The Steem Proposal System was introduced with the HF21/H22 that happened back in September 2019.
A decentralized autonomous organization (DAO), sometimes labeled a decentralized autonomous corporation (DAC), is an organization represented by rules encoded as a computer program that is transparent, controlled by shareholders and not influenced by a central government. A DAO's financial transaction record and program rules are maintained on a blockchain. The precise legal status of this type of business organization is unclear.
https://en.wikipedia.org/wiki/Decentralized_autonomous_organization
How does Steem.DAO works?
Steem.DAO is an account on the Steem blockchain (@steem.dao) that receives 10% of the annual new supply. These funds are dedicated to the Steem Proposal System (SPS) for platform improvements.
Every day a portion of the SBD fund managed by the Steem.DAO is distributed to various proposals, depending on a) how much the proposal is asking for and b) how much approval the proposal has.
https://developers.steem.io/services/steem.dao
A 10% of the yearly inflation is dedicated to this account. On estimate around 1,638 SBD (Steem Backed Dollars) are allocated daily. These funds are kept in the @steem.dao account.
Community members than make a proposal and applied for funding. The stakeholders than vote on proposals (staked based voting) and when a proposal is voted above a certain threshold the proposal is funded and start receiving funds. The threshold for a proposal to be funded is also voted from the stakeholders, and it is not fixed.
https://steemproposals.com/proposals
At the moment 5 proposals are receiving daily funding, out of 32 applicants.
The account has accumulated a total od 232,549 SBD (168k USD, at today price of 0.68 $ per SBD), and can make up to 1% daily payouts, or 2,325 SBD.
Lets take a look how has this system performed till now.
Payout from @steem.dao
Here is the chart on daily payouts from @steem.dao
Note: Payouts are in USD with 0.68 $/SBD at today’s price.
We can clearly notice an up trend in the payouts.
The payouts started slowly with just above 100 to 200 $ per day, then went to almost 300 $ per day, and in Jan 2020 almost reached 500$ per day.
The monthly chart
Here is the data for payouts summarized by months.
Note that January 2020 is not over yet.
Nice uptrend here as well, with payouts reaching more than 7k $ per month.
Who received funding?
Below are the payouts per developers/project.
The @howo account is on the top. This account is performing testing reviewing and documenting the upcoming SMT hard fork. The @intertia account is second, with a proposal for documentation for developers, then follows the @steem-keychain account that is a browser extension for Steem.
Conclusion
The DAO concept is a new technology that is being put in work in the last few years. The Steem blockchain is now taking advantage of this technology decentralizing the development of the platform even further. This is just the beginning but as we can noticed the concept is working, projects are being funded/implemented and the development fund is increasing.
The Steem blockchain is one of the few blockchains, that have this mechanism put in place. Having in mind that it is also one of the most used blockchains in the world with dApps with the biggest numbers of users, we can say that these are the most reliable use cases of the DAO concept.
With the DAO put in place, the upcoming communities and SMT Steem is the defacto the most decentralized social media platform build on the blockchain in terms of stakeholders, inflation and development.