Decision-making across companies have been always centralized unless a Bengaluru-based blockchain firm Polygon announced that it is building a decentralized autonomous organization (DAO).
DAO is an emerging form of legal structure with no central governing body where every member within a DAO shares a common objective. With crypto-currency enthusiasts and blockchain technology, DAOs facilitate the decisions making in a bottoms-up management approach. DAO is not controlled by a single institution like a government or central bank rather it is divided among a variety of computers, networks, and nodes.
In the traditional system, the framework was not transparent or not even not publically auditable. Decentralized autonomous organizations platform development has enabled changing the code or protocol in a transparent manner. Initially, the DAO platform was largely based on Ethereum but now DAO platform creation is even possible on any blockchain that supports smart contracts. Polkadot, Solana, and Cardano are commonly used nowadays for that matter.
DAO based on smart contracts-Significance
In traditional companies rights and obligations were regulated by legal contracts and enforced by a legal system whereas DAO involves a set of people interacting through a self-enforcing open-source protocol.
Blockchain and smart contracts reduce transaction costs of management. Decisions are regulated by incentives tied to the network tokens. Power of governance is distributed across token holders who collectively cast votes. One governing law or set of transparent rules is written into the piece of software or automatic algorithms.
It is based on machine consensus and regulates the behavior of all network participants. DAO based on smart contracts can eliminate the need for banks, courts, and credit institutions. Thus, the smart contract is nothing but guidelines that dictate how the platform is supposed to work.
Some popular implementations of DAO
- Accepting membership and donations throughout the world and facilitating the groups to decide on spending donations.
- Contractors pool their funds for office spaces and software subscriptions and build a freelance network using DAO.
- Creating a venture fund that pools investment capital and enables voters with a voting system in such a manner that money repaid could later be redistributed amongst DAO members.
Essentials for decentralized autonomous organizations platform development
- Crypto wallets are secured by private keys and passwords that give access to your crypto-currencies making them safe and accessible. The crypto assets live on the blockchain and can only be accessed using a private key. The keys prove ownership of digital money allowing only authenticated persons to make transactions. In case anyone loses private keys, the same will lose access to money as well.
- Any compatible application software is mandatory for managing buying and selling of cryptos. It also secures the rights to private keys. It provides the interface for creating an organization and selecting relevant templates. The interface manages the services related to monitoring Minimal Approval Percentage, Support Percentage, or Vote Duration proposal questions.
- A peer-to-peer decentralized distributed digital ledger that makes the records of any digital asset transparent and unchangeable, is popular as blockchain technology. Blockchain technology is an emerging and revolutionary technology that is independent of a third party. It can reduce risks and fraud.
- Token holders play important role in the voting system of DAO for addressing various issues and taking important decisions. It is well known that a digital token is a unit of cryptographic information and facilitates any transaction including online money transfer or subscribing to a service. Similarly, a native token is required for supporting the voting system of DAO. A Name and symbol are used to represent it.
- DAO services are required for interacting with the blockchain for the DAO platform. These services allow the running and manage decentralized autonomous organizations.
- The developers take care of protecting the interests of the business through DAO blockchain development with cost-effective methods. There is another way for creating DAO which is by organizing numerous crypto wallets.
Categories:
- Protocol DAOs are organizations that use tokens as a voting metric to build in the protocol and financial changes
- Investment DAOs support capital pooling for various decentralized financial operations and investments
- Grants DAOs resemble decentralized Venture Capitalists where communities use governance tokens to vote on capital allocation
- Collector DAOs are dedicated to NFTs and artists to resolve fractional or complete ownership of art or content
- Service DAOs represent talent hunting and acquisition platforms for agencies or individuals
- Social DAOs provide a decentralized platform for interactions and communication similar to social networking.
- Media DAOs provide a transparent platform to watch the consumers’ common interests.
Epilogue
The above information on DAO indicates that DAO development requires technical experts with thorough knowledge of various connected domains. Antier has a competitive engineering team with a solid background of practice. Consult them for decentralized autonomous organisations platform development.
