Decentralized Autonomous Organizations which are also known as crypto DAOs are organizations created by developers to control cryptocurrency transactions and also automate decisions on the platform.
The use of blockchain technology to offer a secure digital ledger to trace digital activities across the internet, toughened against forgery by trustworthy timestamping and distribution of a distributed database, is a representative example of decentralized autonomous organizations. With this strategy, there is no longer a need for any decentralized digital contact or Bitcoin transaction to involve a mutually trusted third party.
The removal of the trusted third party and the requirement for repetitively recording contract swaps in various records may significantly outweigh the expenses of a blockchain-enabled transaction and the associated data reporting.
One of the major factors that come with DAO is that they are decentralized. This means they are not under any institutions such as a central bank, or government but are controlled by networks, nodes, or a series of computers.
They are managed and owned by their members. The platform has been built in such a way that the built-in treasures can only be assessed by its members. Other than just cryptocurrency transactions, they serve other purposes. Some of these are donations approved by charitable organizations, payments for software subscriptions, etc.
Needs for a crypto DAO
The following components are necessary for DAOs to operate properly: a set of guidelines under which the organization will function, money in the form of tokens that it can use to reward members for taking part in particular activities, and voting rights for deciding the guidelines' execution. The company must have a solid and safe structure that enables each investor to customize it. All these are the essential requirements for a DAO to function effectively.
How does a DAO work?
DAOs make use of smart contracts, which are bulks of code that are executed whenever some rules are met. These contracts are usually deployed by several blockchains such as Ethereum, Binance, Dogecoin, etc. These sets of contracts establish the DAO’s rules to follow.
Afterward, those who have staked in the DAO can get voting rights and have an opinion on how the organization should be operated or create more proposals. This prevents the organizations from allowing scammers to display wrong proposals. A proposal on the platform would only pass if the majority of stakeholders accept it. Any member of the group is enabled to view their monetary transactions and also view your code as it continues to be transparent and built on an open-source blockchain.
Why do we need crypto DAOs?
You need to have a lot of faith in the individuals you're working with if you want to start an organization with them that entails funding and money. But it's challenging to believe someone you've only ever communicated with online. You just need to trust the DAO's code, which is completely transparent and verifiable by anybody, while using DAOs; you don't need to trust the other members of the group.
This creates several new chances for international cooperation and coordination. In addition, anyone from anywhere around the globe is welcome to join a charity, and the organization is free to choose how to use the money. A network of independent contractors who pool their money for things like office space and software subscriptions might be formed.
Bitcoin is typically regarded as the first fully operational DAO since it contains pre-programmed rules, runs independently, and is managed by a consensus system. Naturally, not all DAOs have had the same level of success as Bitcoin.ù
List of best DAOs in the Crypto Market
One of the most fascinating components of the cryptocurrency and blockchain industries is still play-to-earn gaming. Early P2E adopter, Unix Gaming has amassed an NFT portfolio close to USD 2 million in market value. Users can also take part in UniX Gaming's DAO Vaults to earn high-yield returns and profit from the DAO's expansion and revenue-generating operations.
The UniX Gaming token stands for DAO governance rights, allowing users to have a voice in essential selections involving prizes, sponsored games, land sales, and more. It is an effective technique of democratizing access to play-to-earn games, frequently requiring an initial investment, and assisting new and upcoming games in gaining a larger fan base.
One of the popular types of best DAOs is the lucky block. Lucky Blockers has been named one of the best this year as it offers a great take on crypto gaming. On this platform, members have access to daily prize wins with the chance of winning jackpots that can be a lot of money. The lucky block establishes a building on Binance Smart Chain which makes the platform fully decentralized. Winners have the liberty to their prizes immediately. Another benefit to users of the lucky block is a 10% jackpot pool for every investor who has LBlock in their crypto wallet.
Another well-known brand in the De-Fi industry with several intriguing applications is Aave. It is a decentralized, open-source money market platform that offers a wide range of debt-based products. Aave, which was created on the Ethereum network, supports Ether, stablecoins, and ERC-20 tokens. Through the utilization of liquidity pools, Aave enables users to generate passive income from their digital assets. The Aave protocol, one of the best DAO projects for running a cutting-edge money market, has adopted the DAO style of governance.
Another DAO is Compound where users are allowed to borrow and lend cryptocurrencies safely. Investors are channeled usually to locking their tokens in what we call the Compound protocol and interest payments begin to be generated afterward. The interesting fact about Compounds is that traders gain interest in the asset they deposit. Also, since the whole organization is decentralized, Compound is free to borrow crypto with no credit checks from borrowers while the process goes on anonymously. As of today, the market capitalization of Compound lies at $1.22 billion, which is a strong foundation for its growth.
Uniswap is a well-recognized best DAO and has been used in the crypto market globally. Uniswap is a decentralized organization that is linked to the Ethereum network which gives room for users to exchange ERC-20 tokens at ease. This is a standard token for Ethereum. Also, anyone can store their ERC-20 tokens and in return have a great profit. However, the number of returns is determined by how high a deposit has been placed. In addition to all these, Uniswap has been set to deduct some amount of trading fees for stablecoin exchanges.
DAO cryptocurrency tokens are now utilized for a variety of activities, including investing, giving, purchasing, and manufacturing NFTs, fundraising, and many others.
Borderless organizations known as DAOs are made possible by Web3, a brand-new infrastructure.
In contrast to typical businesses or NGOs, joining a DAO is simple, and once you're in, you're free to vote on existing proposals, submit your ideas, pursue a job, or just hang out with like-minded pals. By joining any of the platforms named above, the best option to go for is to read every rule regarding each DAOs and select whichever best suits you.