DAO can be said: the magic door of DeFi, NFT and GameFi

A week ago, Alice Ma and many Twitter netizens saw the news that Sotheby’s was about to auction a copy of the U.S. Constitution. They were worried that those rich men would take it for themselves after they took it, so they proposed: “Why don’t we buy it together!” “. After a few long talks with her friends throughout the night, Alice Ma and her friends gradually turned this joke into a mature idea, and they really decided to participate in this auction!

This is the origin of the decentralized autonomous organization ConstitutionDAO. In 6 days, members raised 40 million U.S. dollars around the world. Although the auction was unsuccessful in the end, the auction itself was exciting enough: these more than 40 million U.S. dollars came from 17,437 donors, the median donation amount The number is US$206.26, and many of the participants are using encrypted wallets for the first time and watching auctions for the first time.

DAO is such an idealistic organizational form. It is a kind of free connection based on “interesting relationship”, which fits the current cyberspace and even the future Web3.0 world.

In the recent Metaverse and Web3.0 upsurge, DAO’s indispensable position in the virtual world has gradually become prominent. As a low-level design, DAO seems to be able to be combined with various hot spots, so it has unlimited imagination. Nowadays, DAO governance has basically become the standard configuration of projects on the chain, and various vertical subdivision projects are emerging one after another, and they are gradually developing into “organizational Lego”. According to deepdao data, as of November 18, the DAO Ecological AUM was USD 13.7 billion, with 1.4 million token holders/community members, and it has become an influential section.

DAO can be said: the magic door of DeFi, NFT and GameFi

DAO ecology at a glance Source: medium

So, what exactly is DAO? What kind of vision does it propose? What are the current DAO projects worthy of our attention?

Future-oriented DAO

DAO (Decentralized Autonomous Organization, Decentralized Autonomous Organization) is a brand-new organization collaboration method. It enables the organization to realize self-operation, self-governance, and self-evolution in accordance with pre-set rules through intelligent management methods and token economic incentives. , Without being controlled by centralized institutions.

Specifically, DAO has both decision-making capabilities and execution capabilities: it can perceive members’ collective wishes, make decisions gently and smoothly, and incentivize members to cooperate in execution with minimal trust costs through methods such as tokenizing decisions. To achieve the collective goals of the DAO. At the same time, all economic activities and rules of DAO are recorded on the blockchain, without the participation of a third party, which makes DAO highly independent.

All in all, DAO replaces the traditional power center with smart contracts, and decentralized autonomy replaces the bureaucracy, which in turn enables the organization to achieve maximum efficiency and value transfer. DAOs with the above characteristics may become one of the requirements for supporting Metaverse and Web3.0.

We know that Metaverse is a concrete Internet, a more immersive virtual world built on the basis of Web3.0. It should have a fairer economic system, a more decentralized power structure, and more free and full connections. How to build such a world? In terms of social organization, DAO gave a very ideal plan.

The connections between DAO members are meshed, so they can communicate more freely and fully. The roles of members in the organization can also change frequently and fluently. Such a networked structure is very suitable for Web3.0. Web3.0 is open source and programmable. “Organizing Lego” DAO can form a team based on needs, customize and call various smart contracts in Web3.0, and combine the infinite possibilities of the Metaverse. Web3.0 is also an Internet owned and defined by users and builders. It will not grow a strong centralized organization with the accumulation of product users and data, but will be more fair, trustworthy and free through the DAO organization. And vigorous social collaboration.

Of course, the full implementation of DAO, Metaverse and Web3.0 still requires patience. Let’s take a look at the current development in this field. As a low-level design, DAO is connected to many outlets in the encryption market. It can be said that DAO is the intersection of the major popular sectors of the encryption market. The following will give an overview of the development of DAO from DeFi, DeFi2.0, NFT, GameFi and other fields.

DAO×DeFi: The Key to DeFi’s Evolution

DAO mainly appears in two forms in the DeFi field. The first is Venture DAO, which focuses on investing in DeFi projects. Through the DAO organization, individual forces are brought together and collective wisdom is used to reduce investment risks. This type of DAO can look for and discover investment opportunities in the DeFi field, aggregate funds and screen projects within the organization through voting mechanisms and smart contracts, and then provide liquidity for target projects and earn income. Representative organizations include ForceDAO, AladdinDAO, etc.

Venture DAO is not only active in the DeFi field, but they can be seen in all popular investment sectors. Compared with traditional investment tools, Venture DAO’s design is more fair, transparent, and meritocracy. In these DAO organizations, each member can make investment recommendations to the DAO, and select high-quality projects for the community through a competitive mechanism, which means that the decision makers have changed from being a single leader to relying on community voting and consensus. This allows Venture DAO to integrate the wisdom of various fields while enjoying the social capital and network of its members.

The other is that DAO becomes a collaborative entity that helps build agreements. In other words, DeFi projects directly adopt the DAO governance model to allow token holders to participate in the ecology and share the benefits of financial derivatives. In such a project, token holders, as community members with decision-making power, can design and optimize protocols and applications through proposals; and the use of DeFi products in the organization as a method of payment and distribution also makes DAO more devoid of Centralization and digitalization. Organizations in this field include MakerDAO (MKR), SynthetixDAO (SNX), etc. With the development and evolution of DeFi, this model is being adopted by more and more projects.

