Talking about the DAO landscape and future

What is DAO?

DAO (Decentralized Autonomous Organizations), a decentralized autonomous organization, is an organizational form based on blockchain technology that is run and managed by the community through a transparent decision-making process.

DAO makes the community a creator of value and a sharer of value.

Why do we need DAOs?

Decentralization and smart contract-based blockchain are two important characteristics of DAOs.

Decentralization : DAO ownership is usually tokenized and distributed among members, and the issuance of tokens is not centrally controlled by anyone. It ensures that the governance of an organization is no longer centralized in the hands of the company’s top management or board of directors, as it is from a traditional company; it empowers token holders within the DAO organization to make decisions about the organization through voting.

Blockchain technology based on smart contracts : In theory, smart contracts at the technical level ensure the realization of decentralization, and make each transaction of DAO and the operation of the treasury traceable on the chain, which can be viewed by everyone. Open and transparent.

Therefore, the role of DAO in the era of Web3 is equivalent to the role played by the existing corporate organizational structure in the traditional field, and at the same time, traditional business operations will be moved to the blockchain network.

The current state of DAOs

Since the birth of “The Dao” in 2016, it has undergone long-term development; as an extension of the decentralization concept advocated by blockchain technology, DAO has become more and more widely used. Organizations with DAO as their foundation and their own characteristics are becoming more and more perfect and mature, playing an increasingly important role in the Web3 era.

According to statistics, as of now, there are more than 4,200 DAOs, and the scale of treasury assets under management exceeds 8.1 billion US dollars.

Talking about the DAO landscape and future

This article sorts out the functions of different types of DAOs such as management platform, investment, protocol management, asset collection, service, social networking, media, donation, etc., thinks about the existing problems of DAO, and looks forward to the future prospects of DAO.

DAO’s management platform

DAO’s management platform is the DAO’s infrastructure, providing people with convenient and easy-to-use modular tools and solutions, enabling different DAOs to easily start DAO creation, financing, token distribution, online governance, and voting according to their own needs. and other functions; the management platform makes it easier for DAO members to collaborate to complete the operation of DAO.

Related product platforms are: Aragon, DAOStack, DeepDao, ThePass, etc.

Aragon is an early DAO infrastructure with over $190 million in treasury, over 1900 DAOs built with Aragon, with a total locked value of over $500 million, and over 60,000 DAO members using Aragon support.

Each product has some differences in personality in terms of DAO aggregation, NFT issuance, and treasury display. As there are more and more DAOs, the demand for the use of management platforms is also increasing.

Some new DAO issuance and management tools, such as The PASS, are more focused on the NFT community and NFT governance platforms. Compared with other platforms that help various types of DAOs issue tokens, they pay more attention to issuing NFT PASS, helping various DAOs have incentives and Governance approach while more stable development. At the management level, The PASS has also added DAO asset visualization panel Dashboard and voting module, so that DAO members can better collaborate.

Investment type DAO

Investment-type DAOs allow members to pool funds and invest in different blockchain projects (commonly known as DeFi and GameFi projects) to obtain income, playing a role similar to VC; at the same time, through the records on the chain, DAO’s investment income becomes An open account with fair distribution among members.

MetaCartel Ventures, Flamingo, Komerabi are all good examples of DAOs pooling resources, making investment decisions together, and sharing the benefits as investments appreciate.

Asset Collection

Asset Collection DAOs are similar to Investment DAOs, but mainly focus on investments in the NFT field.

Due to the limited volume of the NFT field, consensus-based price discovery is required, so large-scale capital cannot enter in a large area; while the collection DAO has the flexibility of small and medium-sized capital, and at the same time, a more organized and professional form can be added, which can become a curatorial organization , acts as an operating promoter for a specific artist, platform or series of works, which helps to promote the increase of the capital volume of the NFT market and long-term value cultivation.

There are NFT collector DAOs, PleasrDAO, FlamingoDAO, Gremlins, FingerprintsDAO

WHALE, Jenny Metaverse DAO. As a practitioner of the early collection category DAO, the WHALE community has collected more than 16,000 collections, with a total value of more than 120 million US dollars, and WHALE founder WhaleShark has currently collected more than 400,000 NFTs.

The investment scope of the collection DAO can be continuously expanded, such as the purchase of rare historical relics or the franchise rights of entertainment and sports. The transaction records on the chain make the investment behavior more transparent and traceable.

Protocol DAO

The demand for decentralization has caused some Defi protocols (such as Uniswap, Sushiswap, Aave, Curve, etc.) to transfer power from the core team to the community in the form of DAO. Member entry and exit mechanisms are more free.

Tokens are often used to govern protocols, and token holders have the power to propose, vote, and implement changes to the network’s regime. Projects typically vote on how to allocate tokens, leading to community decisions on important rules such as fair distribution, liquidity mining, yield farming, and more.

Protocol DAOs provide a framework for individual mainnets to issue tokens owned and operated by their communities.

Service DAO

With the birth of many related projects in various sectors of the blockchain, such as public chain, Defi, DAO, NFT, etc., sometimes it is extremely critical for good ideas to land at the right time. Therefore, timely docking with mature professionals Needs can sometimes become particularly urgent.

This gave birth to the blockchain talent agency “Service DAO”, which created a channel for project parties to sign contracts with web3 employees, from legal to creative, from governance to marketing, from development to fund management.Professionals earn quest bounties after completing specific quests.

