Anyone familiar with the crypto space must have come across the three-letter acronym, DAO, in an article, tweet, or video recently. Indeed, many believe DAOs are the final piece on the puzzle of true global decentralization of power.
What is DAO?
DAO is short for Decentralized Autonomous Organization, which is a community that is run by its members, without a central authority. For transparency, the rules and governance of DAOs are built on the blockchain through smart contracts and protocols. These smart contracts automatically execute agreements, which are laid down DAO rules agreed upon at the formation of the DAO.
How Do DAOs Work?
Upon the formation of rules, DAOs embark on a funding stage where interested parties participate to fill the treasury. Then the DAO goes live and foundational decisions are made to set the tone for governance.
Most DAOs require their members to hold their native tokens to participate in voting and governance. Large-cap DAOs like Curve DAO have their native tokens, but not all DAOs have their native tokens. DAOs that do not have native tokens use other major cryptocurrencies for funding purposes.
The Future of DAOs
Beyond cryptocurrencies, DAO adoption is being mooted in several sectors of the world as blockchain tech gains adoption. DAOs will be relevant in building communities across tech, finance, nonprofits, education, etc. The community-driven investment will become common eventually, with DAOs like DAOhaus already raising $20 million for direct venture investments.
2022 may be the year when DAOs blow up, and the following are the top ten low cap DAO projects worthy of attention:
Recognized in many quarters as a leading peer-to-peer network that facilitates the trading of digital assets, Airswap is an open developer community that focuses on decentralized trading systems. The network uses a combination of smart contracts and web protocols to match market participants. Airswap’s design also protects traders from counterparty risks, frontrunning, and price slippage.
Airswap is a community-owned project, and the holders of the AST token are tasked with making all the decisions in the ecosystem. Community members are required to stake their AST tokens to participate in governance, submit Airswap Improvement Proposals and earn participation rewards.
C.R.E.A.M. Finance (CREAM)
A member of the yearn.finance ecosystem, C.R.E.A.M Finance is a decentralized DeFi lending protocol that brings financial services to individuals, institutions, and other protocols. C.R.E.A.M Finance is an open-source, permissionless, and blockchain agnostic protocol that serves users across multiple chains— Ethereum, BSC, and Polygon.
The protocol powers swap, lending, and supplying activities for users, offering rewards for liquidity mining in the form of the CREAM token. CREAM is an ERC-20 token and is the governance token of the C.R.E.A.M Finance ecosystem. Tokens are staked for up to four years and users can vote for listing and delisting of digital assets through the created DAOs.
Cryptex Finance (CTX)
Cryptex Finance leverages Ethereum smart contracts to build innovative, decentralized, and open-source financial solutions for the crypto community. Cryptex Finance created the Total Market Capitalization token, TCAP, which is a digital asset tied to the total cryptocurrency market capitalization.
Cryptex Finance is a community-owned and governed platform, and the CTX token is the governance token of the platform. CTX powers and secures the Cryptex Finance platform, and allows holders to participate in decision-making by voting for protocol upgrades.
HOPR is a privacy-inclined blockchain solution that aims to decentralize data exchanges to allow private and enterprise users to decide who can access their online data. The protocol uses ‘mixnets’ to shuffle data around and make it untraceable, while simultaneously delivering the different pieces of the data to the users, putting power over their data in their hands.
The HOPR DAO governs the protocol through DecenGov, which is community-enabled governance that puts the power in the hands of the people. The DAO is made up of the HOPR community and supporters.
ICHI is a community and platform that allows DeFi communities and protocols to mint oneTokens— stable coins pegged to the dollar. ICHI uses the Decentralized Monetary Authority Model to facilitate the minting of stablecoins, allowing communities to create stablecoins with their favorite cryptocurrencies and a community treasury for farming rewards.
ICHI is the governance token of the ichi.org community. Token holders decide on the parameters like permitted oracles, collaterals, and investment strategies.
PoolTogether is a savings protocol powered by cryptocurrencies and based on the Premium Bond model— premium bonds are lottery bonds issued by the UK, where the interests upon each bond are distributed to lottery winners. On PoolTogether, users are required to deposit cryptocurrencies to participate.
PoolTogether is a decentralized autonomous organization, governed by holders of the POOL token. Holders are required to vote on changes and upgrades to the protocol’s operations. Community members that hold a minimum of 10,000 POOL can make and submit proposals.
The unFederalReserve ecosystem is built for banks and individuals who want to participate in the DeFi experience. The protocol is structured like a safe zone for ordinary people to access decentralized financial services, profiting from sophisticated pricing oracles.
eRSDL is the native token of the unFederalReserve ecosystem.
MahaDAO is a crypto-centric community that has launched various products built to give value to the crypto space. The foremost product of the MahaDAO ecosystem is the ARTH token, the world’s first decentralized non-depreciative algorithmic token, designed to increase in value over time. ARTH derives its value from a pool of uncorrelated assets whose relative weights are influenced by automatic trading activities responding to price changes of one asset against the others.
The MahaDAO ecosystem is governed by the community and built to facilitate equal distribution of wealth. The MAHA token is the governance and utility token of the platform.
Opium is a decentralized trading platform that allows for the creation and trading of cryptocurrency derivatives. Opium aims to create a decentralized derivatives marketplace where anyone who owns a wallet/crypto can participate and democratize access to financial derivatives. The platform is governed by the community, through OPIUMDAO.
OPIUM is the governance token of the Opium trading platform and was launched in January 2021. Active users and holders of the OPIUM token are required to participate in the decision-making process of the platform.
DAOhaus is a crypto-centric community built on the basics of community-centered governance and community-driven goals. DAOhaus is a DAO explainer built by a DAO for DAOs funded and run by a DAO. DAOhaus is building a DAO to DAO economy and a social network primed for the Metaverse. Through the power of the community, DAOhaus has raised over $50 million and distributed over $20 million to communities, projects, and ventures.
The governance token of the DAOhaus ecosystem is HAUS.
HAUS unites all the DAOs that make up the DAOhaus ecosystem.
DAOs appear to be the next big thing in the crypto space. Crypto enthusiasts and industry experts believe that the future of work, and communities, rests on the adoption of DAOs. Blockchain technology represents decentralization— removing governance from the hands of a few and putting it in the hands of the larger population. The mass adoption of DAOs will be the climax and the true fulfillment of all that cryptocurrencies and blockchain tech truly represent.
Written by: Narender Charan