DAO stands for Decentralized Autonomous Organization which means such an organization that is not controlled by a single entity. It is self-governing means no outside person is required, the people who have invested in this will be making all the decisions by voting. It runs on a blockchain most commonly Ethereum and is written on solidity.
If we will have to describe DAO in more simple terms we will say that it is a company with a collection of members working toward the same objective. And here a decentralized, open, and transparent set of codes governs the organization. Examples of DAOs are DASH (DASH), Maker DAO (MKR), and Augur (REF).
The idea of a DAO was first put forth by Dan Larimer, the founder of BitShares, Steemit, and EOS, in 2015. In 2016, Vitalik Buterin of Ethereum further developed the idea.
Without the need for physical mediator action by its members, a Decentralized Autonomous Organization helps to maintain a network's security and efficiency. Participants are not legally bound by a contract, but rather are encouraged to work together towards a common objective by rewards in the form of native asset tokens.
DAO has the capacity to launch millions of tokens and those tokens will be considered as a vote, and the person who has more tokens has the higher power of voting. And this is how these tokens get a price and a use case in the DAO system.
These tokens or we can say votes help DAO to improve and make changes and upgrade with time. Here real developers get hired to work on the technical part, their salary is decided by voting and they get paid in cryptocurrency for their work in DAO.
What are the merits of the Decentralized Autonomous Organization?
If we talk about the benefits of DAO, there are mainly three. But the biggest benefit of this is being decentralized and autonomous. So as a person, you will feel valued where your vote will matter, where you will make the decision for the platform, not the authorities
- Trustless Here you are not supposed to trust the head or CEO of the company to keep your investments safe and grow them. Here you are part of the team who has the power to do so. Even if the majority of developers stop working or there’s no funding left. The platform will still work (not closed like a normal platform).
- No third party can shut it down There are various government services that have the power to shut down businesses or put them on hold but that can’t happen with DAO. To shut down the Decentralized Autonomous Organization, the people will have to buy a lot of tokens first. Then will need to submit a proposal with reasons for shutting it down, and then the voting will happen. And only if they won in voting they can shut it down.
- It is an Open Source DAO is an open source and the basic definition of a Decentralized Autonomous Organization says that all the information related to that particular thing will be visible to others. Here in DAO, people can access the code and improve it if they can. Being an open source helps DAO as other developers and programmers can look at the code and help in it in case there is something to fix.
What are the demerits of DAO?
Even though DAO has various features that are attractive to people and they lean toward investing and becoming a part of these. There are some demerits in DAO as well that need to be considered first, these are: -
- Can be hacked As DAO is open source people can easily access the code and even make changes, which makes it more prone to getting hacked. This happened with a Decentralized Autonomous Organization platform known as ‘The DAO” which got hacked in 2016. However, it lost around $50 million worth of Ethereum and is still present on the Ethereum Classic blockchain. This incident led to the hard fork of Ethereum back then and we received the current Ethereum blockchain after that.
- No business secrets Every business has some sort of business secrets that are helpful in their growth, it usually takes a lot of money to find something that can make you gain success, that’s why companies keep this as a secret for example the secrets ingredients of the recipes, etc. That can’t be done in DAO, nothing can be kept hidden here as someone will figure it out at least and they can copy it or make something similar to this.
- Not all the decisions will be right The chances of this happening are low as the people have their own money at stake so they won’t risk that. But sometimes it can happen that the decision made after the voting isn’t that right.
How can you invest in DAO in India?
Every Decentralized Autonomous Organization releases its own coins that are available to buy and sell on the majority of exchanges. You can just sell them directly in the similar way you do with any other form of cryptocurrencies on the SunCrypto Exchange.
To buy the Decentralized Autonomous Organization tokens in India on the Suncrypto platform follow these instructions: -
- Search for the Suncrypto application on Play Store or App Store
- Complete the KYC process by filling out the details
- Search for the DAO token of your choice
- Select the quantity you want and press buy
- And you are done with the buying process.
What are the top 5 Decentralized Autonomous Organization coins listed on Suncrypto?
- Uniswap (UNI) Uniswap is ranked 20 on coinmarketcap with a current price ₹466.73 and a market cap of ₹348,083,246,588.
- ApeCoin (APE) ApeCoin is ranked 37 on coinmarketcap with a current price of ₹340.86 and a market cap of ₹104,606,227,841.
- Aave (AAVE) Aave is ranked 41 on coinmarketcap with a current price of ₹6,642.30 and a market cap of ₹93,055,885,895.
- LidoDao LidoDao is ranked 66 on coinmarketcap with a current price of ₹147.19 and a market cap of ₹45,993,433,436.
- Dash Dash is ranked 73 on coinmarketcap with a current price of ₹3,427.23 and a market cap of ₹37,359,533,966.
For more relevant information related to cryptocurrency, check out the Suncrypto Academy.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. All content provided is for informational purposes only, and shall not be relied upon as financial/investment advice. Opinions shared, if any, are only shared for information and education purposes. Although the best efforts have been made to ensure all information is accurate and up to date. Occasionally unintended errors or misprints may occur. We recommend you to please do your own research or consult an expert before making any investment decision. You may write to us at [email protected].