Different trends appear in the industry of cryptocurrency and decentralized finance: in 2020 everyone was talking about DeFi, a year later - about NFT. There will always be those who managed the popularity of these phenomena, and now they are trumpeting with one voice: 2022 will be the year of the DAO.

What is DAO?

This acronym is used to refer to Decentralized Autonomous Organizations. They are not registered as legal entities and are managed collectively - each participant has ownership, which is ensured by the ownership of the project's native tokens.

There are no employees in the DAO, no one can be hired or fired. To become a member of such a community, you need to buy its token, or get it for your contribution to the development of the DAO - code development or project promotion. The method of obtaining membership does not affect the role of a person in the organization, there is no hierarchy.

What is DAO and how it works

The absence of positions allows you to decide on the development and growth of the DAO using the rules fixed in the blockchain and collective voting. Most often, the proposal with the highest number of votes is accepted, however, some communities hold voting only for the largest holders of tokens. It is similar to the traditional one and is not very popular because it reduces the level of transparency.

Sharing information is the base of DAO.

The DAO also includes tools: each community has a multi-signature wallet, a forum, money management and activity tracking services, etc.

What DAOs exist today?

Kyber DAO, Aragon, Uniswap, Aave, Dash, Curve DAO are just a few examples. There are quite a lot of projects, and enthusiasts have even created a “landscape” of such communities, dividing them into groups: grant, protocol, investment, service, social, media, DAO for collectors and DAO operating systems. A year ago, according to analysts, there were more than 100 different communities, whose assets amounted to more than $10 billion.

What is DAO and how it works

How to create a DAO?
Due to the high speed of development of the industry, special designers appeared.

  • Weezi.io. A special CRM system with a total transaction volume of $29.8 million. The creators offer a step-by-step program for creating a DAO: after generating a unique EMS name, management tokens and the community itself, it remains to configure it for the right audience, choose an investment strategy and track further actions using a common interface.
    https://weezi.io/
  • xdao.app An award-winning project from Binance Smart Chain, Polygon, Tron, and more. DAO is “born” here in 4 steps: creating and splitting GT shares, sending assets or attracting investments, linking the necessary modules and the final “connection”.
    https://www.xdao.app/
  • Aragon.org. This is an open source framework with management plug-ins. More than 1900 DAOs have already been created with Aragon, and the total “treasury” is $190 million. The project has its own blog with educational and news content, as well as several options for creating a community: Aragon Client and Aragon Govern.
    https://aragon.org/

What are the prospects for DAO?

Enthusiasts are inspired by such communities, and experts say that the socialist economy has proven to be ineffective compared to capitalism and other formats. Now the DAO format fits perfectly into the crypto industry: tokens and decision-making due to the majority of votes are great for a decentralized economy. But with the application of this scheme in government, commercial and other areas, there is still no certainty - time will tell whether DAOs can become a globally popular tool for people to interact.