Thread by @vhictorry

There's been so many DAOs Coming Up lately.
In light of this, I decided to give a brief explanation on what DAOs really are.

A thread 🧵on DAOs

-Walk with me-

DAO has become a popular trend. In fact, in the past year, we have had many DAOs come
up. But what exactly are DAOs and how do they impact other narratives?
DAOs are simply Decentralized Autonomous Organizations run by a group of people with
collective interest.

On the other hand, decentralization is taken to mean that there is no central body that runs
the show in terms of funding, decision making and implementation, etc.
Well, that is the essence of a DAO or DAOs, which is why it is commonly associated with
Decentralized Finance.

since the latter allows individual involvement and control instead of
control by a third party or a single entity like the government. Moreso, we have many DeFi
protocols that have adopted the DAO model for management— Uniswap, Yearn finance, Marble Dao, e.t.c

But if a DAO is created by individuals seeking collective interest, how does one ensure that
It is not affected when a person goes rogue & begins pursuing a selfish interest?
"Smart contracts"
The wheels of a DAO are kept running by smart contracts,

into which rules governing a DAO
are encoded. So governance rules cannot be changed except by an agreement from the
majority of members themselves (voting). Even so, when changed, the rules cannot be
reversed because of blockchain's transparency and immutability.

Thus, the case of he who pays the piper dictates the tune is avoided. This time around, the
piper (DAO) must play the tune (rules) that everyone or the majority has agreed to.
DAOs use rewards to incentivize good behaviour among members so collective interest
can be achieved.

IMO, the Bitcoin network is a DAO, even with the absence of smart contracts to encode
rules. The network's security is the collective interest for every participant (miners). Also,
they are incentivized to act in good faith with mining rewards (currently at 6.25BTC/validation).

It is unlikely that a participant would want to act in bad faith because
of the resources he would need to do so (plenty of nodes with high computational power). Despite the dominance of DAOs in DeFi, they can find relevance in NFTs,

especially with
respect to managing the funds gathered from NFT sales. Thus, more than just owning NFTs,
holders can be involved in every inch of the way on how funds are spent and used to
develop the project.Bringing DAOs to the traditional setting,

most people believe that it is impossible for them to
co-exist. However, that is not the case. We see what Adidas and Nike are doing with NFTs
Other than this, traditional businesses can introduce governance tokens that allow their
users to vote on upcoming products.

This way, it could avoid releasing products that will not
resonate with its audience. Also, while the tokens may not be tradable on a secondary
market, they could be redeemed for physical items to provide more utility.

Thus, the case of he who pays the piper dictates the tune is avoided. This time around, the
piper (DAO) must play the tune (rules) that everyone or the majority has agreed to.
DAOs use rewards to incentivize good behaviour among members so collective interest
can be achieved.

Thanks for reading, here's the start once again

https://twitter.com/vhictorry/status/1523324433246662662?t=jLH3dPXQW2gaEwnbbe4YUQ&s=19

#Dao #DAOs #BTC #juno #cosmostation #cro #metis #echelon #sol #evmos