The Royal Melbourne Institute of Technology’s (RMIT) Blockchain Innovation Hub has released a report proposing the implementation of a pilot decentralized autonomous organization (DAO) to assist specific precincts in Melbourne’s central business district (CBD) in recovering from the impacts of the pandemic.

The report, which is part of a five-piece series of reports funded by the Victorian Government in Australia, details how blockchain technology — specifically DAOs — can be used to help cities like Melbourne recover from a lack of economic activity during the pandemic and survive in the future with the likely persistence of hybrid working arrangements.

Created in consultation with the City of Melbourne, the state government and local businesses, the report outlines a detailed and actionable plan for a DAO pilot program called the “Docklands DAO,” which would be implemented in the Docklands precinct of the Melbourne CBD.

The report’s author is Blockchain Innovation Hub researcher Max Parasol, who is also a contributor to Cointelegraph Magazine.

He told Cointelegraph that DAOs offer cities an innovative way to utilize anonymously pooled data to optimize resource allocation, increase overall efficiency and create opportunities for strategic placemaking by collectively reimagining and reinventing public spaces.

A DAO is a crowd-sourced entity governed by token holders and organized around a specific set of rules enforced on a blockchain.

“DAOs incentivize participation, so those who work for the DAO will get more governance capability and so on. Ultimately, the community gets to decide the governance mechanisms,” Parasol said.

DAOs have witnessed a rapid global uptake as the technology becomes increasingly utilized by an increasingly wide array of organizations seeking to explore the possibilities offered by the blockchain-based digital voting mechanisms.

At the end of 2021, more than 1.6 million people were involved in a DAO at some level, a colossal increase from just 13,000 total DAO participants at the beginning of that year.

Parasol added that the Docklands DAO was designed to solve what he calls the “double shock” problem, where local areas need assistance recovering from the economic fallout of COVID-19 lockdowns, while also adapting to the new reality of a hybrid work-from-home model.

Parasol believes that DAOs are an essential step in the perfection of the “smart city,” which is a concept for a city that uses different types of technology such as voice detection and movement sensors to collect specific data.

“Smart cities were initially designed as public-private partnerships with governments and companies who collect data and then reverse engineer that data to make a smart city.”

Parasol added that DAOs take the ambiguity and centralized control of data out of the equation. “Instead of smart cities being controlled by centralized partnerships between governments and data services like Cisco, DAOs give the action of data to a given community.”

“With the Docklands DAO, you get a specific type of DAO called a ‘data trust,’ where information — like people flow data — gets handed over to the DAO in an anonymous and secure manner. Then, the DAO makes decisions about what to do with that data. It’s all based on community governance.”

Related: How do you DAO? Can DAOs scale and other burning questions

Communities adopting DAOs as a potential way to make their local areas more efficient is becoming increasingly common. In September 2021, a DAO based in Austin, Texas, called ATX DAO was launched in a move to educate citizens and surrounding governments about cryptocurrency while also providing funding for new programs in the local community.