DAOs Are Changing Our Future!!!

If 2020 was all about DeFi, 2021 was all about NFT, then what 2022 will be all about? The most logical guess will probably be DAOs. As Wyoming became the first state to recognize DAOs as legal entities, DAOs are one of the most important constructs in crypto, and DAOs will change every aspect of the economy, politics, and probably even your social life in the years ahead. If you want to know how DAOs affect your life, do stay around and watch till the end of this video. Hello guys, welcome back to another video on the BoxMining channel. My name is Jemmy and I hope you're doing well. Recently, there seems to be a buzzword in town. Everyone is talking about DAOs, so I guess it's safe to start the video by explaining what a DAO is. DAO stands for Decentralized Autonomous Organization. So what on earth does that mean? Holy Jesus, what is that? Basically, it's an organization that has its own rules and structure written in code. They have an objective to provide a decentralized business model for all future enterprises. In order for DAO to work, you'll need four things. A set of rules, a token, voting rights provision, and also a very clear structure or roadmap. One important aspect is that all code is open source. This is to eliminate human error or manipulation by having an automated crowd-sourced process of decision making. You don't need a CEO or any particular person to be in charge. Instead, all members within the organization can vote for any implemented change. Members of DAOs used tokens to vote on rules of a larger decentralized protocol. Well, of course, the more tokens you have, the more votes you'll get. The most famous DAO was actually due to a major hack of Ethereum back in 2016. For those of you who don't know what's going on, this is what happened back then. After raising $115 million worth of Ether through a token sale, the DAO was hacked due to vulnerabilities in its code base. So a majority of ETH holders vote for a hard fork, which is the Ethereum we are seeing now. Fast forward to today, from what we have seen, DAOs are largely used to execute financial transactions. They allow users to borrow crypto, land crypto for interest, buy and sell crypto. But it doesn't necessarily fit only into DeFi Box. Its potential applications are simply too great to be relegated to just DeFi alone. DAOs are more of a model of governance than a specific use case. The concept of the DAO can be applied in many different sectors of society in the future. For example, DAOs may administer elections, execute real estate transactions or govern some other sector of society. It's important to understand that DAO is a broad term that encompasses a huge number of different types of groups and businesses. Well, let's just say we apply DAO to a very famous Reddit community, WallStreetBets. Right now, people on Reddit are just talking about stocks that members should go and buy themselves. But what if the DAOs allow members to contribute funds and invest them after a democratic vote? Or what if we apply DAO to a sporting club so members can decide whether the budget is spent on a new football jersey or a fridge for a tuck shop? Well, the potential use cases here are endless. If you guys can think of any other scenario we can apply DAO to, do comment down below and let us know. Well, there's so many different types of DAO. The first one I will talk about is the collector or investment DAO. So they let people pull capital with the aim of investing, whether it's DeFi or NFTs or even professional sports franchises. Please, the DAO is a great example of this. It is a group of NFT enthusiasts and really famous one. I'm sure you'll recognize it. It's a regional Doge NFT meme. So they bought the original Doge for $4 million and fractionalized the NFT. They're selling fractional ownership as a Dock token so investors can buy as many or as few Dock tokens as they could afford on Fractional.art or on the centralized exchange, Miso. Hi, I could play to earn money, huh? What am I doing in my life? Next up, we have the protocol DAO. Developers created protocols that let people trade and learn crypto. This should be familiar to most people if you have been using platforms like Aave, Uniswap or Compound. Any user can propose ways to improve the project and token holders can vote on whether or not the developers should move forward with the proposal. Once again, the more tokens you have, the more voting power. We also have the social DAO. They intend to bring like-minded people together in online communities coordinated around the token. The leading example is Friends with Benefits, the FWB token. To join the community, members need to acquire 75 FWB tokens. Once you're in the group, you'll have access to your community full of crypto builders, artists and some exclusive events. Other social DAOs use NFTs as the mechanism for unlocking access to a broader community. A great example would be Bot8 York Club. Owing a Bot8 will unlock access to the Bot8 Discord, some exclusive events, NFT airdrops and merchandise etc. This is what you call status of a society. The last type of DAO I want to talk about in this video is the created DAO. Which basically means famous people or influencers to form a DAO with their fans so that the fans have an even stronger incentive to help the influencer to grow. And influencer will be more aligned with the audience in the long term. A great example of this will be Irene DAO. Irene DAO started out as a sticker collection featuring different pictures of Irene in various poses. Each photo features text overlay, often with popular crypto means such as Wagney meaning we're going to make it and GM meaning good morning. The stickers were then tokenized into 1100 NFTs and of course listed on OpenSea for public to buy them. And within a week, the average price of an Irene picture rose to the highest of 2.46 ETH. And with this one in particular in which Irene holds up the word SEAM on a sign, sold for 4 ETH which was roughly worth over $12,000 at the time of that purchase. That's the power of seams. I mean meme. Of course you could also argue that's the beauty of a decentralized society even though you may find quite beside at first. Well, however, there are some concerns of DAO that I would like to address in this video. Nothing is perfect, given the technology is doing need and definitely continue to attract more attention. It will also arise some structural issues, some criticism over legality or even security issue. As a DAO can be distributed across multiple jurisdictions, there's no legal framework. If whales are holding the majority of tokens, they can also manipulate the outcome. So token distribution becomes a major factor here. Another concern I might have is from regulation, like how do you govern them? These new business models have created risks for developers and members of the communities. They operate in a legal black hole because laws don't recognize them as legal entities. This makes it hard to hire staff, rent premises, take out insurance or attract investors. More concerning is the potential legal liability that might attach to DAOs. As we know, the SEC claims some blockchain-based companies might have made illegal offers of unregistered securities. There's also a lack of understanding about crypto from new investors, not to mention a technical competence one needs to understand to feel good about investing. So after weighing all the benefits and concerns of DAOs, where do I think DAO is headed in the future? While obstacles are out, DAOs represent a paradigm shift in economic organization. If Web3 is to become an internet collectively owned by its users, DAO will be the organization primitive in which that ownership is meted out. We have seen new DAO models are forming and we can see the needs from companies to implement DAOs. Of course, the shift definitely takes time. It could be a generation shift in corporate legislation, but it sets the path for digitally native generations to operate much more efficiently and transparently. So that's it for today's video. Don't forget to have an amazing day. Smash up the like button and subscribe to the BoxMoney channel. We're on our way to 1 million subscribers, just very, very slowly. That's why I need your help here. If you want more regular updates from me, do follow me on Instagram and GoodCryptoChamps YouTube channel. And see you guys very soon.