DAOs: A blockchain-based replacement for traditional crowdfunding
The crypto space witnessed phenomenal growth in 2021. Buzzwords like nonfungible tokens (NFTs), decentralized finance (DeFi) and the Metaverse broke through to the mainstream and culminated in the crypto market peaking at over $3 trillion in November of 2021.
NFTs redefined arts and how they are acquired. DeFi revolutionized how we lend and borrow. The Metaverse birthed an alternate universe that we could all live and work in virtually. Play-to-earn (P2E) games paid gamers to do what they love.
Decentralized autonomous organizations, or DAOs, also had their moment to shine.
One of the most out-of-the-blue crypto headlines of 2021 is probably ConstitutionDAO. A hurriedly assembled group of United States constitution-loving crypto believers. The group raised more than $47 million in Ether (ETH) to purchase an original copy of the United States constitution at auction. The group ultimately fell short in its bid but the audacity of that endeavor brought DAOs power to crowdfund to mainstream attention.
The ingenuity of that move and what it nearly accomplished provides a template for how traditional crowdfunding could be better managed. ConstitutionDAO got tens of thousands of addresses to donate $47 million without a marketing team or a dedicated growth director.
Beat that GoFundMe.
DAOs currently have over $10.5 billion locked in different treasuries with over 1.7 million token holders, according to data from DeepDAO. But, what exactly are they?
DAOs are a system of hard-coded rules that define which actions a decentralized organization will take. They are leaderless member-owned communities. A DAO is essentially a co-op that governs itself using votes tallied through blockchain technology. Smart contracts run the entire group.
Read more on cointelegraph.com
