Cryptocurrencies have become quite popular over the past few years. The digital assets are still not acceptable officially but they have gained popularity among numerous growing businesses.
The blockchains have also been improved in the way they conduct their activities. One of the ways in which they have improved is through the formation of DAO. You may be wondering what a DAO is? Well, a decentralised autonomous organisation(DAO) is an entity with no central leadership.
It is formed by a cluster of blockchain wallets led by members that execute their activities through a code. The members in the DAO are governed by contracts in the blockchain technology which allow for the formation of rules.
DAOs are tasked with creation of protocols, voting on group issues and controlling assets. One of the biggest concerns of most people is the fact that DAOs look like you are trusting a bunch of people you met on the internet. However, it is crucial for you to note that you are not trusting the people but the code of the blockchain.
The following are some advantages DAOs;
They provide instant trust and transparency.
The best aspect of DAOs is how transparent and trustworthy they are. This aspect allows their entities to achieve their goals faster.
The participants do not need to know each other as the rules of engagement in the blockchain network are transparent, safe and open-chain.
In addition to that, no participant can alter the practices without getting approval from the majority of the members. This means that the main role of the DAO is to carry out the collective interest of the group.
They are community-based.
We are used to the traditional institutions where certain members have additional privileges such as voting rights compared to other members.
Well when it comes to DAOs there is no central authority. Each member has voting rights since it’s an even organisational structure with zero management.
At the development stage, the members could decide to meet at various social networking sites and contribute funds toward a certain objective that they wish to achieve.
It is important to note that these contributions are done via cryptocurrencies.
They incorporate smart contracts.
The DAOs acquire their consensus via digital contracts that are found on the blockchain network. The virtual contracts are tamper proof since they are designed to be self-executing and immutable.
These contracts are made in such a way that they do not require human direction at any point. This aspect makes the decision making at the DAOs faster and more convenient.
In addition to that, members do not need to be physically present for a vote to happen.
It is advisable to look for a blockchain developer if you decide to get a smart contract for your DAO. The contract should contain rules and regulations, guidelines, functionality and contact address.
A computer code is used in the operations.
In traditional institutions there are usually specific leaders running the operations. This is not the case in DAOs.
A computer code is used in running the operations. This aspect ensures that no individual controls the community. With such measures, decisions are made in a transparent way.