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Stop starting a company and start a DAO



DAO does not specifically refer to an industry or field, it is an organizational governance structure, just like a limited liability company can engage in various businesses, DAO can not only manage assets, but also do DeFi protocols, NFT... What we are discussing here is DAO The advantages and disadvantages of this governance structure, and use cases to illustrate how DAO is governed. Any organization is inseparable from decision-making, and how to make decisions depends on the governance model. As the most common organization, the current governance structure commonly adopted by the company is management + board of directors: the management supervises the daily operation of the company, and the board of directors provides strategic supervision and reviews the management. Corporate governance is mainly reflected in the right to claim and control the residual value of the enterprise, such as whether the net profit is used for shareholder dividends or put into reproduction. The goal of governance is to improve the value of the company and maximize the interests of shareholders. Corporate governance and companies have evolved together for centuries, but the current mainstream governance model is not the best practice, nor is it suitable for all corporate organizations. For example, due to limited financial resources, individual shareholders generally have a small share in the company, and do not have enough motivation and strength to supervise entrepreneurs, so they are willing to become passive shareholders. Another example is that Internet platforms use the content-zce or data produced by creators to obtain advertising revenue. Under the traditional corporate governance structure, such revenue is owned by shareholders, and there is no reasonable incentive mechanism for creators. In addition, there are problems such as opaque governance process, dislocation of incentives, and low governance efficiency. In 2016, the Ethereum mainnet was launched, and the earliest and most expected application scenario of the smart contract automatic execution function provided by it is governance. Such organizations that collaborate by enforcing a set of rules on the blockchain are called DAOs (Decentralized Autonomous Organizations). At that time, people were so excited about The DAO that the decentralized venture capital fund The DAO raised $150 million in a short period of time. The DAO replaces shareholders with token holders, allowing the largest token holders to effectively serve on the agreement's board of directors. This de facto board helps guide the direction of the protocol by proposing or voting on upgrades and guiding future development. Bank of Kenya warns customers not to conduct cryptocurrency transactions: According to news on June 8, some Kenyan banks, such as Kenya NCBA Bank, have begun to issue warnings to customers engaged in cryptocurrency transactions to be alert to related risks. The warnings have reportedly been sent to customers who \"purchased cryptocurrency on cryptocurrency exchanges\" using credit and debit cards. NCBA stated that according to the Central Bank of Kenya (CBK) Circular No. 14 of 2015, virtual currencies such as Bitcoin are not legal tender in Kenya. Therefore, investors are not protected in the event of failure or closure of the platform holding or trading cryptocurrencies. (News.bitcoin) [2021/6/8 23:21:32] The core function of DAO is proposal and voting. Through DAO tools like Aragon, DAOStack, DAOhaus, Llama, MolochDAO and MyCo smart contracts, it can handle voting, Issues related to the distribution of funds and raised funds. There are also tools like Snapshot, dedicated to managing proposals voted on by token holders, which make it easy to view relevant details and voting status of a proposal. Using these tools, DAO can transparently and efficiently complete the traditional corporate governance function: control assets. One of the common functions of DAOs is to control the use of treasury. For example, a profit-oriented investment fund adopts the organizational form of DAO. Stakeholders can be anonymous and can be located anywhere in the world. They can reach a consensus through proposals and votes, and manage the assets of DAO together. Appointments to important positions. DAO can reasonably appoint personnel through voting, and those with community prestige are more likely to be recognized by the community. Bitcoin Analyst: Look at the market dynamically, don't build stagnant positions: Bitcoin analyst Salsa Tekilla recently shared his insights on trading cryptocurrencies and managing risk. It said that he looked at the market from the perspective of "continuous dynamics" rather than establishing stagnant positions. He also explains the "market scalping" technique he uses, which is a technique that takes advantage