The blockchain is a ledger of all transactions in the digital world that have ever occurred using Bitcoin or other cryptocurrencies. Each transaction is recorded onto the blockchain and can’t be changed, making it almost impossible to alter a transaction after the fact. But what does this mean for you? If you own Bitcoin, then you own your cryptocurrency and any transaction that has taken place since its first use in 2009. The DAO (Decentralized Autonomous Organization) is an organization that uses Ethereum as its network. It’s created with a set of smart contracts and decentralized applications (dApps) on top of Ethereum, giving it a great chance at success. So what is a DAO? Read on to find out!
What is DAO (Decentralized Autonomous Organization)?
DAO (Decentralized Autonomous Organization) is a blockchain-based project that allows for the creation, management, and issuance of digital assets. DAO was created as a platform for the development of decentralized applications (dapps). it is essentially a digital asset that represents a share in the profits of an organization. You can invest in DAO through a DAO wallet or through a DAO exchange.
The community behind DAO consists of everyone who owns or uses dapps. That’s because your influence on the project is determined by how many DAOs you hold. If you own 1% of all dapps on the platform, then you’ve got 1% of all voting power over the future direction and development of the entire platform.
So what does this mean? Well it means that if you want to get involved with an influential project like DAO, now’s your chance!
How do you become an owner of a DAO?
Ownership in a DAO is achieved by purchasing tokens through an ICO, which is a type of crowdfunding. The tokens are given to the investors in exchange for their investments, and they can then be converted into an ownership share of the company. This share will entitle you to voting rights on major decisions for the company and it gives you the ability to influence what happens within the company.
The ownership shares are further divided into fractions based on how much money was invested during the ICO sale. The more money you have invested at a certain time, or your relative position in relation to others who have invested in the same round of funding, will determine how many total votes you have within that round.
To become an owner of a DAO, you must purchase tokens and register them with a smart contract. Once this is done, your tokens become tradable on exchanges as well as being able to vote on important decisions for the company.
How to get Involved/Participate in DAOs
Once you’ve found a project of interest, it is important to figure out the core function of each DAO. This can be done by reading the whitepaper or visiting their website for more information. For DAOs focused on technical governance, understanding what voting rights are granted to token holders and how proposals are at stake is an essential step in knowing how to get involved.
In some protocols, such as Uniswap and Compound, token holders can vote on distributing a portion of the fees that the protocol collects amongst themselves. In other protocols, such as Basic Attention Token (BAT), token holders can vote on distributing these protocol fees towards bug fixes and system upgrades.
You have the option to swap governance tokens or pay attention Snapshot votes. Or, you can join Discord of the DAO and take on real projects that are compensated for their contribution.
How does a DAO work?
Transactions in a DAO are recorded on a blockchain. This means that each block contains information about the purchase and ownership of assets in the Dao. Blocks can be viewed, but cannot be changed or amended. Cryptocurrencies have become popular due to their security features.
The DAO is a platform that operates under the rules set by a core team of community members. These rules are highly visible and verifiable, so any potential member can understand how the protocol is to function at every step.
After the rules are formally written onto the blockchain, it is necessary to figure out how to receive funding and how to bestow governance. Tokens are issued by the protocol in order to raise money and fill the DAO treasury.
Token holders are given certain voting rights as part of the DAO launch. These rights usually depend on how much money they have invested in the DAO, and how much weight their contributions carry. Once funding is completed and the DAO is ready to be deployed, token holders will have these voting rights.
What are the benefits of using a DAO?
1) Decentralization. A DAO is a self-governing group, where members (people or computer programs) vote on the way to achieve their common goal. A corporation is formed and guided by a board of directors, and can be hacked or even taken over by any one of its investors. DAOs, however, are a self-governing entity in which everyone has equal input.
2) Transparency. A DAO creates a publicly accessible ledger, and those transactions are publicly recorded and signed by members in the blockchain. Any disagreement can be decided through voting, which eliminates any possibility of collusion.
3) Efficiency: DAOs are a great way to collaborate globally. The technology makes them truly borderless, which makes it easy for everyone to work with each other. There are specific rules of participation that everyone is familiar with and agrees upon before launching the DAO. These rules ensure that all stakeholders will be on board with the decision-making process.
3) Accountability. A DAO has no shareholders to look out for. However, it can choose to be audited by external parties.
Some DAOs Examples Checkout
DAOhaus: is a platform for launching and running DAOs. It’s owned and operated by the community, so you can be sure that your queries, suggestions, and insights will be heard!
RaidGuild: service-based DAO was inspired by the MetaCartel network. This is a deep-seated web3 network that’s well entrenched in the tech world. If you want to offer your skills and abilities to this guild, they’re looking for quality talent who can help with product slaying!
MolochDAO: OG DAO is a governing body for the Ethereum ecosystem. It awards grants to advance the Ethereum ecosystem, and if you would like to become a governing member and contribute to this group, you can fill out this application.
MakerDAO is a platform for distributing and managing goods and services with no bias or external influence. You can become involved in governance by voting on changes to the Maker protocol.