Greetings TrustWallet community. Today I want to introduce you to the main aspects of the DAO (Decentralized Autonomous Organization) and how they aim to change the.
What is DAO, briefly?
DAO is the abbreviation of ‘Decentralized Autonomous Organizations’. It means that the DeFi platforms don’t need anyone, any committee, or any council. Because of that, they’re ruled according to communities’ requests. It allows us to control and maintain the direction of the path in which we are involved in. But what are the differences from the existing ones?
Most of the existing examples of cryptocurrency communities have a leader in the background. And all of the working scheme directed to them, so it creates a huge set against the changes, innovations, and sometimes the resilience. As a result of that situation, it becomes more static over the years and more difficult to change it.
For example, the leading cryptocurrency exchanges are led by some leaders. All of them have a hierarchy, and it’s nearly impossible to reach the top person of the scheme most of the time. Even though they sometimes want to hear feedback from the community, we can only suggest, not rule the whole platform. Now, the DAO makes it possible for everyone to decide the next step of development and novelty.
It’s only a brief explanation of the basics of DAO. Now, let’s see the examples of community-governed DeFi protocols and how it works in a more detailed way.
ARAGON: Every user of Aragon has the right for contributing the advance. They see the DAO model like a small town and every member is working for the collective success of all people. But the villagers of that town are from all over the world. So we need a global language to communicate and contribute to each other. Now, Aragon wants to become the main bond. The only requirement to enter that town is to bring value!
Aragon allows people to use the main infrastructure and create newer, smaller communities inside the Aragon ecosystem. Some of them include Decentraland, Daonuts, and others.
We understand that the DAO is not only the place people vote and it goes on. We have the right for creating new elections, not only the leaders.
MantraDAO: MantraDAO aims to become the main playmaker in the DeFi ecosystem by providing Lending, Staking, and Governance properties to the crypto community. People are able to borrow and lend their money, create collaterals, and reach the whole aspects of financial tools. There’s not a shadow of a doubt that how much you stake, you’ll that equal ratio of governing the way MantraDAO will transform. Nowadays, it’s available for web users to bind and stake at MantraDAO App, and we’ll see the complete function in near future.
DeFi is not limited to ERC20-backed platforms, of course. You can easily find some platforms built on TRON or EOS chains. Now, let’s see the governance methods in detail. I want to introduce the steps by following the Polkadot method. Now continue reading…
How does it work to give proposal, vote, and make it realize?
The world is changing continuously, the needs and wishes of people are changing at the same time. Because of that, we need continuous and progressive work. And to achieve it, we must modernize themselves. The same is ok for DeFi platforms governed by the community.
When the time comes, the community first offers a renewal. It can be about staking ratios, fee changes, adding/delisting pairs, or anything else linked to the platform itself. It’s called ‘proposing a referenda’ in the Polkadot ecosystem. Then the voting starts. Everyone has the right to vote ‘YES’ or ‘NO’ to that proposal according to their share in holding native platform tokens in the previously announced time period. In the end; if ‘YES’ is dominant, the proposal is executed immediately but if ‘NO’ is dominant, the proposal is rejected. (To find detailed information about the voting mechanism, please check the relevant Polkadot Wiki page.)
(Image by Gerd Altmann from Pixabay)
It doesn’t sound different than any of the current elections we vote, I know. But the main difference is we have the right to offer/give a proposal. Now you become the real owner of the community.
I believe that blockchain technology is under-valued now. I don’t only mention the price of any currency but my point is about implementing blockchain products into our daily lives. We need more time to do that but DeFi part is only a piece of that collection. Now, we are the leading point and we must use them most efficiently.
None of the projects I mentioned above includes any kind of ‘investment advice’. My point is to create awareness of DAO and its products to the TrustWallet community. Don’t forget to DYOR/Do Your Own Research.