5 Decentralized Autonomous Organizations (DAO) Disrupting Decentralization
The Five DAOS Changing Decentralization
Blockchain technology and smart contracts have led to the development of companies that support peer-to-peer relationship. These types of companies usually come in the form of a DAO, or an “Decentralized Autonomous Organization.” DAOs are governed by their members through a consensus and the organization’s management is guided by rules written into a set of contracts executed by computer code.
DOAs also require that the organization’s tokens be used to reward activities within it. Investors in DAO have the right to vote in the decision making process concerning the organization’s development. Further, anyone who has purchased a stake in a DAO can make suggestions about its future. The ideal situation is a DAO that is autonomous and independent from its creator.
Digix is a distributed autonomous organization on the Ethereum Blockchain that exchanges tokens for gold. The platform has two tokens: Digix Gold Tokens (DGX) and Digix DAO Tokens (DGD). Those who have the former have a right to own gold – that is, 1 gram of gold is equivalent to one DGX and the token is also backed with gold bars. The gold is stored in the platform’s Safe House vault in Singapore and the facility is subject to continuous and independent audits by the Bureau of Veritas. The platform’s Protocol of Provenance indicates that the number of DGX tokens is always equal to the grams of gold in the vault and the ownership is ensured by the tokens.
On the other hand, DGD is not supported by gold, but it gives the holder the right to vote on how the platform uses the funds raised to develop the platform. Each DGD token is subject to quarterly dividends, calculated from the cost of transactions and fees associated with gold registration and use.
MakerDAO is a decentralized stablecoin whose value is equal to $1. The platform’s system functions as a decentralized tool for creating a stable token, which allows the value of certain price threshold guaranteed by mechanism design. Like the former, this system is built on the Ethereum blockchain and the tokens work together with DAI coin. The Maker is ideal for DAI prices that are lower volatility, as compared to the US dollar.
The platform also features a token maker that functions as either a management or token utility, or a recapitalization resource. Owners of MKR vote for token adoption solutions proposed for the modification of the network or they vote upon the solutions for the creation of proposals. Voting takes place regularly and they are meant to provide risk control and security as well. The voting process is a bit delayed – especially between voting results and implementation. The purpose of the delay is to prevent massive purchase of MKR to manipulate voting results.
DaoStack is an operating system for collective intelligence that aims to incentivize future collaboration and the creation of self-organizing teams. Developers who use this platform can use a wide range of Dapps. Since the platform’s launch in 2018, independent organizations have been able to unite and create launch operations, companies, and non-profits.
The project functions on a model of configurable company assembled as cubes of organization primitives – also known as “schemes” or “restrictions” that are presented in the form of smart contracts. The platform has two tokens as well: DAO stack system and the Gen Token. The former is a reputation token that determines the strength of the voice, while the latter allows its owners to use the token to bid or participate in offers in the DAO ecosystem.
IMMO is a bit of a mystery. Some suggest some of the largest banking dynasties are involved in its development and the platform has been discussed by experts such as Jimmy Song, Tim Draper, and the finance managers of G20 countries.
The purpose of IMMO is to create a token supported by valuable resources so that it has an intrinsic value. The platform has not announced the launch of an investment round, but it has produced several High1000 participants who will regulate a project’s development. The High1000 is a decentralized cryptocurrency community consisting of experts and evangelists and the project plays a significant role in project concept. Those who participate vote for certain IMMO changes, guaranteeing the rights of all investors in the project. Community members also receive bonuses depending on the level of involvement and project awareness.
The final is the DAO and though it is the first noticeable implementation on the Ethereum smart-contract network, it never proved viability. DAO was the largest project of its kind and it managed to raise over 150 million USD in under a month. Two months after launching, the platform was hacked and $50 million Ethereum was stolen. The situation led to market panic and collapse of the Ethereum rate. To prevent the hacker from controlling the stolen funds, the Ethereum network rolled back transactions and divided into 2 Ethereum Blockchains: ETH and ETC.
Despite the hack, one cannot understate the value of DAO’s effect. The TechCrunch described the DAO as “a paradigm shift in the very idea of economic organization . . . It offered the first version of complete transparency, total shareholder control, unprecedented flexibility, and autonomous governance.