of volatility on lower time frames. SalsaTekilla added: "The longer you trade, the greater the impact of external factors on it." (CryptoGlobe) [2020/8/31] Protocol upgrade and new features launched. Protocol token holders are stakeholders, but the power to develop and launch the protocol is often in the hands of a small group of project parties, and this power can be delegated through voting. Changes in the token economic model. The economic model set in the early stage of some projects is not applicable during the development process, and it is necessary to issue additional tokens or change the distribution ratio of tokens. Development proposal. For projects with limited development resources, all functional requirements cannot be met, and a vote is used to decide whether to develop a certain function. In a broad sense, not only projects with DAO in their names are decentralized organizations, but if an encryption project itself is governed in a decentralized manner, that is, token holders can discuss the direction of the project and various parameters. The project can also be regarded as a DAO if it is set to vote instead of only being decided by a centralized team. For example: Token holders of MakerDAO, which has built a decentralized stablecoin, can manage the system and vote on parameters such as stability fees. Curve DAO will generate transaction fees and provide income dividends for locked token holders. The longer the Curve token (CRV) is locked, the more voting rights and rewards the DAO member gets. Unlike traditional companies that share revenue proportionally, Curve DAO has a system that weights voting rights and revenue shares based on how long a token holder has invested. Peter Schiff: Don't be too optimistic about Bitcoin. Hope is not a good investment strategy: On June 30, Peter Schiff, a gold supporter and Bitcoin opponent, tweeted to warn Bitcoin buyers not to be overly optimistic about what quantum economist Mati Greenspan published. One opinion poll was overly optimistic. Hope is never a good investment strategy, he said. And in the poll initiated by Mati Greenspan that he mentioned, 42% of the respondents said that Bitcoin will outperform the Dow Jones Industrial Average (DJIA). [2020/6/30] On February 3, the (YFI) community passed the "proposal to issue 6,666 additional YFI tokens" with a support rate of 83.46%. On April 1, Kava launched a mainnet upgrade proposal, which is planned to be upgraded on April 8; on January 23, the 0x community passed the protocol V4 upgrade with more than 99% support. The LAO The full name of The LAO is "Limited Liability Autonomous Organization", which means "Limited Liability Autonomous Organization". It achieves compliance through the tools provided by OpenLaw. OpenLaw acts as an "administrator" during the creation and maintenance of The LAO, charges a certain development fee, and will not exercise any control over The LAO unless requested by community members. As a legal limited liability entity in Delaware, The LAO allows community members to purchase equity and handle issues related to voting, funding, and fundraising distribution through smart contracts similar to MolochDAO, so as to allocate to startups and other projects that need financing. The LAO community has so far raised 15,119.82 ETH, worth $36.74 million. The official website shows that 19 proposals have been voted through and 3 proposals have been rejected. The projects supported by The LAO can be roughly divided into five categories: decentralized asset management, trading and derivatives, NFT, development and tools, and infrastructure. News | The Ghana Securities and Exchange Commission warns citizens not to participate in digital currency transactions: According to CryptoGlobe, in Ghana, users accused a digital currency company called Global Coin Community Help of illegally freezing their funds and asked the Ghana Securities and Exchange Commission (SEC) to intervene and help They get their funds back. Paul Ababio, vice chairman of the Ghana SEC, said that people should stop participating in digital currency transactions, and if they still choose to do so, they can only do so at their own risk. [2019/1/23]Flamingo DAO Flamingo DAO is the first NFT-themed DAO incubated by The LAO community. It has attracted attention because it purchased the CryptoPunks collection "CryptoPunk 2890" at a high price of over US$760,000. Flamingo's functions include: Purchase NFT , Carry out ownership division and access to existing DeFi platforms. Pre-order the works of well-known NFT artists, craftsmen, and creators. Buy digital artists' respective community or social tokens to invest in digital artists. Manage purchased works and create digital museums and galleries of "hyper-virtual worlds" for the public. Mining and investing in supporting NFT core infrastructure and projects. Become a member of Flamingo DAO to vote on the above