QANplatform Use Case Story: DAO
Learn about Decentralized Autonomous Organizations (DAOs) and how they can benefit from QANplatform’s features like multi-language smart contracts, hybrid blockchain model, or quantum-resistant security.
Decentralized Autonomous Organizations (DAOs) are poised to play an increasingly important role in the global digital economy.
Read on to learn more about DAOs and why it’s important for DAOs to operate on a quantum-resistant blockchain.
What is a DAO?
Decentralized Autonomous Organizations (DAOs) are internet-native organizations running on a set of rules (enforced by smart contracts) that are governed democratically by members without the need for a trusted central authority.
Unlike traditional organizations, which are hierarchical with centralized control in the hands of CEOs, managers, and directors, DAOs are collectively owned and operated.
DAOs typically require members to pool funds together in smart contracts to enable them to vote on changes or decisions in the organization.
Decisions are submitted on-chain to the DAO in the form of proposals that members vote on using their share of voting rights, which in most DAOs are governance tokens. The amount of tokens you hold determines your voting rights. Any decision reached is automatically implemented without a central authority.
At the core of DAOs, is the decentralized blockchain ledger used for publicly recording and tracking interactions within the organization, and smart contracts that automatically enforce the rules and decisions of the network.
This allows people who don’t necessarily know each other, to run different organisations without the need for trust. One party can’t make biased changes, siphon funds, or shut down the organization as the blockchain would reject such records, and everyone will see it in the shared ledger.
Such levels of transparency and automation show the potential improvement DAOs can bring to business processes. However, DAOs are still faced with hurdles they are yet to move past.
The major challenge DAOs face is security. Errors or bugs in a DAO’s code put the entire organization at a risk because of the complex procedures in correcting such errors. This was witnessed in The DAO hack of 2016, for example.
The emergence of quantum computing in the near future also puts the blockchains DAOs run on at risk as the immutability we speak of in DAOs may cease to exist. However, QANplatform is currently tackling this challenge by enabling developers to build quantum-resistant DAOs.
How to Start a DAO
Before starting a DAO, a group of core community members will need to have a clear idea of what the organization will be about and its basic functional framework. The framework is encoded into a smart contract (math and code) which contains the parameters by which the DAO will operate. Anyone can audit the smart contracts to understand how the organization will eventually function.
After the smart contracts have been deployed onto the blockchain, the DAO works its way around governance and funding usually by issuing and selling digital tokens. These tokens represent the voting rights of each user in the DAO.
Note that once a DAO goes live, its rules can’t be changed again except through consensus reached by members in a voting process.
How to Join a DAO
The first step in joining a DAO is to first outline projects that align with your interest and understand the core function of each DAO. Important factors include the type of voting rights, the nature of proposals, and how you can contribute.
Some DAOs vote on the technical aspects of their protocol, like fee distribution mechanisms and system upgrades. Others vote on treasury pooling and allocation, especially DAOs that are formed to collectively own assets.
After these considerations, you can join a DAO by investing your money in their governance tokens giving you access to vote on proposals in theorganizationn proportional to the amount you hold.
Alternatively, you could work for a DAO by submitting a proposal to provide a service for the organization or secure a grant from the DAO to build products or services to support the DAO’s goals.
What’s Possible With DAOs: 3 High-Profile DAOs
Since the emergence of DAOs, they have grown over time from a “failed concept on Ethereum” to an innovation cutting across several use cases and blockchains. This growth is evidenced by the hundreds of DeFi protocols launching governance tokens in recent times.
DAOs have also been formed for charity purposes, purchasing of digital and physical assets, etc.
Now, let’s take a look at three notable DAOs that shed light on the possibilities to explore with decentralized autonomous organizations.
The DAO
The DAO was one of the first decentralized autonomous organizations to launch in the world of crypto. It acted as a type of venture capital fund running on a smart contract. The DAO provided tokens that would allow investors to vote on different projects. Those who owned the tokens could profit from investments made by the DAO either by reaping dividends or price appreciation of the tokens.
