Disclosure: The views and opinions expressed herein are solely those of the author and do not represent the views and opinions of the crypto.news editorial.
I recently wrote about the stabilization of cryptocurrencies, in part thanks to regulatory clarity along with the growing and valuable role of traditional financial players (tradfi). But as the industry has been inundated with discourse around bitcoin ETFs, the role of institutions, ai's blockchain aspirations, and growing, if still unclear, regulatory activity, DAOs have been displaced from the center of attention.
Even before the previous bull run, DAOs became a popular avenue for blockchain-based entities to ditch centralized leadership by becoming member-owned communities managed through a decentralized computing system using smart contracts.
This system provided projects with a path for decentralized fundraising, granting voting rights and critical decision-making to those involved in funding. Like the crypto market increase Between early 2020 and late 2021, investor interest in the blockchain space increased 12-fold, with many venture capitalists preferring to invest in tokens rather than shares in a web3 startup.
The World Economic Forum even wrote about DAOs as potentially the “business structures of the future,” calling them the “natural entity of web3.” Now, as the crypto industry surges in both retail and institutional activity, and the industry can once again boast innovations, particularly in real-world defi and tokenized assets, it only makes sense to wonder what the role of cryptocurrencies will be. DAO in the future. .
As full-fledged business entities, DAOs face an unclear legal status, but that has not limited their expansion. DAOs are no longer limited to lending and borrowing protocols, exchanges, financing, and gaming; They can now expand to facilitate community building, flourish collaborations, and spark innovation.
For example, Friends With Benefits is a type of social DAO focused on building communities and relationships and fostering creativity, while giving its members full access to exclusive events and meetups, both in-person and online. It also serves as a professional network for developers, artists, and creative content creators to collaborate and find inspiration.
The DAO route is also becoming desirable for memecoin and nft projects that already have a large dedicated following. A recent example here is the Elon Musk-inspired Dogelon Mars memecoin project, which recently became a DAO following an anonymous donation of $350,000. Upon receiving the funds, his team went to his community to see what should be done with the donation. As expected, the twitter.com/DogelonMars/status/1768660762929533039?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1768660762929533039%7Ctwgr%5E0d8140084e10ff924ab247af90998a82939ff3e1%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Finsidebitcoins.com%2Fnews%2Fnew-and-best-meme-coins-to-buy-friday-march-15-crypto-doggy-dogelon-mars-bone-shibaswap-smog” target=”_blank” rel=””>community overwhelmingly opted to burn the equivalent amount of the donation into Dogelon Mars' native $ELON token to increase its scarcity.
Strong and vocal communities make nft, web3, and gaming projects perfect candidates for DAO structures. While still leveraging blockchain technology, some DAOs operate in new ways that interact with the world outside of web3.
VitaDAO, for example, is a community-owned collective that funds and supports longevity research to improve people's quality of life. Members who hold VITA tokens can select specific research projects for the DAO to support while contributing to governance decisions, with the ultimate goal of advancing the fight against age-related diseases.
As blockchain technology grows in use cases, expect to see more DAO use cases as organizations look to give power and voice to their communities.
Like most aspects and sectors within the broader cryptocurrency and blockchain ecosystem, DAOs offer undeniable advantages and benefits along with unique challenges and complexities. Ultimately, their effectiveness comes down to how they navigate and manage community relations and regulatory uncertainty, and how they execute their vision.
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