Most of the early service DAOs, such as DxDAO and Raid Guild, etc., focused on bringing talent together to build the crypto ecosystem. Their clients include other crypto projects and protocols, requiring everything from software development to graphic design and marketing.

Service DAO can reshape the way people work in the future, so that global talents can work within their own controllable time, and people’s work history and work skills can be confirmed and accumulated through the records on the chain.

Creator DAO

A DAO was created to bring together people with a common mission or hobby into a community to act in unison for some goal. By issuing tokens or NFT for organizational management, members are motivated to create a valuable community.

Some of these typical DAOs include, Friend with Benefits, IreneDAO, ConstitutionDAO, MoonDAO, etc.

Game Guild

With the rise of GameFi in 2021, countless users or communities will participate in GameFi for profit in the form of Guild game guilds, mostly managed by DAO. The guild has lowered the threshold for players in the encryption field to participate in blockchain games, and has become a better medium between games and players. It is an important promoter of the prosperity of the GameFi market by mining high-quality games and guiding players to make profits. 

The leader in the GameFi/P2E game guild field is the Yield Game Guild. Some time ago, YGG just surpassed 20,000 students. In addition, there are hundreds of guilds including YGGSEA, Good Games Guild, Merit Circle, etc.

Media DAO

Media DAO reshapes the way content producers, consumers and media interact in a decentralized way. Instead of relying on ad-based revenue models, these DAOs use token incentives to reward producers and consumers for ownership of a given content.

For example, Bankless is an Ethereum-focused media outlet that produces popular podcasts and newsletters. The Bankless team airdropped BANK tokens to their audiences, allowing readers to take an active role in media channels and earn extra through content production, research, graphic design, article translation, marketing services, and voting on key decisions that guide the DAO BANK.

In order to break the model based on advertising revenue, Media DAO readjusts the distribution of benefits between readers and producers.

Grants/Charity DAOs

Donations are the first practical case of a DAO, where the community donates funds and uses the DAO to vote on how to distribute the funds to various contributors in the form of governance proposals.

The governance of the Grants DAO was initially carried out through non-transferable shares, meaning that the primary motivation for participation was social participation rather than financial returns.

Gitcoin is a precursor to this model, funding critical open source infrastructure where funding may be difficult. Similarly, large protocols such as Uniswap, Compound, and Aave have specific delegated DAOs that allow the community to vote on how to deploy their treasuries to pay builders and developers to advance the protocol.

Charity DAOs are also starting to emerge to reimagine how charitable giving is done. For example, the Dream DAO issues NFTs to raise funds, and then lets NFT holders vote on how to allocate those funds to the DAO’s mission (funding Gen Z’s civic leaders).

Commonly used DAO auxiliary tools

At present, a series of DAO auxiliary tools are becoming the standard used by most DAOs today.

  • Gnosis Safe – Multi-signature wallet commonly used to manage community treasuries.
  • Snapshot – Off-chain voting platform for easy token-based governance.
  • Discourse – A forum commonly used to discuss governance proposals.
  • CollabLand – A bot that provides token-gated access and prompts for community chat groups.
  • Coordinape – Coordinate games to determine which contributors should be rewarded with tokens.
  • Parcel – Money management to easily track and send payments.
  • SourceCred – Tracks instances of community engagement and rewards active members.
  • Mirror – Financing creative projects through tokenized crowdfunding.
  • Tally – Governance dashboard to track on-chain voting history for different protocols.
  • Boardroom – A governance center managed by token holders to empower key decisions.
  • Sybil – Create and track on-chain governance delegates.
  • RabbitHole – Reward tokens for completing certain on-chain tasks.

Barriers to the Development of DAOs

The DAO, the organizational primitive of Web3, will reshape the way we manage, invest, work, and create in the future.Given that DAOs are essentially tasked with refactoring hundreds of years of experience drawn from democracy and corporate governance, the extent of the challenge is obvious, and the development of DAOs has to focus on several major flaws:

  • There is a lack of clarity of laws/regulations, and there are no relevant legal provisions in many countries and places, and it is in the blind spot of legal supervision.
  • Lack of an effective coordination mechanism: A resolution that allows all people with voting rights to vote for a decision may reduce the efficiency of decision-making, and some modes of authorized voting are being explored.
  • Lack of scalable infrastructure: On the one hand, every DAO needs to build most of the similar infrastructure and governance tools from the base, so a basic operating system is needed; on the other hand, the tools provided by the management platform are the same, and most platforms cannot Provides a customizable DAO management solution.
  • Vulnerability risk of smart contracts: It may cause major losses to the treasury and user assets.
  • Intra-community divisions: The forks of Bitcoin and Ethereum in history show that intra-community divisions can cause huge chaos.
  • Continued development of the DAO: In times of uncertainty and market downturns, many people may have less confidence in the DAO

The future of DAO

Although DAO has experienced some failures and faced many challenges in the development process, with the exploration and practice of DAO in recent years, more mature thinking and solutions have been accumulated; it is foreseeable that DAO will Continuing to reshape the way of human organization in the era of Web3, more efficient and successful organizations and company forms will be established on the open encrypted network based on DAO, and play an increasingly critical influence in the global market.

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Posted by:CoinYuppie,Reprinted with attribution to:
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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