What the DAO?🤔
A DAO 101 that you needed this week 🍩 Looking at web3 beyond cryptocurrencies and NFT art projects:
Gm Gm Readers!🍩
This is web3 bits n bytes - back after the Blockchain India Week 2022 which I feel is not over yet 😅
Loads of learning, networking, building and shipping to look back to. And that’s what we do at Bits n Bytes. Get you the best crypto snacks in town every week.
So what do we have on the menu this week?🍟
If you’ve been following this space, you’d agree that web3 is not just about crypto and art NFTs. The technology backing this decentralised version of web goes much deeper from both an infrastructural and utility perspective.😬
How many of these categories have you heard of / know already?🤔
There’s a whole set of projects which have reduced the decentralized web to merely just cryptocurrencies and NFT sans any utility. 🙁
This over simplification creates bias, and inhibits a wider audience from identifying and exploring more expansive uses of the emerging technology and normalizes intellectual shortcuts.🤕
While there’s abundant information and threads on twitter, Reddit and micro blogging sites, they’re also filled with scammy☠️, clickbait posts 🔴 that reduce web3 to merely a ponzi scheme or a speculative meme coin shilling scheme.⚠️
Oh wait, there’s more👀
How many of you have actually explored the concept of DAOs or know exactly what it is?👀
More of a misnomer (coz it’s not always as automated as you might expect). But definitely an important toolkit for re-imagining governance across a plethora of domains.🤩
But, bruh, what is a DAO?🤔
Decentralized Autonomous Organizations (DAOs) are a new kind of organizational structure that run as code on blockchains.🧐
They're owned and run by members who hold tokens that provide decision-making rights and/or economic rights in the organization👩👩👧👧
They enable trust-less and decentralized collaborations by coding governance rules.🤩🤩
DAOs are used to make decisions in a bottom-up management approach.⏫
They allow members from anywhere in the world to pool capital and code rules for how they would allocate the capital. 🤑
Governance is meant to be automated by code and de-centralized. Though most of this remains theoretical as governance smart contract technology is still fairly rudimentary.👩💻
With questions concerning accountability, how the emerging web3 space should be governed, and how DAOs can be used as a vehicle for entrepreneurship in the digital space, it is worth considering their growing importance.📈
📌Entrepreneurs are following the money by building themselves up as DAOs.
📌Buildoors are coming together to start a DAO to have strong dev community and it’s slowly catching up across a lot of domains.
📌Investors are also setting up funds as DAOs, with some notable ones including Orange DAO, VC3DAO and BessemerDAO.
🤌There’s even a DAO called Bhatura DAO - It’s a corner on the internet where builders unite out of love for bhatura and ship like they eat chhole.
How do DAOs work?🤔
DAOs rely heavily on smart contracts👩💻
👉These logically coded agreements dictate decision-making based on underlying activity on a blockchain.
For example, based on the outcome of a decision, certain code can be implemented to increase the circulating supply, burn a select amount of tokens, or issue select rewards to existing token holders.
Things to note👇
There is no central authority of a DAO - Power is distributed across token holders who collectively cast votes.
All votes and activity in a DAO are recorded on a blockchain, making all actions of users publicly viewable.
Are DAOs the business structures of the future?
They definitely are on the digital agenda 👀
👉DAOs promise new forms of organization structures and collaboration in the digital and global space.
👉As significant digital value is created, through NFTs/metaverse, DAOs have huge potential to be the native entity for value creation in cyberspace.
👉Many blockchain protocols are built as global collaborations across borders.
They’re providing a path towards community governance for any kind of organization - group of folks who like to build, folks who like to design or just folks passionate about a common goal.🤩🤩
How can you join a DAO?🤔
DAOs are community-led organizations that share common goals, from making profitable investments to building impactful products - the possibilities are endless.
Read on to find out how can you find and join DAOs in this space
1️⃣Understand your goals 💁♀️
DAOs are highly mission-driven. Your personal interests and expertise should play a key role in whichever organization you plan to join.
2️⃣ Find a DAO that aligns with your goals🙌
DAOs are extremely diverse. You can start with exploring DAOlist and DeepDAO to find one with objectives that align with your interests.
Most will have some form of goal or a mission statement that outlines their goals, guidelines. and governance.
These can give you a basic idea of what to expect and how you can contribute to that DAO.
3️⃣Join the community👥
You’ll get a better sense of a DAO’s culture by participating in the community.
The most common entry point is via the DAO’s Discord, where you can introduce yourself, get involved in conversations, and learn how to contribute. Take your time to learn how you can help.
4️⃣Get involved👩💻
DAOs are particularly popular for developers, but they can benefit from a range of other skill-sets - Project Management to Design to Community Managers and much more.🤩
Your contribution will depend on your abilities, as well as the community’s needs and governance.
So make that effort to find out opportunities within the DAO and see where your skilset can help the DAO progress further.💪
5️⃣But, Be careful⚠️
DAOs provide democratized governance, transparency, pooled resources, and the chance to make a real impact — and cash.🚀
On the other hand, there is also potential to lose money and for code to go wrong. 😵💫
Decentralized Autonomous Organizations can turn out to be regulatory nightmares, especially due to the lack of any definite rules and regulations for taxation and management of DAOs.
A community-based model not only imposes the burden of an extended transaction time and voting process but also takes away a bit of accountability. 😬
But if they live up to their promise, perhaps one day a DAO will run a team at the Super Bowl — rather than just advertise there. 👀
Nonetheless, DAOs are a massive force in the emerging web3 ecosystem. As with all technological advances worth nurturing, DAOs will continue to grow bigger, stronger, and more diverse. 🚀🚀
We will witness many improvements in the design of DAO over the long term in the future. 🤩🥳
The world is definitely down to DAO 🤓
Are you?🤔🤔
Well that’s a wrap for today! To munching more crypto snacks 🥂🍩
If you want more web3 gyan, then, be sure to follow us on Twitter (@Web3_BNB)
Adios 👋
How'd you like today's web3 Bytes?
Let me know in the comments