What is DAO?
DAO is usually considered to be a decentralized form of a company or entity organization. Although it is more business and practical to understand DAO from the level of company or entity organization, we need to make it clear that DAO is not a specific organizational entity, but a general organizational form.
DAO’s management and operating rules are encoded on the blockchain in the form of smart contracts, so that it can operate autonomously without centralized control or third-party intervention. Through intelligent management methods and token economic incentives, self-operation, self-governance, and self-evolution are realized, and the maximum efficiency of the organization is realized.
In addition, all resolutions will be decided by voting on the proposal, which will ensure that everyone in the organization can freely express their opinions.
Compared with traditional organizational forms, DAO is more secure and stable, because no one can control the entire organization. Moreover, since DAO runs on a permissionless, decentralized blockchain technology, it can remain autonomous without interference from external factors.
The background of DAO
The labor movement emerged after the Industrial Revolution, when workers organized to fight for their common interests and negotiated with employers for better working conditions and salaries. The legacy of the labor movement is all around us, including minimum wages, abolition of child labor, equal pay for equal work, fair employment, family leave, etc. These rights were not delivered by themselves—they were won by organized workers.
In the past few decades, the number of union membership has fallen sharply, from 36% of US private-sector workers in the mid-20th century to 6% in 2019. There are many reasons for the decline, including employers’ resistance to trade unions and reduced government support.
Number of union members in private enterprises in the U.S. from 1929 to 2019
At the same time, most of the productivity gains went to capital, and workers did not share in this economic growth.Despite the victory of the trade unions, there are also some controversies: before the civil rights movement, many trade unions systematically excluded workers of color. Some unions are disturbed by corruption and corruption, which distort their original purpose.
Some critics point out that as unions themselves become centralized bureaucracies, they tend to do too little because of opposition from their members.
The development of decentralization has brought hope to the labor movement in the new century. The DAO, an Internet community with shared ownership, can play a role similar to a trade union, representing the collective interests of its members, and promoting beneficial policies and mechanisms.
Compared with trade unions, the transparency of DAO governance and on-chain capital flows reduces the risk of corruption and corruption, because the inflow and outflow of funds are visible. Open rules on member access alleviate institutional discrimination.
Many people believe that with the growth of the network, the size of the DAO will exceed the largest existing company.Of course, the DAO will face a series of challenges, including expansion, governance, and how to balance the interests of capital providers and active contributors. But there is no doubt that DAO represents a convincing new paradigm that is different from stakeholder supremacy, and this new paradigm benefits workers.
Factors driving DAO value growth
1. Effective incentive mechanism
It is important to understand how members’ contributions are rewarded in DAO. Generally speaking, allocating governance rights and rewarding contributors or profit shares can motivate members to contribute to the DAO and actively participate in governance. This in turn makes the organization more efficient.
2. High voter participation rate
The factor driving the growth of DAO’s value is not only the contribution made by each member to the DAO, but also the active participation of more members in governance, which enables the organization to continuously adjust and improve.
3. Continuous delivery project
If the DAO implements a good incentive mechanism and members actively participate in contributions, then the DAO should continue to deliver its projects and make proposals. A DAO that regularly promotes project development usually means that the DAO is good in terms of collective participation, execution capabilities, and long-term value-added potential.
Common DAO tools
1. Service DAO
Twitter @YieldGuild Number of followers: 1093k
Discord @Yield Guild Games Number of members: 70,961
Unlike some of the above-mentioned NFT DAOs that are concentrated in the field of art, Yield Guild Game (YGG) has established a YGG DAO composed of players and investors in a decentralized game. NFT profit.
The company behind YGG is a Manila-based game studio founded by Gabby Dizon, a member of the team that launched Axie Infinity and Yearn Finance Communities. The co-founders of the studio are also entrepreneurs from the University of Cambridge, co-founder of CapchainX, former chairman Beryl Li, and blockchain developer, Owl of Moistness, one of the developers of the Axie Infinity algorithm. The YGG team currently has more than 20 members, and Nolan Manalo (also known as Nate) is the person in charge of game operations.
YGG DAO mainly earns profits by directly or indirectly renting or selling NFT assets owned by YGG. Guild members can use guild assets to directly earn in-game rewards for YGG. And third parties (non-guild members) can use in-game assets to earn profits, such as conducting economic activities on the in-game land, thereby generating income.In this way, the ownership of the NFT will appreciate as the economic value of the assets in the game grows, which also reflects the value of the NFT held by the holder in the open market. In addition, players can also earn revenue by participating in the game.
The total supply of YGG is 1 billion pieces. 45% of them have been reserved and will be gradually allocated within four years to support YGG community operations; about 40% will be allocated to investors (24.9%) and founders (15%); the remaining 15% will be used for the company’s Finance and advisory.
For security reasons, YGG has established a sub-DAO to carry the assets and activities of a specific game. The assets in the sub-DAO are purchased, owned and controlled by YGG Vault through a multi-signature certified hardware wallet to ensure maximum security.
2. Collection DAO
Twitter @PleasrDAO Followers: 311k
(Data source: DeepDAO)
PleasrDAO is an NFT DAO established to jointly raise funds and purchase high-value NFTs. The capital contribution and digital asset ownership are shared by PleasrDAO members.
The original goal of PleasrDAO was to crowdfund the purchase of Uniswap V3 NFT artwork “x*y=k” (commemorative video created to welcome the update of DEX-Wniswap) designed by 3D digital artist pplpleasr from New York . After buying the UNI V3 NFT, PleasrDAO made the headlines in mainstream media with the purchase of Edward Snowden’s only piece of NFT digital artwork called “Stay Free”. On April 16, 2021, PleasrDAO purchased the first Snowden NFT officially issued at the Foundation auction at a price of 2,224E. The price set the highest record in the history of Foundation auctions. The purchase funds were subsequently donated to the Press Freedom Association to promote Transparency and decentralization of news within the media.
PleasrDAO will continue to purchase and commission NFT artworks, while investing in decentralized finance, incubating new products, cultivating new digital artists, and making angel investments in the digital market.
3. Investment DAO
Twitter @FLAMINGODAO Followers: 312k
(Data source: DeepDAO)
Flamingo DAO expands DAO funds mainly by studying emerging investment opportunities on the chain. Adhering to the firm belief that blockchain collectors are a new round of investors and curators, Flamingo DAO believes that turning to research on digital property ownership will play an important role in creating a unique and unknown digital content market and consumption method.
The goal of Famingo DAO is to have a place in the digital market, especially the promising blockchain art market recently. Members of Famingo DAO have the opportunity to incorporate personal NFT assets into the DAO treasury, thereby obtaining credit lines secured by digital assets. In addition, after becoming a member of the DAO, investors can enjoy a variety of benefits. For example, members can display their NFT in the DAO Digital Gallery, store the NFT in the DAO vault for maximum security, split the NFT, or use it as a guarantee in other DeFi platforms.
Members can get a certain percentage of premium income based on DAO shares.
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Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/a-quick-understanding-of-dao-and-its-eight-categories/
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