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THE POWER OF DAO

The idea behind the crypto-based system is to eliminate faulty institutions from around the world by developing a blockchain technology-based model. To begin with, cryptocurrency visualization was not a real asset, but rather an alternative payment gateway. Through blockchain-based smart contracts, a form of transparent legal governance is proposed. By integrating both, DeFi (Decentralized Finance) develops a secure, efficient, and reliable financial system. Nevertheless, DOA is the redesigned on-chain operation of the traditional operation. Initial concepts developed by Stan Larimer were DAC (Digital Autonomous Corporations) and DAO (Digital Autonomous Organizations) that were later reconstructed by Vitalik Buterin, the creator of Ethereum.

Digital currency is characterized by its decentralized network architecture. As opposed to being controlled by a single entity, decentralized networks are managed and controlled by a group of participants. In a peer-to-peer network, each node participates and regulates the network’s operation. It is common for digital currencies to be decentralized to achieve high-end security and privacy, which is uncommon in conventional currency transactions.

An Overview of a Decentralized Autonomous Organization

The term decentralized autonomous organization, or DAC, refers to an organization represented by protocols encoded as transparent computer programs, administered by members who are not influenced by one central entity (like the government).

The DAO utilises blockchain technology to provide a secure digital ledger for monitoring digital exchanges over the internet, solidifying against fraud through the deployment of trusted timestamps and propagating a distributed database. By using this methodology, no admissible trusted intermediaries are involved in decentralized digital interactions or cryptocurrency transactions.

In blockchain-enabled transactions, the tariff is lowered substantially by the withdrawal of intermediaries and the have to record contracts exchanges iteratively in multiple records. If regulatory bodies permit it, blockchain data can replace public documents like deeds and titles. Therefore, a blockchain technique theoretically allows cloud computing participants to participate in loosely associated peer-to-peer smart contract collaborations. DAOs are venture capital funds based on open-source code and without a distinctive management structure.

What you need to know about DAOs

The DOA model is proposed to be implemented for patents, copywriting, news accumulation, voting certification, advertising, and next-generation search engines. In the most developed model of the cryptopian ideal, all organizations would eventually adopt the DAO model.

After the original founding of venture fund “The DOA” in 2016, the idea is still struggling to prove itself. However, this seems to be a long-term process. Aside from the pseudo-DAOs, which are groups of investors who want to share assets and decisions, an increasing number of authentic DAOs are gaining popularity.

Among the DAOs that caught our attention, there are many more aspiring and possibly many more approaching.

  • Uniswap
  • PhoenixDAO
  • MetaCartel Ventures
  • JennyDAO
  • MakerDAO
  • BanklessDAO

Uniswap

Uniswap is one of the most successful applications of the DAO concept. That is, to update the conventional underlying system of a foreign currency exchange — an order book — with a Blockchain identical system that works as well, if not better. The success of the DAO model can be evaluated by comparing Uniswap with its competitor Coinbase, which still uses the conventional order-book method.

A major innovation is the hybridization of Liquidity Pool Concepts and Automated Market Makers (AMMs). With this combination, investors can trade their assets directly without the involvement of intermediaries. A price regulation algorithm makes this possible by ensuring the prices are regulated fairly.

With smart contracts on the Ethereum blockchain platform, automated transactions can be made among crypto tokens. Consequently, humans and bots cooperate, with bots taking on tasks like automated liquidation of positions while the market makes unexpected moves.

PhoenixDAO

Developing a real DAO is a tedious process. In order to create an autonomous principal nervous system that is resistant to vulnerabilities and built-in logical flaws, it requires a team of professional developers.

PhoenixDAO is an overhaul of the decentralized financial ecosystem Hydrogen. Despite the complaints of the members, the original plan failed. Additionally, the original idea violated the protocols of a decentralized system, and was not protected by safeguards to prevent forex dumping by the significant coin holders.

The newly exposed ecosystem, coin PHNX, consists of optimized protocols to deal with unique objections. In the “team” section, you can only find directors responsible for verticals like partnerships, communication, etc.

MetaCartel Ventures

MetaCartel Ventures is a non-profit DAO whose aim is to fund and support projects that aim to advance usability or demonstrate the new Web 3.0 use cases. Web design is done without the involvement of a centralized marketing team.

