Decentralized Autonomous Organization — a simple yet effective description of what some regard as a revolutionary concept that has implications outside the DeFi world. Despite a shaky start, DAOs have reemerged and appear to be making headlines once again as more and more attention-worthy projects pop up and draw people’s eyes upon one of the marvels of decentralization.
But what exactly are DAOs, and what makes them so important for finance? In this article we’ll be tackling that all-too-common question by examining these organizations, and going over some of their implications for DeFi and beyond.
DAOs Explained
As mentioned above, DAO stands for Decentralized Autonomous Organization; it is one that leverages blockchain technology to establish and secure a trustless, decentralized organization for governance, fundraising, investment and other such affairs. In fact each and every word can be picked apart and regarded as an essential aspect of what a DAO is and stands for.
Decentralization is perhaps the most important of them all, as it is what draws people to DeFi and interrelated protocols. As the idea of being in charge of your own finances gains popularity, so do other areas where the same principles can be applied. It is difficult to imagine what sort of form a DAO would otherwise take without decentralization, as it is that integral to the concept.
Autonomy is as important, as it allows for DAOs to function. As is to be expected, decisions are proposed and made from the bottom-up, and are executed when certain criteria are met. Usually, voting power is directly correlated with owned or staked tokens, but in some DAOs other factors such as membership duration, role and contribution may also influence one’s voting rights.
Lastly the organization is what gives these DAOs reasons to exist, they are the purpose and the goal of gathering. Without a clearly defined set of goals, a DAO would be too vague and broad to properly function, and would lack the dedicated members to make it work.
How Do DAOs Work?
Organizations around the world have historically suffered from certain fundamental problems, chief among them being trust. It is difficult to place trust in people one hardly knows, and without the ability to witness everything, it is just as difficult to know if an organization is functioning as intended.
Blockchains have changed all that for the better, in part thanks to the open-ledger, and in part due to smart contracts. Blockchains that aren’t privacy-oriented have transparent ledgers where all transactions and addresses can be monitored, which makes certain illicit acts difficult to get away with. In addition, open-source, audited code and smart contracts eliminate the need for trust, solving the fundamental flaw that has troubled organizations for millenia.
If the code cannot be tempered with, is open-source, has been certified to be safe and as advertised… then people can trust the protocol to function as intended, and participate with passion and honesty with an eased mind; knowing that even if dishonest members exist, they’ll have a difficult time getting to their funds.
As such, DAOs amplify the power of unity by allowing people with a common cause, passion or motives to pool their resources together and realize their ambitions. So, how are DAOs used, and will their use-cases grow as time goes by?
DAO Use-Cases
DAOs are commonly used for governance purposes for decentralized projects. Token holders of said project can use the DAO to propose changes that they believe will benefit the product, ecosystem and/or community, and fellow governors can vote on the propositions. When a proposition is passed, the project team members are usually the ones tasked with undertaking the challenges and implementing the proposed changes.
DAOs can also be used in DeFi and investments, and their uses include but are not limited to: Fundraising, asset management, revenue management, budget allocation, ecosystem funds and grants, investments and acquisitions, and so much more. In fact, DAOs can be used for Trad-Fi purposes too, and can be used to purchase stocks, shares, assets, bonds… and so on.
What the Future Holds for DAOs
The most misunderstood thing about DAOs is their use-cases outside of the blockchain and DeFi world. It is true that most DAOs today are limited in their scope, and tend to be too heavily involved with and focused on DeFi — which gives off the illusion that their reach is limited.
The reality is that DAOs simply only utilize the benefits of blockchain technology, but as far as use-cases are concerned, are only limited to one’s imagination. The sooner people realize the values of DAOs — either from a technical standpoint or a practical one — the sooner we can see them shape the world in front of our very own eyes.
Does Accessifi Have a DAO?
To encourage community participation and interaction while maintaining a fully decentralized marketplace, Accessifi will establish a DAO which will provide the framework for the marketplace and be controlled by the community members and not be influenced by a central government. The DAO governance will be to handle many of the marketplace’s functions from new project listings, mining, trading, to even the potential of purchasing SAFT NFTs to create a fund.
In addition to a DAO, a DAO NFT launchpad and series of DAO tools are also planned to be introduced down the line.
If you’d like to learn more, discuss or get involved, you can find Accessifi on:
Website: https://accessifi.io/
Twitter: https://twitter.com/Accessifi
Telegram: https://t.me/Accessifi
Email: team@accessifi.io
The content above is neither a recommendation for investment and trading strategies nor does it constitute an offer, solicitation, or recommendation of any product or service. The content is for informational sharing purposes only. Anyone who makes or changes the investment decision based on the content shall undertake the result or loss by himself/herself.
