How Organizations Can Use DAOs and DeFi to Support CXO Strategies

Decentralized Autonomous Organizations (DAOs) and Decentralized Finance (DeFi) walk the same line, but they take different paths, both of which can significantly benefit the long-term vision of a CXO. DAOs can provide CXOs with unique mechanisms to develop closer, more inclusive customer relationships and integrate internal cultural changes. Meanwhile, DeFi mechanisms enable CXOs to develop entire customer-focused financial ecosystems.

However, before we cover how organizations can best use these technologies to support CXO strategies, we need to discuss where they exist. There are two layers to DAOs and DeFi for the progressive CXO; practical strategic advancement and a springboard to enter the most disruptive era in the history of internet technologies.

Gateway to Web 3.0 and the Metaverse

DAOs and DeFi are essential components of Web 3.0 and the Metaverse. Decentralization is the foundation of the next iteration of the internet and, as with the existing internet, governance and trade will continue to be critical concerns.

Many CXOs are struggling to find ways to enter the Metaverse and transition to Web 3.0. As we’ve seen repeatedly, the big bang approach doesn’t work. Additionally, too many companies are getting it wrong. As essential technologies, DAOs and DeFi enable organizations to take a use-case-focused approach that instantly adds value and justifies the company’s investment.

Beyond this, the technologies can solve existing business obstacles in the Metaverse or another Web 3.0 environment. For example, customers may be more inclined to adopt a DeFi-backed customer loyalty scheme because the returns are far higher than in traditional finance.

The Potential of DAOs

A DAO describes itself: It is a decentralized mechanism for autonomously managing the collective assets of a democratic organization or community. Although the term has become more mainstream and new to many, the concept is certainly mature. In fact, as of June 2022, over $10 billion was held in the leading DAO treasuries.

From a CXO perspective, DAOs enable a superior, more involved UX. You can create DAOs to incorporate customers at every level of your business. For example, during product development, high-value customers can receive voting rights to determine what they want to see from a new offering, helping you to target the development processes.

Beyond this, DAOs can provide an alternative to shares, where a percentage of profits, perhaps solely Metaverse-generated, can be distributed amongst loyal customers for their ongoing commitment to your brand.

Internally, DAOs can incorporate the stakeholder voting rights system to create a more democratic company culture. In this scenario, business users can directly impact the direction of growth and consequently feel invested in the success.