In MetaCartel, “code and law” govern the organization. Members of the DAO, known as Mages, are responsible for performing tasks smart contracts cannot: performing DD, developing investment ideas, and advocating funding.

In addition, they approve the entry of new members to avoid violating the decentralized protocol. On the other hand, leaving a group does not require authorization and is handled by the AI protocol. The withdrawing members are rewarded the full amount of DAO assets.

JennyDAO

Democratizing NFTs is JennyDAO’s tagline. There is only one protocol that governs the JennyDAO central AI, which fragments the NFT assets and controls the crypt of the organization’s NFT portfolio. If a majority of the voting members affirms the protocol, the vault will be opened and NFTs sold. The Unicly protocol controls things, but the human token holders still have a role to play.

An example would be evaluating the price of NFTs under consideration. In the DAO model, everyone participates at the same time, much like an asset holder in a standard investment fund.

MakerDAO

MakerDAO is one of the founding agencies of the new DeFi monetary system, along with Uniswap. In contrast to Uniswap, MakerDAO allows participants to lend and borrow like a traditional bank without the requirement of a beneficiary.

At a regular bank, lending and borrowing are decided by a sort of political process, in which various internal departments negotiate over what the spread between loans and deposits should be.

In MakerDAO, smart contracts manage the borrowing and lending processes. With the pairing of cryptocurrency and Dai stable coin, crypto investors will have the opportunity to borrow crypto and predict the payback amount. In terms of decentralization, MakerDAO has completed a full circle. Initially a small decentralized operation, a “pure” DAO, a sudden surge of interest resulted in the addition of an authoritative layer at the top to deal with the new challenges of scaling. MakerDAO recently confirmed it is once again completely decentralized.

BanklessDAO

DAO that acts as an organizer of the Bankless movement moving forward into the future with greater freedom. The mission of Bankless DAO is to guide the world to go bankless by developing user-friendly interfaces that explore decentralized fintech through media, culture, and education.

The originators of BanklessDAO are asking their associates to create a total of 250,000 new Bank coins in exchange for a capital infusion so that they can attain the onset plans by creating more merchandise and involving more labor. Labor refers to designers, builders, content creators, and other individuals who manage such projects. In the crypto world, there is almost no difference between a private and a public offering

Future of DAO

DAOs are increasingly being seen as a potential future of work, human organizations, and cultural communities by Ethereum supporters. Consequently, some believe that DAOs like DeFi and NFTs will have their breakthrough before them.

Take the case of a vending machine with manual operations. There is manual work involved in inspecting for technical flaws, paying the energy bills, collecting the money, and reloading more products. If the machine were a DAO, the human interactions would have been reduced or eliminated.

It could ship records to the server, and an automated system could then perform what was previously performed by humans.

DAOs will replace CEO decisions, border meetings, and routine operations within organizations, thus eliminating unnecessary work. Moreover, tokens will enable shareholders to vote. Through tokenomics, DAOs can also influence the recruitment process, salary decision, or hiring of developers. We can better comprehend the future role of DAOs if we examine some of their benefits.

  • DAOs are both secure and trustless, they provide security and are trustless. In the event that a developer cannot continue working on the project, the system continues to operate and a new developer is assigned.
  • DAOs offer continuous functionality, so their functions cannot be stopped. There can be no DAO closure without significant tokens and a vote from authorities or financial entities. Nonetheless, reaching a consensus on such a proposal will be a difficult task for the authorizers.
  • Last but not least, DAOs are open-source ecosystems, so anyone can optimize the code. As a rule, open-source systems are more reliable because the programmers are able to help developers identify code errors and suggest ways to fix them.

As a conclusion

I believe that Continuous Innovations have become an integral part of the digital age. DAOs are demonstrating continuous improvement just as any other innovative system. The same is true for open-source ecosystems, as every technology or concept has some advantages and disadvantages. With the advent of DAO, businesses in every sector can resolve the limitless opportunities to disrupt analog structures that delay processes with unnecessary administration.

Despite the fact that the DAO is still in its infancy and trying to establish its roots, there is something at the core of the revolution that is here to stay. It will be quite interesting to see what happens when it grows to the peak.

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