What is a DAO?
A Decentralized Autonomous Organization (DAO), Is an organization created on the Internet by projects that utilize blockchain technologies to allow participants or investors to contribute to decision-making using a smart contract.
A project may be founded by a person or group but its constitution is decided by its members through voting; once it’s called a decentralized autonomous organization, the voting is done through a smart contract governance token or a forum.
The blockchain was principally created for decentralization to eliminate centralized intermediaries. The first decentralized product was bitcoin, but it lacks the technical capabilities necessary for the DAO infrastructure, to allow individuals to partake in decision making, the Ethereum network created the first decentralized organization which gives a better-balanced structure.
The DAO Structure
The DAO structures are ways in which a particular project decision is placed by the founder or development group, some Dao’s are fully Democratic, while some are tokenomics focused.
The Fully Democratic DAO grants everyone the power to vote on every decision and write a proposal about old or new programs, for the benefit of the DAO, and for better standards, most decentralized organizations include a Foundational body, and a Legal Liability Company (LLC).
Tokenomics-focused DAO is a project that allows investors to make decisions regarding token governance or utility through smart contracts voting and other factors regarding tokenomics only.
How The Voting Works
DAO Policies are created and locked in a smart contract by the developers, after all
decisions reviews are made by the team or foundation of the DAO governance structure, these policies are written codes on the blockchain that approves proposals using the smart contract tokens, the token might be a Non-fungible token, an actual governance token, or a testnet token.
The Benefits Of DAO
The most beneficial part of a decentralized organization is the freedom given to everyone to propose and get rewarded for an effort shown, regardless of financial assets, there are various blockchain technologies built by decentralized platforms, for example, Gitcoin or any other fundraisers help raise funds for startups and many other helpful purposes which includes charity.
How To Partake On DAO
There is no formulated registry for a DAO; it’s open to anyone in good faith regarding any particular product of choice and if it’s a project with the governance token, holding the token makes you a member of the DAO.
In conclusion, a decentralized autonomous system separates us from the usual traditional finance systems whereby a single entity decides for the many.
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