Opinion: Decoding the implications of crypto’s expansion on the future of DAOs
Disclaimer: The author’s views and opinions expressed in this article are their own and do not necessarily reflect the views and opinions of crypto.news’ editorial team.
In a previous article, I discussed how the cryptocurrency market has found stability through regulatory clarity and the increasing involvement of traditional finance players. However, amidst the discussions surrounding Bitcoin ETFs, institutional roles, AI’s blockchain ambitions, and evolving but still uncertain regulations, DAOs have been overshadowed.
Even before the last bull run, DAOs gained popularity as a means for blockchain-based entities to eliminate centralized leadership and become member-owned communities managed through decentralized computer systems and smart contracts.
This system provided projects with a decentralized fundraising platform, granting voting rights and decision-making power to those involved in the funding. As the crypto market grew twelve-fold between early 2020 and late 2021, investor interest in the blockchain space increased, with many venture capitalists preferring to invest in tokens rather than equity in web3 startups.
The World Economic Forum even wrote about DAOs potentially becoming the “business structures of the future,” referring to them as the “natural entity of web3.” Now, with the crypto industry experiencing growth in both retail and institutional activity, and with notable innovations in DeFi and tokenized real-world assets, it is worth considering the future role of DAOs.
Looking into the future of DAOs
Despite facing legal uncertainties as fully-fledged business entities, DAOs have continued to expand. They are no longer limited to lending and borrowing protocols, exchanges, funding, and gaming; they are now facilitating community-building, fostering collaborations, and spurring innovation.
For example, Friends With Benefits is a social DAO that focuses on community and relationship building, encouraging creativity, and granting members access to exclusive in-person and online events. It also serves as a professional network for developers, artists, and content creators to collaborate and find inspiration.
DAOs are also becoming attractive options for meme coin and NFT projects that already have dedicated followings. An example is the Elon Musk-inspired memecoin project Dogelon Mars, which recently transitioned into a DAO after receiving an anonymous donation of $350,000. The team turned to their community to decide how to use the funds, and the community overwhelmingly voted to burn an equivalent amount of the donation in Dogelon Mars’s native $ELON token to increase its scarcity.
Strong and vocal communities make NFT, web3, and gaming projects ideal candidates for DAO structures. While still utilizing blockchain technology, some DAOs operate in ways that interact with the world outside of web3.
For instance, VitaDAO is a community-owned collective that funds and supports research on longevity to enhance people’s quality of life. Members holding VITA tokens can select specific research projects for the DAO to support while contributing to governance decisions, all with the ultimate goal of making progress in the fight against age-related diseases.
As blockchain technology continues to find new use cases, we can expect to see more DAOs emerge as organizations seek to empower and give a voice to their communities.
Like other aspects of the broader crypto and blockchain ecosystem, DAOs offer undeniable advantages and benefits, but they also come with unique challenges and complexities. Ultimately, their effectiveness lies in how they navigate and manage community relations, regulatory uncertainties, and their ability to execute their vision.
Read more:
Revolutionizing emerging economies through DAOs | Opinion
Follow Us on Google News
