Decentralized Autonomous Organization DAOs
Decentralized Autonomous Organization DAOs are totally based on codes using smart contracts, smart contracts are actually a collection of codes that runs on blockchain. To know more about NFT & Blockchain click here. We can set rules via smart contracts in DAO organizations.
Have
you ever felt like being the smartest person in the room or the building?
You’re probably wondering how that can even be possible. Well, think of this
for a moment. How will you feel if you are working with like-minded
people around the world? That would be safe and effective right?
Well, DAOs can make this dream come true. Wikipedia would define it as an organization represented by rules encoded as a transparent computer program, controlled by the organization members, and not influenced by a central government.
So in other words, think of DAOs like an internet business
that is collectively owned and managed by its members. Here there is no
manager, no CEO. Here everything is governed by proposals and voting. This is
to make sure that the voice of every member matters.
Why and how Decentralized Autonomous Organization DAOs will be the biggest trend in upcoming years? How you will earn money from DAOs? in this article we will discuss everything about DAOs.
It is now an open secret that where money is involved, trust must
be found. What is more, it is harder to trust someone you have only met on the internet. But there is something special about DAOs. The transparency and
reliability of the DAOs code is that thing. Thanks to this, many opportunities
for global collaboration are now made available for the members.
One of the very first successful DAOs happens to be Bitcoin. But
prior to it, in 2016, a German startup launched their DAOs in support of their
decentralized version of Airbnb. At first, it looked like a success but this
joy would have been short because their code would meet certain issues and
later on in June 2016, it would undergo a serious cyber-attack causing the loss
of $50 million worth of Ethereum.
How DAOs works
DAOs have their
own contract known as smart contracts. This contract defines the rules of the
organization and everything related to it. So if any change is to happen, it
must be done publicly. So no one can change anything related to the rules or
the treasury. You might be wondering why? When a smart contract is approved, it
goes live, which means that if any change is to occur, it must be done through
a vote because everyone will notice it.
Let's Compare a normal
organization with DAOs
Who takes the decisions of the big companies like Google, Amazon, Facebook, etc, of course, their board members, they took the decision and transfers to the CEO, and CEO compliments this decision.
You can imagine DAOs as a big hall, where any member can have his point of view or suggestions. In this session, every members can vote for this suggestion, if this gets the majority no of votes then this suggestion will get implemented.
Rules can be changed on smart contracts only after voting, that's why DAOs are more democratic than any normal organization.
What makes DAOs so special
To eliminate the need to involve a third party in a financial transaction, DAOs records all their financial transactions and rules on a blockchain. Very simple right? In comparison to a traditional organization which is not only hierarchical, depending on structure but also required human handling and a certain type of privacy, DAOs id fully democratized and it requires the voting of the members for any changes to be adopted. DAOs services are mostly handled automatically and everything in there is transparent and fully public.
No Hierarchy
DAOs do not follow the hierarchy structure like the other companies follows. Top position of the structure for CEO of the company then top managers then mid-level managers and list goes on, and in the last of the list for interns. It is not possible for an intern who will give suggestions or ideas directly to the CEO of the big companies.
Trustless
You don't need to trust anybody on DAOs, because there is no middle man, no CEO no managers. The only thing you should trust is codes if codes are working as it programmed.
DAOs can not be down
Because DAOs is decentralized organization so there is no involvement of governments or any central authority.
Publicly Auditable
DAOs is an open-source organization fully transparent if you want to be a member of DAOs then obviously you can. You can read smart contracts of DAOs as well as codes, also you can suggest improvement by finding bugs in the system.
Although DAOs has great things to adopted but as well as it also has some issues like
Vulnerable to attacks by hackers
Since DAOs are a very much open source and transparent system so hackers get a chance to attack on DAOs by reverse engineering on those codes.
No business secrets
Any organization needs security for their research and development purpose because this part is so expensive and it required very much time. But on DAOs it becomes transparent, nothing secret is left there. Any competitor on DAOs can easily access that Infos for their own purpose.
How you can be a part of DAOs?
So here is to methods of being a member of DAOs
The first and easy method is government token, it is permissionless, you can buy any DAO token from anywhere like Maker DAO project, uni swap, and compound, etc.
The second type is shared-based membership, it is not permissionless. You need to have permission to be a member of DAOs. Here you have to give them a proposal, like what you have so special in yourself that they make you a part of DAOs. A famous example of this type is MolochDAO where they invest together in Ethereum projects.
Let's find out how many types of DAO is there
Investment DAO
Where basically many members come together pull their money and invest in different opportunities and assets. The most famous example of this DAO is constitutional DAO, they raised around 47 million to buy constitution but they failed. Another example is flamingoDAO, where they invest in different NFTs, if DAO gets profit they splits it into each other.
Protocol DAO
This is mainly D5 protocols like MakerDAO, Compound, Uniswap. In this type of DAO, members take decisions about fees, up-gradation, changes, etc.
Social DAO
This DAO is a community that is based on a particular interest, like friends with benefits but wait it's not that benefit what you are thinking about. Let's back to the point, it is a private social club that organizes private events. You have to hold their tokens to be a part of them.
There are too many examples of DAOs available like CommerceDAO, MediaDAO, ServiceDAO, CollectorDAO and the list goes on.
To get more details about DAOs use this tool
So the biggest question at that time is DAO a million-dollar opportunity?
According to me, it's 100% yes, it can be a great opportunity for you to earn money from DAO.