Dao Governance Model, in recent times many people have learned a lot about cryptocurrencies, smart contracts, and blockchain technology.
DAO is based on smart contracts and this acronym stands for Decentralized Autonomous Organization formally known as the Decentralized Autonomous Company (DAC).
In this article we will be looking at the following:
What Is A Decentralized Autonomous Organization (Dao)?
Giving the full details or knowing about what a blockchain simply is.
DAO is an autonomous, transparent community-led entity that lays the rules, executes the decisions, and its code is publicly audited.
Theoretically, DAO does not represent a single entity by a firm with no physical structure. DAO is not maintained by firms with monetary motives but by humans (as users).
How Is Dao Governed?
The concept of DAO is governed by so many things but mostly by DAO individual prospects that collectively have to make some crucial decisions concerning what the future will amount to,
For instance, the treasury allocations of the project and the technical upgrades.
Every community has a DAO structure that gives way to collaborations. They create proposals about future operations individually or collectively and come together to vote for each proposal. The DAO community is more member friendly than some other communities. It allows its members to oversee the community protocol.
One good thing about this framework is that it gives individuals the opportunity to be forthright in voting and approving proposals.
This will serve the protocol’s interest because it will increase the token value for each member.
How To Use The Dao Governance Model
To start using the DAO governance model as a beginner will require you to set up or create a DAO. Anyone can own a Decentralized Autonomous organization irrespective of gender.
You can start by creating a Decentralized Autonomous Organization: Create your DAO via an established platform like “Moralis”. It offers users a code template that they can copy, and paste to help quickly set up a DAO.
1 Set Up A Wallet: Set up a crypto wallet because it will be needed to pay for setup fees. You can use Metamask.
- Search For Aragon: once you click on it create your DAO. You will choose either to create an organization or open an existing organization.
- Linking: Link your crypto wallet to Aragon using the Ethereum main net and fund your wallet.
- Select Template: Click on Create a DAO, and you will be redirected to where you will select a template.
- Enter Your Preferred Name.
- Configuration: Configure your DAO by setting up your Minimal Approval Percentage, Vote duration, and support percentage.
- Set Up A Native Token For Your Organization. Create a unique name for it and create a symbol that differentiates it.
- Confirm: This is one of the basic steps of confirmation of a transaction on your crypto wallet to enable you to create your DAO.
- Create your proposal question immediately after you finish setting up your organization. Token holders will vote yes or no on the issue in your proposal.
You don’t need a good reason before creating a DAO. For example, CitiDAO offers to sell physical land as NFT then members will vote to decide what happens to the land.
Originally, the DAO governance started with the arrival of the Decentralized Autonomous Companies in 2013.
DAO governance is a set of rules governing the processes, operations, and actions of the DAO members. It does not represent a single entity but an organization. DAO has so many structures, objectives, and technologies that play an important role in defining its governance model.
How Does The Dao Governance Model Work?
The community uses smart contracts to construct the rules set by core members and they lay the foundation for its operation. Secondly, the DAO treasury is funded by giving tokens to holders thereby giving them the right to vote for any DAO governance project.
Lastly, on completion, the DAO is deployed to members.
Benefits Of The Dao Governance
DAO governance offers the basic requirement for Web3 firms. For example, decentralization, security, transparency, and accessibility.
We will discuss some of the top benefits of DAO governance.
DAO has a unique autonomous enabling community that ensures every member is independent and this can facilitate freedom from a centralized intervention.
DAO creates a neutral environment for organizations. There is no need to deal with conflicts or power puzzles like most modern organizations.
The decentralized autonomous organization allows everyone to contribute to the project and take part in decision-making. Provided you are a stakeholder you have the right to air your ideas, and submit proposals for protocol changes. These proposals are made visible to everyone.
Transparency is one of the prominent characteristics of decentralized autonomous organizations. Being transparent brings about accountability.
All the activities are documented permanently on the blockchain. This enables easy tracing of past transactions. This reduces scamming activity in the crypto space. The rules are publicly auditable, and verifiable and allow potential members to understand how they operate at every time
The DAO mode of operation is very fast and it offers more incentives than other crypto products.
Its method of operation is very fast.
Being productively engaged is one the benefits of the DAO governances. It gives each member a progress to work toward and it offers reward for doing the work. This helps increase member engagement in the community.
Examples Of An Established Dao Community
BitDAO: this is a typical example of an investment DAO that works specifically in supporting organizations to pool up capital for investments in different crypto projects.
Flamingo: This is a unique DAO basically for artists and NFT collectors. It provides support that enables complete ownership of the art or NFT. Flamingo DAO is also called the collector DAOs.
Orca and Colony DAO: This is an operational DAO that helps multiple organizations to create their DAOs.
Uniswap, Curve, & Yearn: Although one of the common DAO it allows members to leverage the DAO governance token via voting indicator to implement the necessary modifications and protocols.
Moloch DAO: These are communities of venture capitalists that use governance tokens to make decisions about the allocation of remaining capital.
Hence, this is a complete guide of the DAO governance model. And to learn more DAO enroll DAO Certification course by Blockchain Council and be an DAO expert of the industry.