SparkDAO is an investment research group focusing on the field of digital encryption, with members distributed all over the world. We are keen to explore the underlying logic and cutting-edge tracks in the field of digital encryption. Welcome to our Twitter: sparkdao_io
"DAO", short for decentralized autonomous organizations, is emerging as the most attractive area of innovation under the combination of blockchain technology and privacy technology.The earliest group of developers proposed the concept of DAO in 2016, and since then, DAO has emerged throughout the encryption space.
How does the DAO work
DAO can act as a venture capital fund or obtain tokens based on open source code, granting members voting rights on the project.There is no such traditional institution as a board.Without the need to be manipulated by potential human error or investors, decision-making power can be in the hands of automated systems.
The DAO is fairer to all stakeholders.Traditionally, if the board gives orders, customers and employees have little chance to show themselves, but there are no such concerns in the DAO. Employees can vote on fairer compensation and benefits without CEO intervention in the matter, and participants have a much greater impact on the direction of the business.Maker DAO was the first, truly successful, tokened commercial DAO. Its token DAI has been integrated into more than 400 applications and services, and continues to evolve.
DAO enables communities to easily connect together and share ideas.It is open to doors for anyone to participate, providing higher incentives to drive DAO to the future and shape the future of Web3. It is this sense of community mission that attracts so many people, makes stakeholders feel valued, and gives them decision-making power in their business structure.
Investment-type DAO opportunities
Since the DAO has no clear hierarchy, it is difficult to coordinate cooperation due to voting.Maintaining a uniform status of membership also presents challenges when participants span different time zones and have different priorities.Therefore, without a clear leadership mechanism, the efficiency of decision-making will be greatly reduced.
DAO has both pros and cons.As the use of Web3 technology increases, DAO will play an important role.With the rise of new decentralized business structures, the possibilities are endless.There are three prerequisites for DAO:
- A combination of contractual rules / processes through which the DAO will run;
- Tokens mechanism used to determine voting rights and reward DAO activities performed by members;
- Long-term vision (the project needs to have a "reason to exist", a problem or purpose it is addressing);
DAO activities usually include:
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Make recommendations, such as development recommendations for projects / organizations;
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Make decisions on the proposal;
DAO is ultimately for members to run the project successfully and make the necessary development to support the growth of the project.Typically, members gain voting rights based on the number of tokens they own, but the rules in the DAO may choose otherwise.The carefully designed DAO governance process is important to ensure member participation, make recommendations, and determine the future action plan of the organization.
The Investment DAO, in its simplest form, gathers the assets of its members into the same address and establishes a DAO for its members to jointly determine how to invest in these assets and how to distribute the proceeds from these investments.In 2022, we see a lot of investment in DAO everywhere.This year, it will be a year of the DAO boom, just like the Defi boom and the NFT boom that it once did.
Investment DAO, usually follows a similar investment process:
- Gather the assets of the members into a vault;
- Proposal for the proposed investment and initiation of the project;
- Members vote to confirm whether to invest in a project;
- If the investment is confirmed, then the DAO-controlled decision-making organization invests in the validated projects (which usually occurs automatically);
- Members vote on when to strip off (sell) the project
- Members vote to determine the distribution of investment profits (e. g., paying dividends to members, reinvesting in new projects, donating to charity, etc.
An investment DAO typically has an address that stores all the assets and usually requires multiple signatures to trade, thus allowing for a smooth capital allocation. DAO's investment strategy is very important, usually some may focus on early crypto projects, and some may only invest in NFT or even real estate (such as real estate).I have recently observed that many DAO investments focus on Web3.0 startups.
Investing in DAO is in sharp contrast to traditional financial institutions, which are hierarchical, elitist, localized, and opaque.Investment decisions are made by a minority, so-called investment committees.On the other hand, decentralized self-governing organizations (DAO) consists of grassroots networks ranging from several people to thousands of members.Investment decisions are made by all the members of the DAO.
*The content comes from China CITIC Publishing House.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of SparkDAO. Every investment and trading move involves risk, you should conduct your own research when making a decision.
