What is DAO? Examples of DAO encryption projects

In this article, we will understand what is DAO and how to use it. Additionally, we’ll look at some examples of active DAO projects.

The hype surrounding cryptocurrencies and Web3 in general has been huge over the last few months. And while most people are already familiar with NFTs, there’s another term that’s gaining popularity.

And that term is Decentralized Autonomous Organization (DAO for short).

What exactly is a DAO?

In layman’s terms, a DAO is a smart contract agreed upon by people who share similar interests. Those people then decide on collective goals (organizational objectives) and raise funds (native tokens) accordingly.

Naturally, you may be wondering how a DAO differs from a traditional business contract. First, people who participate in a DAO participate in collective decision-making. Changes proposed within the DAO community must be approved by those who have invested in the project.

Rules and goals for each DAO project are determined individually. However, all projects must eventually be published as smart contracts.

How do DAOs work?

Before we take a look at a working example of a DAO project, let’s understand how a DAO project works.

1. Smart contracts as the backbone of rules and goals

DAOs are based on smart contracts and there is no single authority that can influence them. When smart contracts (DAOs) are created and deployed, the only way to change their “regulations” is through a community vote. Because smart contracts must be defined using code-based logic, any attempt to change the rules will fail unless the changes are voted on.

Similarly, funds collected by the DAO cannot be used without member approval. This is also the definition of a distributed project. Because the contract exists on the blockchain, anyone who knows the address of the contract can see it.

2. Native tokens will be used to fund DAOs

Once the smart contract is hard-coded and deployed on the blockchain, the DAO can begin collecting funds towards the project’s goals. This is done through native tokens, which are a form of currency tied to smart contracts associated with the DAO itself. Once users start investing in a project, they will be able to earn special rights such as voting, feedback, and potential goal setting for future ideas.

The inner workings of each DAO project are unique due to the way smart contracts are written. Therefore, the best way to learn details is through examples.

DAO project example

This section focuses on existing successful DAO projects.

I think the whole cryptocurrency thing still feels like a foreign object to a lot of people. Therefore, the best way to learn is to see how something is implemented in real-world scenarios.

Generally, DAOs fall into categories such as protocols, philanthropy, publishing, and social media. But overall, the possibilities are endless. You can get a broader glimpse of active DAO projects by browsing the DeepDAO Directory site.

This directory also includes a sample of the project’s proposed changes and how members voted on the changes. Alternatively, DAOList offers a similar service, but does not include suggested examples.

Now let’s take a look at some specific projects.

Assange DAO

Julian Assange is not only one of the most famous journalists in the world, but also the founder of WikiLeaks. After publishing several papers on war crimes committed in the Afghanistan war, both Julian and WikiLeaks began to face adversity. Namely, major credit card companies and payment processors have stopped verifying donations to the WikiLeaks platform.

And over the years, platforms have had to innovate new ways to accept support and donations from people in need.

One way to do that was through cryptocurrencies.

And in recent history, WikiLeaks has taken it a step further. December 10, 2021 – Julian Assange collaborates with digital artist Pac to form AssangeDAO . DAO is based on a dynamic NFT project called “ Censored ”. Specifically, the dynamic NFT is called a clock and displays the number of days Julian Assange has been in prison.

The total amount of funds raised for DAO is over 17,000 Ethereum , which is equivalent to approximately USD 50 million. Once the funding portion ended, AssangeDAO itself purchased the NFT. Therefore, the funds raised through this project will go directly to the WikiLeaks fund.

This project highlights how grassroots movements can cope with uncertainty in situations controlled by external sources.

vita dao

One of the misconceptions about cryptocurrencies is that they are only useful for buying things online. And projects like VitaDAO do a very good job of proving that such is not the case.

VitaDAO specializes in providing a means for biotech scientists to raise funding for longevity research. However, unlike traditional subsidies or government-backed investments, VitaDAO creates an IP-NFT for each project it invests in. IP-NFT stands for Intellectual Property – Non-Fungible Token.

And IP-NFT has many advantages, including:

• Raise funds for your project without creating a foundation or registering a patent.
• Directly involve people in research, including actual patients. Similarly, the project is built in open space, which gives it better exposure.
• Manage progress and research submissions through an all-hands-on-deck approach.

And this also has long-term implications for when research comes to fruition. IP-NFTs are still tied to DAOs (and smart contracts), allowing peer members to decide on pricing, availability, and further data exposure.

Laos

Back in 2016, a number of Ethereum users launched what was then known as “ The DAO .” The project attracted a significant number of fans and also broke numerous records for public crowdfunding campaigns.

Unfortunately, the project experienced significant security vulnerabilities and ultimately failed. If you want to learn more, I recommend reading Laura Shin’s article in Forbes Magazine .

This is also the premise of ” The LAO ” project. It is built to replicate the same functionality (venture capital funds) with the aim of helping promote and sponsor the blockchain ecosystem.

The mechanism is similar to the one described previously. You can participate in the project by purchasing investment tokens with Ethereum. Also, depending on the amount you invest, you can earn special rights, such as voting on which projects to support.

“The LAO” also functions as an investment fund, so it can generate income as well. For example, if a project supported by The LAO turns a profit, it may be eligible for a return. This depends on the number of LAO units you own or invest.

Built for community participation

I think the image is quite clear. While traditional organizations emphasize hierarchical structures, DAOs are flatter and democratic in nature. Similarly, voting rules depend not on one person but on the very people who invest in the project.

Here are some other exciting DAO projects to check out.

• Metaverse DAO: Offers a unique Farm-as-a-Service approach. Earn crypto rewards from a range of blockchain networks while maintaining a single native token.
• Aave : Aave is a DeFi protocol that can be used to lend and borrow cryptocurrencies in exchange for digital asset collateral.
• Blockster: A crypto-based media platform that emphasizes user-generated content. The platform has its own token (BXR) which is the backbone of all ads present on content pages.
• Aragaon : A platform dedicated to providing open source tools for building and deploying DAOs. Contains tools to make governance more accessible.

This field is still ripe for innovation. And we expect to see many more creative ways that DAOs can be used for decentralized businesses in the coming years.

The future of the DAO concept

We are still in the early stages of Web3 development. It is safe to say that DAO adaptations have not yet become mainstream. But I think that’s because the barrier to entry is a little difficult. Not everyone has experience writing code-based smart contracts. And best of all, it has the ability to maintain them at scale.

However, as we saw in this article, certain projects can attract somewhat monumental fans. And people aren’t just interested in a project because it’s for a good cause. The idea of ​​democratic governance is appealing. DAO also allows average Web3 users to access and have their voices heard.

I expect the structure of many open source projects to change dramatically. At the moment, the basis of the DAO is that anyone can participate as long as they invest in the native token. But eventually, problems start to arise as thousands of people negotiate the right course of action for a project.