In April 2016, The DAO launched after a one-month crowdsale that raised about $150 million (14% of the total ETH in existence back then). However, in June 2016, the DAO was hacked as a hacker exploited vulnerabilities earlier pointed out by experts in the DAOs code. The hacker stole 3.6 million ETH, which was about $50 million. As a result, the DAO failed.
The Ethereum network later implemented a hard fork to reverse the transactions and allow investors to withdraw their tokens. This act split the Ethereum network into two chains, with the forked version known as the Ethereum of today and the original chain as Ethereum Classic.
Dash DAO
The Dash DAO was launched by the founder of Dash, Evan Duffield, in August 2015. Considered as the first DAO by many, the Dash DAO was formed to enable the Dash cryptocurrency network to have enough funds to carry out projects without corporate sponsorships or grant funds.
Hence, instead of miners receiving 100% of block rewards in the Dash network, block rewards are split into three parts with 45% going to miners, 45% to masternodes and the remaining 10% going to the treasury. The 10% is used to fund jobs, projects or other expenditures the Dash network deems fit. Masternode operators vote on how these funds are allocated and spent by locking 1000 Dash in collateral.
According to Dash’s website, these funds have been used to hire developers, designers, purchase hardware, sponsor conferences, cover attendance costs for people the network sends to give speeches at conferences, and more.
Constitution DAO
ln November 2021, a group of crypto investors collectively raised about $45 million in ether (ETH) within five days to purchase an original copy of the U.S. Constitution at a Sotheby’s auction.
The Constitution DAO brought the efficiency and innovations of a DAO to the real world for the first time. Although Constitution DAO eventually lost the auction to Ken Griffin, CEO of Citadel Securities, it showed the world the actual potential of a DAO, onboarding thousands into the crypto space and inspiring many other DAO projects.
How to Build a Future-Proof DAO on QANplatform
QANplatform is the world’s first quantum-resistant blockchain aiming to take DAOs to the next level.
The robust and innovative features offered on the QAN blockchain platform enable any enterprise or group of people to easily launch and run a decentralized autonomous organization efficiently.
QANplatform uses a Multi-language Smart-Contract Development Methodology to enable over 28 million developers to program a DAO in all Linux Kernel compatible languages of their choice.
Adoption on QANplatfom is also accelerated through integrations to DevOps technologies (Docker, Kubernetes), major cloud platforms (Amazon AWS, Microsoft Azure, and Google Cloud Platform), Indexing and Oracle APIs (Chainlink, Band Protocol), making QANplatform the fastest blockchain to deploy on in the market.
QANplatform uses a unique hybrid Proof-of-Randomness (PoR) consensus mechanism that allows anyone to join the QAN MainNet as a validator even with a mobile phone or Raspberry Pi. This enables DAOs to run on the green QANplatform for minimal fees and stay energy efficient without compromising decentralization.
Additionally, QANplatform enables DAOs to be resistant to possible quantum computing threats in the future. This is made possible by QANplatform’s unique Lattice-based post-quantum cryptographic algorithm implemented in the Rust programming language.
QANplatform is also one of the best developer-friendly blockchains to build a DAO. This is evidenced by QAN being the first layer-1 blockchain to reward developers after each new smart contracts deployment and each transaction on the QAN MainNet for a lifetime, whenever other developers reuse their code.
Already launched DAOs on the Ethereum network can also easily enjoy the benefits on QANplatform by leveraging its Ethereum Virtual Machine (EVM) compatibility.
The QAN blockchain platform will allow anyone to build quantum-resistant DAOs for the Web3 era.
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About QANplatform (QAN blockchain platform):
QANplatform is the quantum-resistant Layer 1 hybrid blockchain platform that will allow developers and enterprises to build quantum-resistant: smart contracts, DApps, DeFi, DAO, NFT, tokens, Metaverse, and Web3 solutions on top of the QAN blockchain platform in any programming language.
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