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I have spent some time learning about DAOs and this is what I understood. Please correct me if there is a mistake. Coined as Decentralized autonomous organizat
by ranuzz 5y ago
I have spent some time learning about DAOs and this is what I understood. Please correct me if there is a mistake.
Coined as Decentralized autonomous organization, they are decentralized applications whose main function is to handle fund disbursement. They work more or less as any other treasury but in a more transparent and automated way.
What further separates them from the traditional treasury is that they are essentially a piece of code that runs on blockchain networks, like Ethereum, Cardano, Solana etc. It makes DAOs a lot different from traditional organisations and businesses from an economic and regulation sense.
Let’s take an example DAO and how it operates. There is no defined template of a DAO yet so I’ll use this open source code written in solidity as an example https://github.com/blockchainsllc/DAO/blob/develop/DAO.sol https://github.com/blockchainsllc/DAO/blob/develop/DAO.sol
This can be called a decentralized application or a smart contract. It defines an Interface which can be used to instantiate a DAO contract. The first few constants define the regulatory parameters. The most interesting part is the proposal array. It holds all the proposals submitted by the proposal creator that specifies an amount which is to be paid to the proposal recipient if it gets approved. Approval is done by DAO stakeholder by casting votes.
From a freelancer’s perspective this can be a bidding platform where gig workers can place their proposals and get paid once the work is done. A very transparent and seamless experience as compared to existing freelance marketplaces.
- aeolian 5y agoAs a member of a DAO, this is almost-right. A DAO isn't necessarily an "application"; it's more of a concept, an idea. There are a bunch of tools/applications that facilitate the operation of a DAO. I wrote a blog post about this: https://blog.juicebox.money/dao-tooling-101/ https://blog.juicebox.money/dao-tooling-101/ In the case of the JuiceboxDAO, I contributed funds (ETH) to the DAO treasury (bank account), and in return I got $JBX (a token that lives on Ethereum). I have about 40,000 JBX tokens. With these token, I can: - use it to vote on proposals. - "burn it" in exchange for some ETH back (but probably not get my original investment - sell it somewhere else (an automated market maker like Uniswap)
- corobo 5y agoI think I'm very close to beginning to understand this whole thing haha thanks for the post Oddly enough I've already been wanting to set something like this up -- my equivalent is running a regular business but with a pretty intense profit share scheme Honestly it sounds perfect except these gas fees. Can someone clarify am I right in thinking it's prohibitively expensive to create any of these tokens/shares/votes/whatever because of fees? Assuming you're broke as hell and missed the original crypto train
- addandsubtract 5y agoIf you set it up on Ethereum, then yes, it probably will be too expensive in your case. However, there are several other chains where you could set up a DAO with close to zero gas fees. For example Polygon or Fantom, among others. The major hurdle atm is "bridging" assets onto these newer chains. Most exchanges currently only support the big players, but as these grow and mature, adoption and UX/DX should improve as well.
- corobo 5y agoFeels a bit too Wild West (and expensive as fuck) for me right now, I'll just use a database and later regular old shares I think haha Maybe I'll pop back when it's web3.1
- ranuzz 5y ago>> it's more of a concept, an idea. Thanks for stating it this way, makes a lot more sense now. Your example and blog post cleared a lot of doubts !