Disclaimer: The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of the editorial team at crypto.news.
In a previous discussion, I highlighted the stabilization of the crypto market due in part to regulatory clarity and the increasing involvement of traditional financial institutions (tradfi). However, amidst the ongoing conversations surrounding Bitcoin ETFs, institutional roles, AI’s blockchain ambitions, and regulatory developments, Decentralized Autonomous Organizations (DAOs) have taken a backseat.
Before the last bull market surge, DAOs emerged as a popular avenue for blockchain-based entities to eliminate centralized leadership by operating as member-owned communities managed through decentralized systems using smart contracts. This structure provided a decentralized fundraising platform, offering voting rights and decision-making power to contributors. With the crypto market expanding by 12 times between early 2020 and late 2021, investor interest in blockchain projects grew, with many venture capitalists preferring token investments over equity in web3 startups.
The World Economic Forum even labeled DAOs as potentially the “business structures of the future,” describing them as the “natural entities of web3.” As the crypto industry experiences growth in both retail and institutional participation, showcasing innovations in decentralized finance (defi) and tokenized real-world assets, it raises questions about the future role of DAOs.
Looking ahead, DAOs face uncertain legal standing as full-fledged business entities, but this hasn’t hindered their evolution. Beyond lending and borrowing protocols, exchanges, funding, and gaming, DAOs now support community-building, collaborations, and innovation. For instance, Friends With Benefits is a social DAO promoting community, creativity, and professional networking for developers, artists, and content creators.
The appeal of DAOs is also evident in memecoin and NFT projects with large followings. Dogelon Mars, an Elon Musk-inspired memecoin, recently transitioned to a DAO following a significant donation, allowing the community to decide how to utilize the funds. This shift towards community-driven decision-making is also observed in NFT, web3, and gaming projects.
VitaDAO, a community-owned collective, funds research on longevity to enhance quality of life. Members holding VITA tokens can propose and support research projects while contributing to governance decisions, aiming to combat age-related diseases.
As blockchain technology diversifies its applications, expect to see more organizations embracing DAO structures to empower their communities. Like other segments of the crypto and blockchain sphere, DAOs offer advantages and complexities, with success hinging on community management, regulatory compliance, and vision execution.
In conclusion, DAOs present a revolutionary approach to community governance in the crypto space, offering unique benefits and challenges. Stay tuned for more insights as organizations explore the potential of DAOs to empower their communities.