DAO does not specifically refer to an industry or field, it is an organizational governance structure, just like a limited liability company can engage in various businesses, DAO can not only manage assets, but also do DeFi protocols, NFT... The discussion here is DAO The advantages and disadvantages of this governance structure, and use cases to illustrate how DAOs are governed.
Any organization is inseparable from decision-making, and how to make decisions depends on the governance model. As the most common organization, the current governance structure commonly adopted by companies is management + board of directors: management supervises the daily operations of the company, while the board of directors provides strategic oversight and reviews management. Corporate governance is mainly reflected in the right to claim and control the residual value of the enterprise, such as whether the net profit is used for shareholder dividends or put into reproduction. The goal of governance is to improve the value of the company and maximize the interests of shareholders.
Corporate governance and companies have evolved over the centuries, but the current mainstream governance model is not the best practice, nor is it suitable for all corporate organizations. For example, due to limited financial resources, individual shareholders generally have a small share in the company, and do not have enough motivation and strength to supervise entrepreneurs, so they are willing to become passive shareholders. Another example is that Internet platforms use the content or data produced by creators to obtain advertising revenue. Under the traditional corporate governance structure, such revenue is owned by shareholders, and there is no reasonable incentive mechanism for creators. In addition, there are problems such as opaque governance process, dislocation of incentives, and low governance efficiency.
In 2016, the Ethereum mainnet was launched. The earliest and most expected application scenario of the smart contract automatic execution function provided by it is governance. this kindOrganizations that collaborate by enforcing a set of rules on the blockchain are known as DAOs(Decentralized Autonomous Organization). At that time, people were so excited about The DAO that the decentralized venture capital fund The DAO raised $150 million in a short period of time.The DAO replaces shareholders with token holders, allowing the largest token holders to effectively serve on the agreement’s board of directors.secondary title
What DAOs can do
control assets. One of the common functions of DAOs is to control the use of treasury. For example, a profit-oriented investment fund adopts In the organizational form of DAO, stakeholders can be anonymous, can be located anywhere in the world, reach a consensus through proposals and votes, and manage the assets of the DAO together. Appointments to important posts. DAO can reasonably appoint personnel through voting, and those with community prestige are more likely to be recognized by the community. Protocol upgrades and new features launched. Protocol token holders are stakeholders, but the power to develop and launch the protocol is often in the hands of a small group of project parties, and this power can be delegated through voting. Changes in the token economic model. The economic model set in the early stage of some projects is not applicable during the development process, and it is necessary to issue additional tokens or change the distribution ratio of tokens. Development proposal. For projects with limited development resources, all functional requirements cannot be met, and a vote is used to decide whether to develop a certain function.
Token holders of MakerDAO, which builds a decentralized stablecoin, can manage the system and vote on parameters such as the stability fee. Curve DAO will generate transaction fees and provide income dividends for locked token holders. The longer the Curve token (CRV) is locked, the more voting rights and rewards the DAO member gets. Unlike traditional companies that share revenue proportionally, Curve DAO has a system that weights voting rights and revenue shares based on how long a token holder has invested. On February 3, the yearn.finance (YFI) community passed the proposal to issue 6,666 additional YFI tokens with a support rate of 83.46%. secondary title
text
The LAO
The full name of The LAO is Limited Liability Autonomous Organization, which means Limited Liability Autonomous Organization. It achieves compliance through the tools provided by OpenLaw. OpenLaw acts as an administrator during the creation and maintenance of The LAO, charges a certain development fee, and will not exercise any control over The LAO unless requested by community members.
Flamingo DAO
● Purchase NFT, split ownership, and access existing DeFi platforms.
● Book the works of well-known NFT artists, craftsmen, and creators.
● Purchase digital artists respective community or social tokens to invest in digital artists.
● Manage purchased works and create digital museums and galleries of hyper-virtual worlds for the public.
● Mining and investing in supporting NFT core infrastructure and projects.
Become a member of Flamingo DAO to vote on the above business proposals. You can become a member by investing ETH. Every 60 ETH you invest will get 1% of the voting rights (100,000 Flamingo tokens), and each person can get up to 9% of the voting rights , Tokens are non-transferable, and a majority vote of members is required for transfer. Member voting rights include:
● Determine the investment target and investment method
● Issuance of new governance tokens to replace existing Flamingo tokens
● Future DAO asset types (ETH, DAI, BTC or any interest-bearing assets)
● Decide on the flow of all funds and assets, how to use them, and distribution of proceeds
● Flamingo organizational structure
● Remain members and attract new members
text
Moloch DAO
Moloch DAO is a DAO that provides stipend rewards to promote the development of the Ethereum ecosystem. Its goal is to contribute to the Ethereum infrastructure and solve public problems in the open source development of the ecosystem. Moloch enables voting, membership, governance, and its code is a coordination mechanism. To become a Moloch DAO, each person needs to donate 100 ETH. If a member disagrees with the overall decision of the DAO, the member is allowed to withdraw and withdraw the funds. The MolochDAO contract has been forked many times to create other DAOs.
MetaCartel Ventures
Early on, MetaCartel created a DAO to fund hackers and builders developing new products in the Ethereum decentralized ecosystem. In the past year, it has provided early funding for many of the most popular emerging projects in this space, including: Mintbase, Known Origin, rDAI, Kickback, Sablier, DeFiZap, RocketNFT, Gelato Finance.
0x DAO
Summarize
Summarize
Going back to the corporate governance mentioned at the beginning of the article, in fact, in addition to the well-known joint-stock company, governance is achieved through management + board of directors. Co-ops are also a very unique governance structure. The idea of a co-op dates back to the mid-18th century, and it is a company that sells shares to corporate users, founders, or customers. However, because cooperatives are relatively inefficient both in terms of capital and operations (organizing, coordinating, and motivating millions of equal shareholders is very difficult) cooperatives are easily defeated by traditional companies with leaner structures and easier access to capital. .
American outdoor sports brand REI is perhaps the most well-known consumer cooperative. When REI is profitable, consumers share an annual 10% profit based on their qualifying spending. Traditional companies increase returns to shareholders through dividends or buybacks, while cooperatives benefit consumers/users and further create value by rewarding consumption.
Blockchain can improve the operational efficiency of cooperatives, allowing cooperatives to create a more attractive model and embed it on the decentralized template. But the governance innovation here is still mainly reflected in efficiency and automation, rather than its underlying design. It can be found that many DeFi platform tokens distribute tokens to core users and those who have contributed to the platform, allowing them to share the dividends of platform development, which is very similar to the cooperative model.
Increased efficiency and automation can solve some problems, but not all. DAOs are a powerful way to organize, replace aspects of legal contracts with code, and save a lot of operational overhead. But if control over DAOs becomes centralized or vaguely defined, problems can arise as well. A Wyoming Senate committee also passed a Wyoming DAO bill that would help create a legally recognized DAO.
In addition, DAOs have many difficulties in coordinating and acting quickly compared to management regimes that empower CEOs to make quick decisions. In order to improve efficiency, the compromise is gradual decentralization, that is, to centralize governance power to a certain extent.
The low shareholder participation faced by traditional companies will still exist in DAOs. Not all members want to vote, or the members who participate in voting do not actually meet the standards. In this case, there may be voters who will delegate their votes to members who are more informed and active in voting and also aligned with their beliefs, and a deal lobby may emerge.
official website
official website
https://snapfingers.com
Cooperation please contact
contact@snapfingers.com
