applications of blockchain

DAOs

👉 DAOs: Decentralized Autonomous Organizations

DAOs are member owned communities.

“Think of them like an internet-native business that's collectively owned and managed by its members. They have built-in treasuries that no one has the authority to access without the approval of the group. Decisions are governed by proposals and voting to ensure everyone in the organisation has a voice… There's no CEO who can authorise spending based on their own whims and no chance of a dodgy CFO manipulating the books. Everything is out in the open and the rules around spending are baked into the DAO via its code. “

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Ethereum.org⁠

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The easiest way to think of a DAO is if an online community had its own treasury. DAOs can function as investment vehicles, social clubs, or companies. It is a group of individuals who come together for a common purpose. Members of a DAO are provided with tokens that represent their share of ownership in a DAO. Tokens are used to vote on what the DAO should do.

The easiest way to understand DAOs is by looking at examples.

Example: Constitution DAO - DAOs for Specific Purpose

Constitution DAO was a recent experiment to buy a copy of the US Constitution organized by 1,000s of people on internet. Sotheby’s Auction house was selling 1 of 13 copies of the US Constitution for an estimated $11 million. A DAO was formed by a group of strangers on the internet to buy it. To join the DAO you had to contribute ETH to it and in exchange you were awarded $PEOPLE token. Members of the DAO would then use the $PEOPLE token to allocate their vote for different proposals, in this case it was to buy a copy of the US Constitution.

The DAO raised over $40 million, but ended up losing the auction and the money was refunded to members.

Example:

Friends With Benefits DAO⁠

- DAOs as a Social Club

The Friends with Benefits DAO is a DAO that acts as a social club. Tokens that represent ownership share in the DAO are used by members to cast votes. For FWB, you need to own at least 75 tokens to be a member. This policy has given the tokens value, and they are a tradable asset that has a flucuating price.

The treasury, or money supply, of the FWB DAO was funded by the initial sale of their tokens. The DAO continually sells more tokens to generate more funds for their treasury.

There is no “official leader” of the FWB DAO, but most people look to follow the founder Cooper Turley. FWB organizes both online and offline events that members can only go to if they hold at least 75 FWB Tokens.

Example: Uniswap DAO - DAOs as a business

The DApp, Uniswap, used in earlier examples is a DAO. That means there is no official CEO like there is of a company. The decentralized exchange is managed by the community. Uniswap, similar to FWB, has their own Uniswap token that members of the DAO use to vote on proposals to decided how Uniswap should operate.

Uniswap has various levels of members. Similar to the company, some of the contributors of the DAO work on Uniswap and are compensated in a salary for their full-time work. Some members only work part-time and are not compensated. Involvement and compensation varies based on how much you want to be involved.

Most DAOs host their communities on the popular community tool

Discord⁠

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