ICO, DeFi, NFT, there is always a new bubble in crypto. But there is one bubble we haven’t seen yet. And when it happens, it’s going to change the world. I am talking of Decentralized Autonomous organizations. (DAOs).
A DAO is a voting smart contract. Participants use the DAO smart contract to create and vote on proposals. Let’s see some specific use cases.
There are currently more than 100 DAOs And The biggest use case is for governance of DeFi protocols. This can be viewed as a crypto version of a board of directors. Protocols like Maker, Uniswap, Compound or Aave all have a DAO. The DAO is used to vote on how to use the treasury, on the evolution of the protocol, and on protocol parameters. To participate in a governance DAO, you need to have governance tokens. For example, for Uniswap, this is the UNI token. The more tokens you have, the more voting power you have. Generally, to create a proposal, you need a minimum amount of tokens.
The next type of DAO is investment DAOs, like Metacartel. In an investment DAO, participants pool their money in a smart contract, and vote on where to invest the money.
We also have Grants DAO, which are used by Blockchain projects to support their ecosystem. F or example, there is the Uniswap Grant DAO, and the Aave Grant DAO.
We also have Collector DAOs, which are focused on collecting NFTs. For example we have PleaserDAO, and Flamingo.
And a last type of DAO is social club DAOs. One example is Friends With Benefits. In this kind of DAO, the goal is to grow a community and have the community create products valuable for the community . All these DAOs are hiring if you are looking for a job and you are open to a non-traditional kind of employment, you can consider working at a DAO. If you want to create your own DAO, you can use DAO creation like platforms like Aragon, Colony, Gnosis Safe, Moloch or DAOStack. Or you can code your smart contract from scratch if you need more flexibility.
Now that you know what is a DAO, how is it going to change the world? I believe that Governance DAOs have the most potential. In the future, more and more companies will be operated as a DAO, and we might even see some government governance mechanism transferred to DAO. The state of Wyoming has even created a legal status for DAOs. I am curious, why do you think is the best use case for a DAO? And is your favorite DAO in the space? Let me know in the comments below.
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