Connect with us

Hi, what are you looking for?

Top Stories

Learn the basics of DAOs and how they work



In the latest Cryptopedia episode, viewers can get a succinct and informative overview of decentralized autonomous organizations, or DAOs. Cointelegraph’s Jackson DuMont believes DAOs have the power to “completely transform how work and social collaboration are organized.”

What makes this type of organization both decentralized and autonomous? The answer is smart contracts on the blockchain. Fundamentally, a DAO runs on the lines of computer code written on smart contracts that anyone can interact with in the same way.

DuMont described the three major steps necessary to launch a DAO. The first step is creating that smart contract. The second step is to determine how to receive funding and enact governance, usually done by creating a token. Lastly, the DAO is deployed on the blockchain.

The most popular use case of a DAO is crowdfunding. The money pooled together is put into a smart contract that, in return, issues tokens to DAO members. Tokenholders, who own equity in the DAO, can then vote on how spend the money and vote to appoint delegates. 

In the case of ConstitutionDAO, members raised just over $49 million to buy an original copy of the U.S. Constitution but were outbid at auction. Another example is Blockbuster DAO, which aims to raise enough money to buy the video rental brand from Dish Network and turn it into a streaming film studio.

DAOs intend to reduce the risk of poor leadership through horizontal leadership, or flat hierarchies that level out the playing field of power. The reach is infinite and no matter where a member is located, everyone is bound by the same rules of the smart contract. Trust is placed in code rather than people. 

Related: $53 million raised for Assange showed the power of DAOs

Of course, there remain risks and concerns over legality and security. One notable example of a DAO gone wrong is The DAO, which was hacked for $50 million in 2016. A recent report claims to reveal the identity of the alleged hacker. 

Advertisement. Scroll to continue reading.



Source link

Click to comment

Leave a Reply

Latest

Top Stories

UNI needs to break above a key technical resistance level to trigger its 100% bull run scenario. Otherwise, a bear flag awaits a 45%...

Technology

We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 – 28. Join AI and data leaders for insightful...

Top Stories

The provision in the U.S. infrastructure bill signed into law in November, which will require financial institutions and crypto brokers to report additional information,...

Social Media

As it looks to add more ways to help creators to build their presence, and monetize their work in the app, Facebook is launching...

Technology

In context: Tensor cores have been one of the main advantages of Nvidia’s RTX graphics cards, enabling machine learning-based image upscaling, which significantly improves...

Online Business Success

Small Town Cultures pickles. Small Town Cultures Small Town Cultures A family-based fermentation company located in upstate New York, bring simple, clean fermented foods...

Advertisement

You May Also Like

Uncategorized

Introductions get a lot of attention. I’ve explored the topic of how to write them even though as a reader, I always skip them....

Online Business Success

The internet is now our nervous system. We are constantly streaming and buying and watching and liking, our brains locked into the global information...

SEO Guide

There are all kinds of pictures of the world on the internet, but to find one of these specific pictures that you want to...

Online Business Success

You can think of link building in many ways. I like to call it tedious, painful, and a test of patience. It’s also necessary...

Advertisement