The internet is constantly evolving, and we are now witnessing one of its most significant transformations.
The rise of Web3 and Decentralised Autonomous Organisations (DAOs) is reshaping how people interact, collaborate, and manage digital spaces.
These innovations aim to move away from centralised control, empowering users with greater autonomy and ownership. But what exactly do these concepts mean, and how will they influence the future of digital communities?
Understanding Web3
To understand Web3, it’s useful to look back at how the internet has evolved. Web1 was the first phase, characterised by static web pages and limited user interaction.
Then came Web2, which introduced social media, interactive platforms, and user-generated content.
However, Web2 also led to the dominance of major tech corporations, which now control vast amounts of user data and online activities.
Web3 seeks to change this by decentralising the internet. Built on blockchain technology, Web3 enables users to control their data, digital assets, and online interactions without depending on a central authority.
Instead of platforms profiting from user engagement, Web3 aims to create a system where individuals can participate as owners, contributors, and decision-makers.
The key principles of this new digital era are transparency, security, and decentralisation.
The Role of DAOs in Web3
A Decentralised Autonomous Organisation (DAO) is a new model of governance that removes the need for traditional hierarchies.
Unlike conventional organisations, which have executives making decisions, DAOs rely on community-driven governance. Rules and decisions are managed through smart contracts—self-executing agreements that run on blockchain networks.
These organisations function in a decentralised manner, meaning power is distributed among all members rather than concentrated in a single entity. Members typically hold governance tokens, which give them voting rights on important matters such as project funding, operational changes, or community policies.
DAOs serve various purposes, from managing cryptocurrency projects and DeFi platforms to funding creative initiatives.
One well-known example is MakerDAO, which oversees the Maker Protocol and helps regulate decentralized stablecoins. Another case is ConstitutionDAO, a collective effort to purchase a rare copy of the U.S. Constitution. These examples highlight how DAOs can bring together individuals with shared goals, allowing them to collaborate effectively without relying on traditional corporate structures.
The Impact of Web3 and DAOs on Online Communities
Traditional online communities—such as those found on social media platforms—are often governed by centralised entities. Facebook, Instagram, and Reddit control how communities operate, moderate content, and manage user data. This centralised approach can lead to censorship, data privacy concerns, and a lack of financial incentives for participants.
Web3 introduces a more democratic and transparent model for online communities. Instead of a single company dictating rules, community members make decisions collectively.
DAOs take this a step further by enabling fully decentralised governance, where users vote on key issues and directly shape the future of their community.
One major advantage is monetisation and incentives. In Web2, users generate content and engage in discussions without direct compensation, while platforms profit from advertising.
Web3 changes this by allowing members to earn tokens for their contributions, whether it’s creating content, moderating discussions, or participating in governance. These tokens can hold real-world value, making participation more meaningful and rewarding.
Additionally, Web3 communities can own and control their digital assets. Instead of relying on a platform to store and manage intellectual property, DAOs give communities the power to collectively decide how assets are used. This could include digital art, software, or even physical goods, ensuring fair ownership and distribution.
Challenges and the Road Ahead
Despite their potential, Web3 and DAOs face several challenges. Blockchain technology is still developing, and issues like scalability, transaction costs, and user experience need improvement. Many blockchain networks have high fees and slow transaction speeds, which can limit accessibility.
Additionally, interacting with decentralized applications (dApps) can be complicated for those unfamiliar with crypto wallets and smart contracts.
Another issue is DAO governance. While decentralization promotes fairness, it also comes with risks. Large token holders may gain disproportionate control, leading to decisions that benefit a few rather than the whole community. Additionally, low voter participation can make governance inefficient, as many members may not engage in decision-making processes.
The regulatory landscape is another uncertain factor. Governments and legal bodies are still figuring out how to classify and regulate blockchain-based organisations and digital currencies. Issues like taxation, intellectual property rights, and legal accountability remain unresolved, which could impact how DAOs operate globally.
What Lies Ahead?
Despite these challenges, the future of Web3 and DAOs looks promising. As blockchain technology advances and user-friendly solutions emerge, decentralised communities will likely become more mainstream. These new models of collaboration and governance have the potential to reshape industries, from finance and entertainment to social networking and commerce.
In the coming years, we may witness the rise of decentralised social platforms, community-owned marketplaces, and new digital economies where users have greater control over their online presence. Web3 and DAOs are more than just technological innovations—they represent a shift toward a more open, fair, and participatory internet.
As these concepts continue to evolve, they will redefine how people connect, collaborate, and build digital ecosystems. The future of online communities is not just about technology—it’s about empowering individuals and fostering a decentralised, user-driven internet.
*Olusegun Afolabi, is the chief innovations architect, Face Technologies UK Limited. Linkedin Profile is here.
