Is DAO the most eye-catching in 2022?

Speaking of blockchain, people can always know several words that appear frequently, such as decentralization, non-copying, non-tampering, smart contracts, etc. As for "decentralization", the related autonomous organization DAO has attracted much attention.

The full name of DAO is Decentralized Autonomous Organization, and its idea is to become a decentralized form of venture funds. From the conceptual disassembly, it can be seen that it contains two important features, namely decentralization and autonomy. Simply put, it is an organization formed by different individuals through blockchain, social media and other means to form a common goal. Kind of like our real-life companies.

However, DAO is different from real-world companies. Due to its decentralization and autonomy, there will be no executives, CEOs, shareholders and other roles in the organization. Therefore, there is no such problem as the investor advantage widens the capital gap between the owner and the laborer, and the problem of the continuous unfair distribution of resources is also solved. Previously, some Chelsea fans formed the Chelsea DAO. They plan to sell tokens to raise funds, while giving every fan the right to vote to influence the operation of the club.

Someone once said that the most popular project in 2021 is the NFT peripheral project, and it will become DAO in 2022. At the beginning of 2022, many investors also focused on the DAO ecosystem when looking forward to the market opportunities this year. For example, as the metaverse market continues to flourish, DAOs are gradually emerging in terms of utilizing and investing in the metaverse. Its features can make virtual land more accessible and help newcomers join Web3 to explore sharing, renting and investing in virtual land in the metaverse.

However, although DAO is highly regarded by people, it is still in an immature initial stage, and there are many problems. For example, it is greatly affected by the virtual currency market, and the difference between bull market and bear market also means the increase and decrease of DAO token incentives. The resulting market demand fluctuates, and individuals need to control the timing if they want to participate.

Furthermore, the DAO mentioned earlier by the author, in an ideal state, even realizes the utopian ideal, that everyone is equal, there is no exploitation, and the gap between the rich and the poor is reduced. But it is undeniable that the operations, functions and value distribution in DAOs are still in the early stages of development and are not ideal in practice. To sum up, there are the following 3 points.

1. Collective decision-making cannot make progress. One of the characteristics of DAOs is that every participant can make operational decisions. However, collective voting decision-making is not only inefficient, but also mechanical in the distribution of benefits.

2. The actual control rights are not equally divided, and the gap between the rich and the poor is still huge. The management of the DAO is actually the actual controller of the project. They use their own opacity of protocol code, funds, and market resource information to earn personal benefits.

3. DAO code errors may bring great losses. Once, because of an error in the code, the ETH bound in a DAO was stolen by hackers in large quantities, and the loss was even as high as 60 million US dollars.

At present, many blockchain teams have announced the DAOization of projects to achieve the goal of decentralization of the blockchain industry. The emergence of the DAO organization is an attempt at something new. Although it has yet to be perfected in many aspects, it also provides a new way to break through the increasingly rigid classes in the real world.