An Explanation Through Story
Pooh, Rabbit, Tigger, and Kanga sat in the Hundred Acre woods arguing about the lack of honey. When Christopher Robin arrived in the Hundred Acre woods he listened to each of his friend’s complaints. At the end of the meeting, Christopher realized that the problem was Rabbit having too much control of the rations of food in the Hundred Acre Woods.
Christopher was very clever and at the age of 25, he had already learned about smart contracts. He pulled out his laptop and created an automated system for governing the rations of his friend’s village. Each of his friends was given a token of governance that gave them the ability to vote on how the rations would be shared. The little critters agreed upon the terms of distribution and the program handled the distribution autonomously fairly and evenly passing out rations when needed— the Hundred Acre Woods became self-sustainable and from then nobody, not even Pooh, ever went hungry again, the dwellers of the Hundred Acre Woods and Christopher Robin were free to go on new adventures and not worry about fair distribution or having arguments about who got more than they were supposed to.
This story is DAO in a nutshell. DAO stands for Decentralized Autonomous Organization. It’s a system that takes decision-making and makes it more decentralized and less controlled by a single entity. Holders are given the ability to vote on certain situations as a whole and decisions are then implemented by the decentralized system and carried out autonomously.
In the above story, Rabbit was the single character with all of the power so Christopher made a way for all of the dwellers of the Hundred Acre Woods to have some input. The entire purpose of the DAO is to create an organization without the iron grip of just one individual or group of individuals that may use that power for greed and personal gain only.
The entire idea of a DAO is to automate companies and the way things work at the companies to let the power rest in the stakeholders of said company, thus ensuring a fair and just distribution of assets amongst everyone.
There are many DAO programs on the Ethereum (ETH) and Aragon(ANT) blockchains, but there are not that many on the Solana (SOL) blockchain. Today we are going to introduce you to the DAOs that do reside on the SOL blockchain in hopes of letting you better understand the burgeoning growth of Solana and its capabilities.
The Solana ecosystem is robust with many projects already running and many more coming in the future. With fees already less than Ethereum, the sky is the limit for just how much can be done on this amazing platform.
As stated by their description on their website: Badger is a decentralized autonomous organization (DAO) focused on building the products and infrastructure necessary to accelerate the growth of Bitcoin in Decentralized Finance (DeFi) across multiple blockchains.
Badger Finance is a community DAO, focused on bringing Bitcoin to DeFi. The DAO’s debut products are Sett, a yield aggregator, and Digg, a BTC-pegged elastic supply currency. The BADGER token is the native governance token for the DAO, granting voting rights over the future direction and use of the treasury.
Users can bring forth their bitcoin and use it to yield profit. The control of the DAO is handled by the individual users of the Badger protocol and not by VCs (Venture Capitalists) or Whales (Investors with an absurd amount of crypto assets) At the date of writing this article, there is a value locked in on the ecosystem at $811,651,664 with more than 22K users. Badger prides itself on its growth and the team’s strict focus on security.
On their website, Hiro LaunchDAO describes itself as “innovation to Solana in a way that holds to blockchain ethos,” Providing not only equitable and open access to venture funding new projects in the Solana ecosystem- but also equitable and open access to the stewardship of those funds and decision-making over which projects to incubate. By creating a meritocratic network with an innovative consensus and incentive mechanism. Hiro ensures the longevity of its portfolio projects and moves investor focus into the long term.
“The HIRO platform couples entrepreneurship with an accelerator that leverages and rewards the wisdom of crowds through innovative consensus mechanisms.” What this means in simple terms is that Founders create an idea or organization, then a public sale of assets -say coins- goes into a “war chest” for investors to use. Those investors take that capital and divide it and make decisions on what to use it on. Once the decisions are voted on that capital is passed on to project funding where the ideas are then passed to the project managers who develop the product and pass the profits back to the founders, the founders take the profits and send in ideas for the next development or project and the cycle continues. HIRO touts itself as a platform for all creators no matter if you are a founder, investor, or manager.
As a founder, if your proposal is solid then you are given money from the war chest to follow your idea to fruition. Project Managers earn reputation from their wisdom and their ability to help the project grow. Founders, Managers, and investors all interact positively to create a successful future for the project.
According to the website: Honey DAO is a decentralized VC focused on assisting and funding early-stage DeFi projects. Currently, the DAO has 120+ members including influential devs, founders, and traders. Currently, their investment size is $50K to $1m+. They help invested projects with community management, code review, graphics, job assistance, expanding partnerships, and more. Their portfolio includes Divergence, Thales (Synthetix), and Insure DAO.
“HoneyDAO is a collective of DeFi influencers, seasoned investors, crypto developers, and founders collaboratively working towards improving DeFi, one project at a time.” This means if you have an idea for something on the Decentralized market then you could essentially contact members of the DAO for funding.
There are also games such as Project seed which is meant to use its SHILL token for the DAO aspect of its game- mainly voting. Dapper Labs is now in the conception phase of creating a process to make DAO more mainstream for anyone that wants to be a part of the system.
The Solana network is still in its infancy in a lot of areas-especially DAO. That infancy has not stopped the constant growth and consistent influx of ideas that show up daily. With new ideas and markets being introduced the use of DAO will become more integral to the valid growth and sustaining of the metaverse and DeFi circle.