DAO – new opportunities for the mass user
Today we are witnessing the birth of a fundamentally new model of economic self-organization of Internet users. Blockchain technology, which allows users to create decentralized autonomous organizations, is becoming mainstream before our eyes. Corporations, banks and governments around the world, one after another, start to research and experiment with it, if not to master the blockchain.
But the main task of the DAO is to create decentralized self-sufficient communities where users can solve the tasks without involving traditional centralized structures. One of the main directions of the development of the blockchain industry is the creation of simple and affordable tools for the implementation of their own DAO projects by any person or group of people. Today, this process is not so simple, as it requires a fairly deep understanding of blockchain software algorithms and smart contracts. Developments of this level can not afford most potential startups.
For this reason, a number of platforms have appeared that help to form their own DAOs on the basis of existing blockchains. Most often this is achieved by creating a sidechain – an offshoot of the main blockchain, where developers create their own smart contracts and form the economic model of the project.
The largest figure in this arena is still Ethereum, which provides developers with the infrastructure for creating smart contracts. On the basis of the Ethereum blockchain, there are such DAOs as Augur, Slock.it, Digix. It is worth noting such platforms as Bitshares, NXT, Lisk, Rootstock, Wings, each of which has its own advantages and disadvantages.
ICO Investment market for everyone
Investments are an old and proven tool to increase capital, but the traditional investment market is inaccessible to most people, as it requires large financial investments and certain professional skills. DAOs offer a solution to this problem by creating their own investment market.
In the new crowdfunding paradigm, anyone can become an investor without leaving home, having only ten dollars in an online wallet. Associated with this is the growing popularity of ICOs, which we have been observing recently.
Crowdfunding is the most logical way to attract financing for large decentralized projects on the network. But, unlike the Kickstarter crowdfunding model, which is simply an advance payment for a product, DAOs have come up with a model more similar to issuing securities, as they are interested in long-term involvement of people in their domestic economy.
This model is called ICO (initial coin offering). It turned out to be so effective that it is used by almost all new blockchain projects to obtain the necessary initial capital and the initial distribution of its tokens.
The essence of the model is that an investor can invest money (usually in cryptocurrency) in a project at an early stage of its development and get not only the growth prospects of purchased token assets, but also various bonuses within the system of this DAO. Typically, token holders also have the right to vote in making DAO important decisions.
At the same time, it should be noted that the easy accessibility of this investment market can play a trick with inexperienced investors. A high level of awareness is the key to success in any high-risk market and it is not easy for an ordinary user to become a successful online investor. Unscrupulous developers, “pump and dump” schemes of large players, simply an incorrect assessment of the project prospects – all this can lead to an unprofessional investor to lose invested money.
ICOs are still new to most investors, but the community has already seen a possible problem and is creating real mechanisms to solve it. But The DAO was launched too early and contained a number of software vulnerabilities, one of which could be exploited by attackers.
One of the new generation of projects aimed at creating a decentralized community of expert investors is Wings.
Wings is a blockchain platform on the basis of which any network user can plan, create and maintain their own DAOs and earn money by predicting the success of the DAO of other users. The platform works on the Rootstock sidechain, but in the future it is planned to switch to its own blockchain. Interestingly, Wings itself is currently in the ICO stage and within a few weeks has sold Wings tokens for more than 1,500 BTC (more than $ 1 million).
The economic model of the project is designed to create an expert environment where DAO developers will be able to receive feedback about their projects in real time, and investors – objective information about the risks and benefits. Wings token holders will be able to assign a rating to those under development by the DAO, evaluating their expected success in a number of ways. After crowdfunding of each DAO created within the framework of the project, participants will receive rewards in Wings tokens. The size of individual awards will depend on the accuracy of the forecast given at the stage of development. Accurate forecasts will increase the participant’s rating, which will also affect his income. It is important to note that the platform offers the opportunity to delegate your vote to an expert with a higher reputation in order to increase your chances of success.
Thus, the project hopes to create an autonomous ecosystem of investors and project authors, acting on the principles of futarchy and liquid democracy, where each project will go through a stage of public criticism and improvement, and community members will be able to more adequately assess their risks.
It is worth noting that Wings pays special attention to security and offers a number of innovative solutions in this area, including formal verification of the contract code, the use of functional programming and the creation of backup protocols.
For increased security created by the DAO, the Wings team developed disaster recovery protocols that work with the implementation of the RSK Federation, which includes well-known companies in the industry. All BTC deposits on the Wings blockchain will be protected by the multi-signature of the federation and the withdrawal of funds through the sidechain transaction will be impossible without the consent of the majority of the federation participants.