Introduction

In this blog post, we explore the fascinating realm of decentralized companies and the impact they are having on the crypto space as well as on real-world business.

We will overview the principles, advantages, and real-world applications of these entities, showing how they can help projects and businesses leverage blockchain transparency and stability.

We’ll go through the concept of decentralized autonomous organizations (DAOs), multi-sign smart contracts, and more while highlighting the benefits they offer in terms of transparency and efficiency. We will also look at new concepts for decentralized companies introduced by OpenDApps Cloud and how private companies can now take advantage of decentralized organizations.

Why do we need Decentralized Companies?

Decentralized companies are innovative organizational structures, empowered by blockchain technology, paving the way for the next big step in organization ownership and trust.

Through the use of blockchain technology, decentralized organizations can provide an immutable and auditable record of transactions, operations, and decision-making processes. This transparency builds trust among participants, as they can verify and validate the actions and intentions of the company.

Decentralized companies cut out intermediaries, reducing costs and increasing efficiency. This saves time and resources but also enables faster and more secure transactions, ultimately benefiting both the company and its customers.

Traditional barriers to entry, such as geographical limitations or institutional biases, are diminished in decentralized ecosystems. Anyone with an internet connection can participate, contribute, and reap the rewards of these organizations, regardless of their background or location.

In conclusion, decentralized companies are a necessity for building a more transparent and resilient future. These organizations offer an alternative paradigm that unlocks unlimited potential for innovation, collaboration, and positive change.

Decentralized Autonomous Organizations (DAO)

A DAO, short for Decentralized Autonomous Organization, is a type of organization that operates based on smart contracts aiming to eliminate the need for traditional hierarchical structures and centralized control.

In a DAO, decision-making and governance processes are automated and executed through self-executing code often referred to as smart contracts. It defines the rules and protocols that govern the organization’s operations.

DAOs are designed to be decentralized, meaning decision-making power is distributed among the participants or token holders within the organization. All transactions, proposals, and voting outcomes are recorded on the blockchain and are publicly accessible, ensuring accountability and trust.

DAOs can be utilized for a wide range of purposes, such as decentralized finance (DeFi), governance of blockchain protocols, collective decision-making, and community-driven initiatives.

Why do we need Private Decentralized Companies?

While DAOs provide a very good structure for most decentralized organizations, the ownership is usually limited to distributed governance tokens. This model is close to real-world public companies in a way that everybody who buys these tokens take part in the organization’s decision-making.

Public governance can be very limiting for organizations that want to be decentralized and leverage blockchain technology but have private ownership. This gap between real-world private organizations and DAOs is where private decentralized companies can help more organizations enter the blockchain space.

Private decentralized companies can allow the same level of transparency, security of decision-making, and resilience to censorship as DAOs but at the same time provide the option for private and/or multi-level ownership.

Private Decentralized Companies on OpenDApps Cloud

Private decentralized companies are a new concept that OpenDApps Cloud brings into the blockchain space to help fill the gap between a real-world private company and DAOs.

Decentralized companies on OpenDApps are smart contracts deployed on EVM-compatible blockchain that represent the organization as a blockchain entity. That smart contract can then be managed by the team of select ownership type and owners can execute transactions through the contract allowing for it to own assets, other contracts, and much more.

The concept of private decentralized companies is a powerful tool for organizing and managing a business on the blockchain. It even allows multi-level companies to exist because every decentralized company represented by a smart contract can own other companies.

Here is an example multi-level company structure of OpenDApps Cloud:

Image is for example purposes and might not represent real OpenDApps structure

Decentralized companies on OpenDApps are really powerful and can create structures not accessible to developers and organizations using simple DAOs. OpenDApps Cloud provides customers with three main options or ownership of deployed decentralized companies.

Companies owned by a single entity

These companies are represented by a smart contract that has a single owner — a wallet or another contract. The ownership of the contract and thus of the company is represented by a NFT part of OpenDApps Ownership Infrastructure. Transfer of ownership of the company is as easy as transferring or selling the NFT.

The owner of the ownership NFT has the rights to execute transactions in the name of the company through the contract, manage funds owned by the contract and also manage child companies.

More details on managing and deploying companies owned by a single entity will be available in a dedicated blog post.

Multi-sign hierarchical companies

Multi-sign companies are smart contracts owned by multiple entities that require transaction signatures from multiple owners to execute transactions. One type of multi-sign ownership is through a hierarchical structure.

In a hierarchical structure, the owners are split into two groups — root signers and leaf signers. When a transaction is executed it requires approval from all root signers and 50% + 1 approval from all signers (root + leaf). This effectively means that a transaction cannot be executed without approval from all root signers meaning they have the power to veto proposals. At the same time, leaf signers can still block a transaction if enough oppose it and approval of 50% cannot be reached.

Hierarchical multi-sign ownership is a very secure and powerful ownership structure that is very useful for private companies with multi-level management.

More details on managing and deploying multi-sign hierarchical companies will be available in a dedicated blog post:

Multi-sign shares-based company

Like multi-sign hierarchical companies, multi-sign shares-based companies are smart contracts owned by multiple entities that require transaction signatures from multiple owners to execute transactions.

The ownership shares for the contract and thus for the company are represented by a NFT part of OpenDApps Ownership Infrastructure. Transfer of ownership shares is as easy as transferring or selling the NFT.

An owner of ownership shares NFT has the right to propose and execute approved transactions in the name of the company through the contract. For a transaction to be executed, a proposal with approval from 50% + 1 share is required.

More details on managing and deploying multi-sign shares-based companies will be available in a dedicated blog post:

In-depth guides on all available services and other SaaS-related information resources will be available later on in this blog and any related content will be linked here:

  1. OpenDApps Cloud — Testnet Connection and Testing Guide
  2. Single Entity Decentralized Companies Overview (TBD)
  3. Guide to Shares-based Multi-Sign Decentralized Companies on OpenDApps Cloud
  4. Guide to Hierarchical Multi-Sign Decentralized Companies on OpenDApps Cloud
  5. Token-as-a-Service Overview (TBD)
  6. More….

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