe that the two main reasons that will drive DAO growth are – their easy accessibility and their ability to build and grow communities. Another attraction is the fact that it is easy to enter and exit DAOs. The pandemic and the changes in the way people work have also provided DAOs with the opportunity to grow into new areas.
DAOs are likely to be most popular with start-ups. The adoption will vary with sectors that the start ups are in. The sectors for DAOs could include social, grant, media. collectors, etc. Collector DAOs for artwork and content have already gained substantial traction. In addition, DAOs could also appear in finance, entertainment, tech, and gaming.
However, to manage the anticipated growth, it is important that a regulatory framework be put in place. The nature of regulations will also impact growth. However, the general expectation is that DAOs will perform better than DeFi. It will be especially interesting to see how DAOs fare in emerging economies because DAOs enable passing the power to the people.
Clearly, as long as DAOs are compliant with the tax regulations, they will grow. At the same time, the regulatory frameworks also need to be progressive to help DAOs grow.