DAO’S ON NEAR ECOSYSTEM: What Nigerians Should Know
The age of blockchain and web 3.0 has brought about so many other technological innovations, one of which is Decentralized autonomous organization(DAO)
DAO’s are not new, they have existed since 2016 when the 1st DAO was created on the Ethereum blockchain, and had a crowdfunding of 150 million dollars. This was one of the world’s largest crowdfunding projects.
DAO(Decentralized autonomous organization) as the name suggests is an organization that allows for decentralization and true democracy.
Let us take a look at the definition of DAO given by Hassan and De Filippi in 2021 to further understand what a DAO is.
“A DAO is a blockchain based system that enables people to coordinate and govern themselves mediated by a set of self-executing rules deployed on a public blockchain and whose governance is decentralized”
The distinctive feature of DAO’s is in its transparency and equality. Each member has the right to vote and partake in the decision making process.
The hierarchy system in organizations and businesses can be completely eliminated with DAO’s since it will be jointly owned and governed by the members.
The role and rules of the DAO is all recorded in its smart contract. Technically it is not governed by people, instead it is governed by the code of the smart contracts. The record and rules of the DAO is maintained on the blockchain. The blockchain provides a public auditable ledger on which all events of the DAO will be recorded.
There are various models of DAO’s membership
- The token membership DAO where holding a particular token is required to become a part of the DAO, however there are DAO’s where all members have equal voting rights regardless of the amount of tokens held and those are “flat DAO’s” while some DAO’s have a sort of hierarchy where members holding larger amounts of tokens get to have more voting rights and those are “hierarchical DAO’s”
- DAO’s based on share holdings
- DAO’s based on reputation
- Community DAO’s
The DAO’s operate via smart contracts and the codes are open and made available to the public. The smart contracts allows the code to be executed, enabling governance through code.
USES OF DAO’s
- The DAO’s can be used for investments and also businesses where the profits and loss incurred are shared among the members
- They can also be used for charity, a DAO on Near blockchain was actively involved in collecting of donations in forms of cryptocurrencies for Ukraine during the war
- Purchasing of Non-fungible tokens
- Giving out grants
DAO’s are not without disadvantages, the 1st DAO that was launched on Ethereum was hacked due to a bug in the code that led to the loss of 50 million dollars, however the hack was eventually nullified through a hard fork intercession of the Ethereum blockchain. Hence the importance of a DAO being on a secure blockchain can not be overemphasized.
With Near protocol being a fast, secure and scalable layer 1 blockchain, it is definitely the place to explore DAO’s.
With Sputnik DAO and Astro DAO on Near, you can launch your own DAO with ease
On Astro DAO it requires only few steps and in less than 10 minutes you can launch your own DAO.
Near protocol Nigeria(NPK) guild is currently on Astro DAO and are in the process of onboarding the community members into the DAO.
DAO’s offer transparency in governance and operations and is currently rapidly evolving.
The adoption of DAO’s is increasing daily and we will definitely be seeing many organizations adopting the DAO system.