Bitcoin.com to introduce Bitcoiners to decentralized finance: KBW 2022
Corbin Fraser, an executive at Bitcoin.com, told Cointelegraph that they are also planning to release a prepaid debit card that rewards users with crypto.
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Corbin Fraser, an executive at Bitcoin.com, told Cointelegraph that they are also planning to release a prepaid debit card that rewards users with crypto.
Decentralized money markets function without a custodian, allowing only the original user to withdraw funds deposited by lenders and borrowers.
While it may be one of the most popular sectors within the crypto market, decentralized finance still has barriers to overcome before reaching mass adoption.
WHAT IS DAO? AND HOW DOES IT WORK?
Still, in continuation of what positives Blockchain technology holds for our present generation, another application of the technology is in the area of governance and organization.
This article introduces the meaning of a Decentralized Autonomous Organization, the requirements to create a DAO, the Use case of DAO, the basic characteristics, and the limitations facing DAO.
DAO is an acronym that stands for Decentralized Autonomous Organization. Blockchain technology through the use of smart contracts enables the creation of organizations that enjoys autonomy from any central body or authority but relies on lines of computer codes for regulation. The implications is that a DAO can function autonomously, without the need for any central regulating body. The regulations and transaction records of a DAO are stored openly on the blockchain. Rules are generally decided on by stakeholders’ votes.
Popular examples of successful DAOs includes; Aava(a DeFi lending platform), Uniswap( One of the largest decentralized exchange), and MakerDAO( an organization that manages the crypto-collateralized DAI). And there are so many other great projects out there!
Every DAO project considers the following;
DAO is a useful way to organize a community of people with the same interest. DAO Project may be deployed for different use cases, such as token governance, decentralized venture funds, social media platforms, crowdfunding, Dapps, NFTs community, investment platform, project funding, etc. And it is ideal for a community of people that wants to remain anonymous. The Blockchain allows people to organize themselves efficiently with just computer codes. There is no central authority or any superior, rather community members vote on issues depending on their voting power( number of governance tokens).
Characteristics of a DAO
Decentralized Autonomously organizations running on a Blockchain may enjoy the following features;
The Immutability and Trustlessness nature of DAO still pose some security setbacks. Decentralized autonomous organizations built on a Blockchain are faced with a combination of social and technical issues. Technically, the security of a DAO network is constantly challenged by coordinated attacks and hacks.
Critics are still against the decentralization of a DAO. They argue that Achieving decentralization when the governance rule gives some participants more voting power than others is questionable. Some group of investors can accumulate major shares of DAO tokens. As a result, they would gain higher voting power in the organization.
Also, there is a lot of uncertainty surrounding the legality of DAO. DAO could turn out to be a regulatory problem, due to the lack of any definite regulations for taxation and management. And this uncertainty could be a significant barrier to the mainstream adoption of DAOs.
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Why You Must Pay Attention To Decentralized Autonomous Organization(DAO) was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.