All of us are aware of how corporate hierarchy works. There is a board of directors, senior-level managers reporting to the board, and then executive managers who report to the senior managers, all working in tandem to achieve the organisation’s goal.
However, owing to information asymmetry and a lack of organisational transparency, employees may not be motivated to work towards the company’s goal. But what if each member in the chain had equal rights, and there was utmost transparency and decentralisation? This would make it easy to work towards a common goal. Sounds like a utopian idea, right?
Well, to turn such an utopian world into reality, the crypto world has invented what is called a Decentralised Autonomous Organisation (DAO). A DAO brings together like-minded people to work as a cohesive team on projects. They have equal rights and get completely decentralised and transparent operational activities. Each member receives DAO tokens to exercise their rights in the specific organisation.
In this article, we will first talk about what DAOs are, how they function, the top 10 DAO coins to look out for, and what the future holds for DAO coins.
What are DAOs?
DAOs are social organisations that run on an open-source blockchain network, such as Ethereum, Bitcoin, etc. Members governing this organisation are like-minded people who come together to form it. In a nutshell, a DAO is an online community of people who share a bank account and run an organisation, sitting far away from each other.
How do DAOs work?
Like any organisation, DAOs also have a system that governs their existence and makes the day-to-day operation smooth. Here’s how a DAO functions :
Smart Contracts
The organisation’s rules are written via smart contracts that are decentralised in nature. Any changes made to the compensation, operational workflow, or organisation’s governance must be first passed through an internal voting system where every ‘core member’ of the DAO puts their votes forward. The majority of voters make the change, making it a community-driven, decentralised, and transparent organisation.
DAO governance tokens
We know, for one, that the backbones of a DAO are the smart contracts and the organisation’s vision. Once the modus-operandi of the company is set, it is then open to the world for external funding. People can then be part of this organisation by buying the DAO’s native coins, also known as DAO tokens. As an external member, if you believe that the DAO is moving towards solving bigger problems or is working towards a goal that is exciting to you, then as an outsider, you can buy equity in the company by purchasing the DAO’s native tokens and take part in the organisation’s governance. Such tokens give you a seat on the table, and for any changes in the organisational rules or any decision made going forward, your vote can be put to exercise. Your DAO governance coins’ worth grows hand in hand with the growth and popularity of the DAO. Also, just like in the real world, your influence on the company’s governance depends on the proportion of DAO tokens you are holding.
Top DAO coins to look out for
Some of the most popular DAO coins, according to their current market capitalisation, are:
1. UNISWAP (UNI) – current market capitalisation is INR 36,400 crores
2. APECOIN (APE) – current market capitalisation is INR 28,700 crores
3. Aave (AAVE) – current market capitalisation is INR 13,680 crores
4. Maker (MKR) – current market capitalisation is INR 10,100 crores
5. Curve DAO Token (CRV) – current market capitalisation is INR 8,000 crores
6. Dash (DASH) – current market capitalisation is INR 7,450 crores
7. Decred (DCR) – current market capitalisation is INR 5,350 crores
8. Compound (COMP) – current market capitalisation is INR 5,300 crores
9. Ox (ZRX) – current market capitalisation is INR 5,200 crores
10. Synthetic (SNX) – current market capitalisation is INR 3,950 crores
Key takeaways
Last year, in October, a DAO named PleasrDAO made a significant purchase of the sole existing copy of the album “once upon a time in Shaolin” by Wu-Tang Clan for a whopping INR 30 crores approx. This goes on to show that there can be many such DAOs that will make such significant purchases in the future. However, there is a long way for the DAO ecosystem to grow. There are legal and regulatory challenges that the DAO ecosystem faces. There is a lack of clarity on how these DAOs will operate because crypto enthusiasts predict a government intervention that will affect how such DAOs operate.
Also, investors must purchase DAO tokens from secured crypto exchanges because DAOs are built on open-source blockchains, where any group of like-minded people can come and build a DAO. Trusted crypto exchanges, such as Zebpay – India’s leading crypto exchange, verify and onboard only the fundamentally sound top DAO coins, which ensures smooth trading and safeguards investors’ money. To know more about DAO coins, visit Zebpay and start trading today!
