Disclosure: The views and opinions expressed herein belong solely to the authors and do not represent the views and opinions of crypto.news editorials.
I recently wrote about how cryptocurrencies are stabilizing thanks to regulatory clarity, alongside the growing valuable role of traditional finance (tradfi) players. But as the industry floods with debate over Bitcoin ETFs, the role of institutions, AI's blockchain aspirations, and increased regulatory activity that remains unclear, DAOs have fallen out of the spotlight.
Since before the start of the last bull market, DAOs have become member-owned communities managed through decentralized computer systems using smart contracts, providing a popular way for blockchain-based companies to move away from centralized leadership. It became a means.
With this system, the project expanded into decentralized fundraising, giving voting rights and important decision-making to those who participate in the fundraising. As the cryptocurrency market grew 12x from early 2020 to late 2021, investor interest increased in the blockchain space, with many VCs preferring to invest in tokens over equity in Web3 startups.
The World Economic Forum also wrote about the potential for DAOs to become “the business structure of the future” and called DAOs “a natural companion to web3.” Now that the cryptocurrency industry is on the rise in both retail and institutional activity, and the industry can once again boast innovation, especially DeFi and tokenized real-world assets, DAO It is natural to wonder what the role of will be in the future. .
As full-fledged entities, DAOs have unclear legal status, but this does not limit their expansion. DAOs are no longer limited to lending and borrowing protocols, exchanges, fundraising, and gaming. Now you can scale to foster community building, foster collaboration, and foster innovation.
For example, Friends With Benefits is a type of social DAO focused on building community and relationships and fostering creativity, giving its members full access to exclusive events and gatherings both in-person and online . It also serves as a professional network for developers, artists, and creative content creators to collaborate and find inspiration.
The DAO route is also becoming desirable for memecoin and NFT projects that already have a large and passionate following. A recent example here is the Elon Musk-inspired meme coin project Dogelon Mars. The project recently transitioned to a DAO following an anonymous donation of $350,000. Once the team received the funds, they turned to the community to figure out what to do with the donations. As a matter of course, community Overwhelmingly, we chose to burn an equal amount of donations in Dogelon Mars' native $ELON token to increase scarcity.
Strong and vocal communities make NFT, web3, and gaming projects perfect candidates for DAO structures. Some of his DAOs still leverage blockchain technology, but operate in new ways to interact with the world outside of web3.
For example, VitaDAO is a community-owned organization that funds and supports longevity research to improve people's quality of life. Members holding VITA tokens will be able to select specific research projects to be supported by the DAO and at the same time contribute to governance decisions. The ultimate goal is to advance the fight against age-related diseases.
As use cases for blockchain technology increase, we can expect to see more use cases for DAOs as organizations seek to empower and give voice to their communities.
Like most aspects and sectors within the broader cryptocurrency and blockchain ecosystem, DAOs offer unique challenges and complexities, as well as undeniable advantages and benefits. Ultimately, its effectiveness depends on how it navigates and manages community relationships and regulatory uncertainty, and how it executes its vision.
