An insight into decentralized organizations
Blockchain technology, web3 services, and digital payments are becoming more and more prevalent. The existing hierarchical world’s governance standards cannot be followed by new businesses and communities that use and manage blockchain initiatives.
Decentralized autonomous organizations, also known as DAOs, are a new method of funding projects, controlling communities, and sharing assets that are being established by these new corporate entities. Web3 technology and quickly developing governance and incentive systems are used to spread decision-making authority and monetary rewards instead of the conventional top-down hierarchical structure.
We have already discussed what DAOs are and how they differ from the current hierarchical order that prevails in the majority of businesses today.
When creating a DAO, one must decide on the governance model that the DAO will be built upon. This includes questions like: how many members will the DAO have, what type of voting system will it use, how will it handle conflict resolution, and how often it will need to update its governance model.
Every DAO needs to choose a voting model that will be put in place whenever members need to make a decision. Several models already exist, but none of them is ideal yet. They work best when the issue at hand has a simple “yes” or “no” solution. But when it comes down to more complex issues where a longer discussion should be held, the current DAO voting mechanisms are not completely successful yet.
‣ The most common type of DAO currently
‣ Focus on the governance of decentralized protocols
‣ Utilisation of smart contract protocols for offering DeFi services
‣ Examples: MakerDAO, Uniswap, Yearn Finance, GoCrypto DAO
‣ One of the most important types of DAOs
‣ Primary focus on collecting funds so that the community can have ownership of blue-chip NFT and other digital collectibles
‣ Examples: Flamingo DAO, Fingerprints DAO
Investment DAOs (aka. Venture DAOs)
‣ Raising funding for a particular project
‣ Work similar to traditional investment funds
‣ Pool the funds for investments in early-stage blockchain and crypto projects
‣ Offer an exclusive avenue for investments in new web3 protocols and off-chain investments
‣ Examples: MetaCartel Ventures
‣ The less common type of DAO currently
‣ Focus on supporting social responsibility initiatives
‣ Examples: Big Green DAO, Angel Protocol
There are additional DAO types, such as Social DAOs, Media DAOs, Entertainment DAOs, and more, but these are the most common.
The GoCrypto 2.0 decentralized payments protocol that will enable decentralized payments driven entirely by smart contracts will also take the form of a DAO. The complete governance of the revolutionary protocol will be given to its DAO members who will make sure that it develops in the direction preferred by the crypto community.
Holders of the GoC token will be able to create their own account inside the GoCrypto 2.0 protocol, mint NFTs, stake GoC and leverage the NFT power for a role in the DAO governance.
DAOs will likely be shaped by DeFi trends as many DeFi protocols are organized as decentralized autonomous organizations. As DeFi continues to grow and become more mainstream, we can expect to see more DAOs being created to manage these protocols.
Another trend is the development of more sophisticated DAO structures and governance mechanisms. As DAOs become more complex, there is a growing need for more advanced decision-making processes and better ways to incentivize participants to contribute. Some DAOs are experimenting with new voting mechanisms which can help to prevent majority tyranny and give more power to minority stakeholders.
The regulatory framework will certainly play a big role in the future of DAOs. Although legislation concerning DAOs remains scarce, some laws are already being introduced. Regulators are currently trying to fit these new organizational structures into a traditional company registration framework which cannot produce a positive outcome. Technologists, regulators, and entrepreneurs will need to work hand in hand in building a regulatory framework around the revolutionary decentralized technology to provide digital businesses with a bright and optimized future.
Overall, the future of DAOs is likely to be shaped by continued innovation and experimentation, as well as increasing interest and adoption from a wide range of industries and communities.
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