What is a decentralized autonomous organization, and how does DAO work? Part #4.

Examples of DAOs:

Decentralized autonomous organizations have gained traction over the last few years and are now fully incorporated into many blockchain projects. The decentralized finance (DeFi) space uses DAOs to allow applications to become fully decentralized, for example.

To some, Bitcoin (BTC) is the earliest example of DAO there is. The network scales via community agreement, even though most network participants have never met each other. It also does not have an organized governance mechanism, and instead, miners and nodes have to signal support.

However, Bitcoin is not seen as a DAO by today’s standards. By current measures, Dash would be the first true DAO, as the project has a governance mechanism that allows stakeholders to vote on the use of its treasury.

Other, more advanced DAOs, including decentralized networks built on top of the Ethereum blockchain, are responsible for launching cryptocurrency-backed stablecoins. In some cases, the organizations that initially launched these DAOs slowly give away control of the project to one day become irrelevant. Token holders can actively vote on governance proposals to hire new contributors, add new tokens as collateral for their coins, or adjust other parameters.

In 2020, a DeFi lending protocol launched its own governance token and distribute it through a liquidity mining process. Essentially, anyone who interacted with the protocol would receive tokens as a reward. Other projects have since replicated and adapted the model.

Now, the list of DAOs is extensive. Over time, it has become a clear concept that has been gaining traction. Some projects are still looking to achieve complete decentralization through the DAO model, but it is worth pointing out they are only a few years old and have yet to achieve their final goals and objectives.

As internet-native organizations. DAOs have the potential to change the way corporate governance works completely. While the concept matures and the legal gray area they operate in is cleared, more and more organizations may adopt a DAO model to help govern some of their activities.

Next: we will be discussing the top 100 DAO’S the USA. You will be surprised. Enjoy. Thank you for reading.