What is a decentralized autonomous organization (DAO)? What does DAO mean?
What is a DAO? Decentralized finance is often called defi, which is very popular in the current era. This has led to the discussion of Dao among blockchain and cryptocurrency enthusiasts. DAO differs from other systems in that these rules are written into the organization's code. DAO uses smart contracts, which are algorithms that run based on specific criteria that are met. The following is an overview of DAO.
DAO, a decentralized autonomous organization, is a community led entity without central authority. It is completely autonomous and transparent: smart contracts lay the foundation rules, implement agreed decisions, and at any time, proposals, votes and even the code itself can be publicly audited. Finally, a DAO is completely governed by its individual members, who jointly make key decisions about the future of the project, such as technology upgrading and financial allocation.
Generally speaking, community members will make suggestions on the future operation of the agreement, and then get together to vote on each proposal. Proposals that reach a predefined consensus level are then accepted and executed by the rules instantiated in the smart contract. Under this framework, the hierarchical structure common in large companies gives way to community collaboration. Each member of the DAO oversees the agreement to some extent.
The elegance of this framework lies in the consistency of incentives. In other words, it is in the best interests of individuals to simply approve proposals that are in the best interests of the Protocol itself. A healthy and robust protocol will be used more, which in turn will increase the value of tokens owned by each DAO member. Therefore, as the agreement succeeds, the token holder will also succeed.
The rules of DAO are established by the core team of community members through the use of intelligent contracts. These intelligent contracts provide a basic framework for the operation of DAO. They are highly visible, verifiable and publicly auditable, so any potential member can fully understand how the protocol works at each step. Once these rules are formally written into the blockchain, the next step is to focus on funds: the DAO needs to figure out how to receive funds and how to govern.
This is usually achieved through token issuance, through which tokens are sold by agreement to raise funds and fill the DAO library. In return for their decree, token holders are given a certain amount of voting rights, usually in proportion to their holdings. Once the funds are available, "Delivering as One" can be deployed. At this time, once the code is put into production, it cannot be changed in any other way except by voting for consensus. In other words, no special authority can modify the rules of Tao; This is entirely up to the token holder community.
Here are some examples of DAOs:
DAOhaus: DAOhaus is a codeless platform for starting and running Dao. It is owned and operated by the community.
MakerDAO: If you want to contribute to the introduction of the protocol worn by the first unbiased stable coin, you can participate in governance by voting on the change of the Maker protocol.
RaidGuild: This service-oriented DAO originates from the MetaCartel network and is deeply rooted in Web3.
Proof of humanity: This human registry against witch attacks uses social verification and the Kleros court to distribute Universal Basic Income (UBI) tokens to verified humans on the chain.
Opolis: The member owned digital employment cooperatives provide welfare and shared services for independent workers.
BanklessDAO: If you are interested in spreading Wbe3 and educating the public through content, you may be interested in this media centered DAO.
MolochDAO: This OG DAO award is used to promote the Ethereum ecosystem.
DAO is a popular and convenient acronym for Decentralized Automotive Organization, which is composed of a group of people who decide to follow certain rules to achieve a common goal. For example, Dash is one of the examples of decentralized autonomous organizations, which is an open source cryptocurrency. Some of its users run their DAO operations, which are called "master nodes". Dash is a counterfeit coin derived from Bitcoin protocol.