NFT Marketplace #11 - Organization of Rebellion, what is DAO?

DAO is meaning decentralized autonomous organization!

Unlike traditional centralized organizations, it is based on blockchain networks.

Decisions within the organization are made through smart contracts.

Each member of the organization owns a token that is used within the blockchain,

and its stake is determined by the amount of ownership.

Rules are set as codes within the blockchain and they work around them.

When it is managed with a transparent code and is a decentralized ruling system,

it can be thought of as ideal for drought.

But DAO still has its limits. The reason is that it is not clearly compatible with the existing legal system.

In March of 2016, it was originally used by Ethereum founder Vitalik Buterin

as the name of a digital decentralized autonomous organization project.

I wasn't interested in many people at first,

Recently, it's back in the spotlight for financing a variety of projects!

 

 

 

1. How does Dao work?

How does DAO work? DAO moves according to the rules of the smart contract.

First, we need to set the operating rules. Encoding is required from a blockchain such as Ethereum to a contract.

This needs to be done by a person, and then the computer automatically executes the rules.

We need to raise money before the computer executes the rules right after we establish the rules.

The funds that the organization can run well. It's usually distributed after the funding is completed.

Tokens are provided to members of the organization

who participate in DAO development or as compensation for something.

Decisions regarding Dao are made through consensus, but the details vary from DAO to DAO.

 

 

2. DAO's strengths and weaknesses

What happens to DAO's black and white? The biggest advantage is that organizations are decentralized.

In DAO, governance takes place in the hands of people who actually have interests involved.

In fact, I think it's not just the advantage of Dao, but the advantage of blockchain.

In addition, I told you earlier that Dao needs rules to work.

I would say that it is also an advantage to ensure that rules are predefined,

that rules are transparent and accountable.

However, if there is a problem after the release, it can be corrected only when an official votes for approval.

If you're hacked like the recent Exy Infinity incident,

Dao has to wait for the vote to approve the amendment and the results to come out.

And while it has the advantage of decentralized governance,

it also has the disadvantage of the high possibility of slow development.

In addition, it is also a problem that there are no laws clearly defined for metabuses and blockchains related to Dao yet.

 

 

 

3. What about DAO, these day?

In fact, there have been many attempts at the DAO project.

Among the emerging Dao organizations are Moon DAO, Spice DAO, Constitutional DAO, etc.

Recently, the national treasure Dao has become a hot topic in Korea.

DAO was formed to protect Korean cultural heritage.

But it was only a hot topic, and similar to Constitutional DAO, it didn't achieve its goal.

The reason was that it failed to secure minimum funds and corporations to act as agents to auction.

 

Through various attempts at DAO project, questions about the possibility of DAO have also emerged.

It is a question of overcoming the limitations of smart contracts

that are only possible with Ethereum, and it is difficult to be legally recognized.

And the reason is that the low participation rate of the DAO members

and the people with the large number of tokens have a relatively monopoly on influence.

Many of you may not know, but in fact, DAO is widely spread in blockchain and cryptocurrency.

It remains to be seen whether it can be an alternative to traditional organizational operating systems.

That's why the problems I mentioned earlier.

However, there is a widespread opinion in the market that DAO will not be a temporary trend.

As of last year, there were about 4,000 DAO organizations around the world.

The total value is said to be about 10 trillion won.

Various projects are continuing to keep their promise to "distribute everything."

There's still a lot of trial and error, but over time, there are many positive opinions

that it will be an alternative to changing the limits of capitalist democracy from its roots.

 

 

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Today we're talking about decentralized autonomous organization (DAO).

DAO is characterized by the fact that individuals gather freely and run autonomously.

According to a recent report released by Mesari, a U.S. virtual asset data analysis company,

it is predicted that 2022 will be the year of DAO.

 

If you are studying NFT or virtual space, please remember DAO!

I will come back with more informative information in the next posting. Please look forward to the next posting! :)