business proposals. You can become a member by investing in ETH. Every time you invest 60 ETH, you will get 1% of the voting rights (100,000 Flamingo tokens), and each person can get up to 9% of the voting rights , Tokens are not transferable, and a majority vote of members is required for transfer. Voting rights of members include: Voice | Changpeng Zhao: Don’t let the temporary upward trend of the market change, you must continue to invest in construction: Changpeng Zhao tweeted: “The market finally showed me the upward trend I hoped for, but don’t let this change you, continue Let’s put it into construction.” [2018/12/21] Determine the investment target and investment method Issue new governance tokens to replace the existing Flamingo tokens Future DAO holding assets Asset types (ETH, DAI, BTC or any interest-bearing assets) determine all funds And asset flow, use method, income distribution Flamingo organizational structure Members stay, absorb new members Most votes to dissolve Flamingo, or transfer Flamingo investment assets to another entity or institution Moloch DAO Moloch DAO is a project to promote the development of the Ethereum ecosystem A DAO offering stipend rewards with the goal of contributing to the Ethereum infrastructure and solving public problems in the open source development of the ecosystem. Moloch enables voting, membership, governance, and its code is a coordination mechanism. To become a Moloch DAO, each person needs to donate 100 ETH. If a member disagrees with the overall decision of the DAO, the member is allowed to withdraw and withdraw funds. The MolochDAO contract has been forked many times to create other DAOs. Vitalik Buterin commented that Moloch DAO is a community-driven effort to maintain, develop and improve the atmosphere of the Ethereum community. MetaCartel Ventures Early on, MetaCartel created a DAO to fund hackers and builders developing new products in the Ethereum decentralized ecosystem. In the past year, it has provided early funding for many of the most popular emerging projects in this space, including: Mintbase, Known Origin, rDAI, Kickback, Sablier, DeFiZap, RocketNFT, Gelato Finance. Based on the success of the MetaCartel DAO with the grant program, MetaCartel formed MetaCartel Ventures, a fund for for-profit investing in dapps with a membership of 33 (as of now) accredited investors and builders, including many in the crypto community experienced builders such as Zapper and Rai. Its essence is a decentralized organization that uses the v2 version of MolochDAO to manage organizational funds, allocate shares, and manage voting among organizational members. 0x DAO On April 13, the decentralized trading protocol 0x (ZRX) announced the official launch of 0x DAO on the main network. The initial community treasury has 2 million ZRX, currently worth about 4.22 million US dollars. Anyone can share ideas on the use of DAO funds on the 0x forum, but a minimum of 100,000 ZRX (accounting for 0.01% of the total supply of ZRX) is required to submit a proposal. Each vote will last for 72 hours and can be voted directly on the ZRX Portal. In the initial stage, 0x DAO will only be able to control the use of community funds, not the core agreement. Going back to the corporate governance mentioned at the beginning of the article, in fact, in addition to the well-known joint-stock company system, governance is achieved through management + board of directors. Co-ops are also a very unique governance structure. The idea of a cooperative dates back to the mid-18th century, and it is a company that sells shares to a company user, creator or customer. However, because cooperatives are relatively inefficient both in terms of capital and operations (organizing, coordinating, and motivating millions of equal-equity shareholders is very difficult) cooperatives are easily outcompeted by traditional corporations with leaner structures and easier access to capital . American outdoor sports brand REI is perhaps the most well-known consumer cooperative. When REI is profitable, consumers share an annual 10% share of profits based on their qualifying spending. Traditional companies increase returns to shareholders by distributing dividends or repurchases, while cooperatives benefit consumers/users and further create value by rewarding consumption. Blockchain can improve the operational efficiency of cooperatives, allowing cooperatives to create a more attractive model and embed it on a decentralized template. But the governance innovation here is still mainly reflected in efficiency and automation, rather than its underlying design. It can be found that many DeFi platform tokens distribute tokens to core users and those who have contributed to the platform, allowing them to share the dividends of platform development. This is very similar to the cooperative model.


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