The time has come for applications and projects in which you are not a guest, but an author and your opinion counts!
Thanks to the blockchain new types of teaming people up to achieve common goals and make a profit are being formed.
What does it look like in practice? Meet Decentralized Autonomous Organization (DAO)!
DAO is a form of a business organization, a business entity without central leadership, where all the participants of the community take part in strategic decision making.
The main role of DAO is to solve the principal-agent-problem, when there is a conflict of interests between managers of the projects and providers of capital.
DAO has no CEO and financial department as all the financial transaction records of the DAO and the programming rules for such contracts are stored on the blockchain.
Types of DAO:
DAOs can be of direct democracy or representative democracy.
Direct democracy stands for a situation when any member of the DAO can propose his/her ideas and decisions are made by general vote.
Representative democracy is when the community chooses representatives, who are responsible for making operational decisions. Users and investors at the same time have the possibility to veto the representative’s decisions.
Also when the project decides to launch the DAO the creators usually decide whether it will be a prescriptive dao or descriptive Dao.
Prescriptive DAO – a certain group of people (most often the team of the main developers of the project) has already created the rules of the game and the community adapts to them, getting certain opportunities.
Descriptive DAO allows the community to create the criteria by which this DAO will function.
Main advantages of DAO:
Transparency. There is no CEO, or the manager, or any other leader to trust, since everything is written in a smart contract. Thanks to the blockchain everything is controlled and performed automatically.
DAOs cannot be closed. In the case of traditional companies, the government (Police, FBI etc) can interfere, and you will be forced to comply. In the DAO the decision to close can only be made by voting according to the rules of the DAO. And it is also physically difficult to stop the work of an autonomous organization, since smart contracts work autonomously in the blockchain, validated by thousands of nodes around the world.
DAO is an Open Source. This means that everyone can review the code and even suggest improvements. Generally, Open Source provides more reliability, since a large number of developers can participate in writing and reviewing the code.
Equal distribution of profits among the members of the organization. All earned assets are divided among the DAO participants or invested in the next project, depending on the voting results.
All participants are striving for financial success. DAOs issue their own token, which is owned by all of its members. If an organization is successful, then the value of its assets also increases. Therefore, participants are interested in developing the DAO and making a profit.
The next step in the development of our project is the creation of the DAO NFT Moon Metaverse. In the next posts we will talk about everything in more detail.
With us you can become one of the key leaders in the new virtual world that is just beginning to emerge.