The current DeFi is undergoing an iteration, and the concept of DeFi 2.0 has begun to be discussed and practiced continuously. DeFi2.0 is committed to turning liquidity into the infrastructure layer of DeFi and achieving sustainable development. Whether to adopt the DAO governance model has become one of the standards defining DeFi1.0 and DeFi2.0.

DeFi2.0 needs to have a more Crypto organizational form and governance structure, that is, a true decentralized governance: the ecological governance and decision-making powers are handed over to community members, all members are connected entities, and participants have the source of motivation, so as possible To avoid the project being dominated by giant whales, it also minimizes the risk of governance token holders changing the agreement. At present, the most popular DAO in the DeFi2.0 field is OlympusDAO, and there is a view that most participants in the DeFi2.0 project Tokemak in the future will be some DAO organizations.

DAO×NFT: A community with temperature and resonance

The combination of DAO and NFT has brought about the evolution of governance model. At present, most DAOs vote and govern by holding ERC-20 tokens, but under this mechanism, governance participants have to become investors, and even governance may be controlled by speculators. Therefore, some DAOs choose to use NFT to vote, so that each member can enjoy more fair governance rights.

At the specific application level, many freshmen DAOs have focused on NFT collection and investment in the past two years, and cultivate and expand the value territory of NFT through the power of the community. In addition, because some high-priced NFTs are not friendly to individual investors, many fragmented bidding DAOs have emerged. In this type of DAO, members have the right to jointly determine the NFT artwork to be invested, and they can split the purchased NFT, borrow, curate, or use it as collateral on other DeFi platforms. Representative organizations include PleasrDAO, PartyDAO, etc.

Participants of the NFT project are also interested in activities other than finance. Therefore, there is a rich DAO ecology in this field, creating communities with warmth and resonance. For example, in some social DAOs based on NFTs, people who purchase the same NFT collections form communities with specific identities to maximize social capital. This summer, BAYC, CryptoPunk and other NFT avatars were repeatedly sold at sky-high prices, which is enough to see the strong appeal of the community.

There are also some content production and publishing platforms that are establishing a creator economy through DAO. The basic model is: use NFT to tokenize digital content ownership, forming a closed loop of content-based production, investment, transfer, and consumption; and around content The gathered people formed a temporary DAO to collaborate on decentralized content production. This loose and heterogeneous connection makes creation more dynamic.

DAO×GameFi: The future of the Metaverse has come

GameFi games, especially a batch of Metaverse games that have emerged recently, are trying to create a completely decentralized world. This type of game itself is governed by DAO. Players can vote to determine how the game world operates, fully own the in-game props and assets, and ultimately own the game itself.

In addition, the popularity of GameFi is also inseparable from the promotion of some service DAOs, such as game guild YGG, Merit Circle, etc. Service DAO provides resources, facilities and talent support for GameFi, and a large group of players can agree on better platform policies and game design.

Take YGG as an example. This is a DAO composed of tens of thousands of gamers whose number is still increasing. Members use NFT in P2E games to create real cash flow for the community, while continuing to screen and identify new projects. , So that the community and ecology continue to grow and develop. In addition, the YGG Association uses token issuance to transform participants into owners and managers of the entire ecosystem of the YGG Network, and brings more flexibility and scalability to the Association through the subDAO model. From the current point of view, a community governance mechanism such as the service DAO can stimulate more players’ enthusiasm for participation, and can also adapt to changes in technology and market trends.

GameFi is one of the important entrances of Metaverse, and it is also the furthest field of all Metaverse applications at this stage. Various game projects and related DAO organizations continue to expand their community members in the digital world, issue tokens and establish governance systems to form a unique economy… The various designs and practices of GameFi seem to indicate that the future of the Metaverse has come.

Concluding remarks

It can be seen that DAO has formed a relatively complete organizational form in many fields and can operate effectively, and the DAO organization can continue to empower itself during operation: a successful action can promote the appreciation of governance tokens and stimulate members At the same time, it will attract more people to join the DAO. This will form a feedback loop and promote the continuous formation of better decision-making and a more sticky community culture within the organization.

However, the current DAO organization still has some problems, such as security risks caused by open source code, changeable group psychology and gullibility, etc. In addition, for most participants, it is not easy to “hear” their opinions. This is not a fair rule design that can evenly distribute the rights of each participant. Furthermore, if the problem of the right to speak cannot be solved, how can the activeness of participants be ensured? On the other hand, the independence between various DAO organizations is relatively strong, and each DAO has its own rules and goals, and operates independently. It can be seen that the current DAO needs to further explore its openness whether it is within it or between various DAO organizations.

In response to the above problems, some new projects and organizations are proposing their own solutions, and technological advances in various aspects such as infrastructure in the encryption field will also promote the development of DAO. It is undeniable that the current DAO is a vibrant field. We may wish to look forward to the future of DAO together.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/dao-can-be-said-the-magic-door-of-defi-nft-and-gamefi/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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