Published
2 years ago on
April 25, 2022
Table of Contents
One of the key features of digital currencies is that they are decentralized; this means they are not controlled by a single institution like a central bank or a government but instead hosted in a variety of networks and nodes. This allows users privacy and security in a way that isn’t possible in transactions involving fiat currencies.
Inspired by this very concept, a group of developers came up with the idea of a Decentralized Autonomous Organization, or DAO, in 2016. DAO essentially automates decisions and facilitates crypto transactions.
The developers created DAO to eliminate any margin for human error or manipulation. DAO allows for security, anonymity, and speed in transactions while also providing token owners the right to vote on possible projects. The entire concept rests on decentralization and sharing of power, the way cryptocurrency functions.
How does DAO work?
A DAO is based on a smart contract with no single point acting as an authority or influence. When a smart contract is created and deployed, the only way to change it after is through a “community” vote. Likewise, any money collected by the DAO cannot be spent unless the expense has been approved by its members. Since the contract lives on the blockchain, its contents are visible to anyone with the address of the contract.
After the smart contract is hardcoded and deployed on the blockchain, the DAO starts collecting funds for the project goals. This task is performed with the use of native tokens, which are a currency tied to the smart contract. Once users invest in the project, they earn special rights, including voting, goal setting, and providing feedback.
Current DAO projects
Typically, a DAO falls into categories of philanthropy, social media, community engagement, and protocols, among others. The possibilities are endless, and some projects have taken the spotlight.
Julian Assange is among the world’s best-known journalists, having published several papers on the war crimes committed in the Afghan war. After Assange and WikiLeaks started facing legal troubles in the United States, major banks and payment processors stopped validating donations for the WikiLeaks platform, leading Assange to innovate.
Today, should people wish to support WikiLeaks, they can do so by donating using cryptocurrency. The platform has taken it a step further, with Assange teaming up with digital artist Pak to create the AssangeDAO. The DAO is based on an NFT project called ‘Clock,’ which displays the number of days Assange has been in prison for.
The funds raised for the DAO totaled over 17,000 Ethereum, which equaled about 50 million dollars at the time. All of the funding was going straight to supporting WikiLeaks and its work.
This is one of the best examples of how movements like Assange’s can no longer be controlled by central authorities.
DAO also acts as a valuable tool to help scientists and researchers fund important work. VitaDAO specializes in providing a means for biotech scientists to secure funds for longevity research. Unlike grants or investments, however, VitaDAO creates an IP-NFT (Intellectual Property - Non-Fungible Token) for each project. This IP-NFT attracts funds for a project without the need to register a patent; it manages the progress of the study and research submissions through its open-for-all model and involves people directly with your research.
When the research and studies bear successful results, peer members also get a say on pricing, availability, and how the data and findings will be distributed.
Stereotypical whales are usually able to manipulate markets and push out regular users. They have access to early rounds, private sales, discounts, and arbitrage, which are privileges locked to regular investors.
Regular users are only interested in having a level playing field where everyone gets an equal opportunity to build wealth and contribute to a decentralized financial world. This, however, requires money and technical know-how, all of which are resources only available to the wealthy.
White Whale aims to create a platform that enables the enforcement of the UST peg in a decentralized manner by providing the technical tools users need to participate in complex trades like arbitrage. Users are empowered to earn profits while contributing to keeping the peg, making the entire ecosystem more secure and efficient. What’s more is that the project works as a DAO, allowing every community member to participate in major project decisions through casting a vote in governance polls.
White Whale’s ultimate goal is to stabilize the entire Terra ecosystem through community arbitrage. They enable this through their simple, user-friendly processes wherein users will only have to deposit UST into the ARB vault to participate and withdraw UST whenever they want. This makes the transaction clean and simple for users while complex operations occur behind the scenes. In addition, users face no impermanent loss, and the WHALE token will have a wide variety of functions for the ecosystem.
Conclusion
DAOs have come to offer a viable alternative to the classic centralized organization management model, and with good reason. The low risk of human error is certainly a big factor, but the added benefits of security, control, and availability to regular users make DAO a revolution in finance management models.
This is a much-needed movement in the crypto space for regular users, and White Whale will not only take the community’s opinion through its governance polls but also allow smaller retail traders the chance to benefit from arbitrage and other trading strategies that were usually reserved for the stereotypical whales.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
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