What is DAO (Decentralized Autonomous Organization), and How Does It Work?

what is dao

What Is DAO – Decentralized Autonomous Organization?

A Decentralized autonomous organization is commonly referred to as DAO in crypto.

It is primarily seen in the cryptocurrency market and blockchain technology. This organization is in the process of becoming a legal system. 

It has no central governing body; it is quite the opposite; here, all the members of DAO share a common goal for the entity and act their best to achieve it. 

The system follows a bottom-up approach to decision-making.

How Does DAO Work?

  1. DAO is made up of intelligent contracts. These agreements are logically coded, which dictates decision-making based on the activity on a blockchain. 
  2. On the blockchain, the voting process is publicized. Voting power is distributed according to the number of tokens one holds. 
  3. The idea behind this norm is that users with more money invested in the DAO are more likely to make wiser decisions than the lesser ones.
  4. Finally, all the members of DAO vote for the best usage of the funds. 
How DAO works

List Of DAOs

There are four major categories DAOs can be classified into these are-

  1. Protocol – Tokens act as voting values to decide modifications in the technological protocol. 
  2. Collector- Groups of art collectors add their funds to achieve ownership of NFT.
  3. Investment – These are invested funds from experienced investors to generate profit or influence decisions in the company.
  4. Grant DAOs- This grant generates and distributes funds to creative projects that aid the Decentralized community.

Benefits of DAOs

Benefits of DAO

The followings are reasons for an entity to opt for a DAO structure-

Decentralization- Any decisions that will impact the organization are made by a group of individuals. This is the opposite of depending on a single person for actions. DAO Decentralized authority across a large number of users.

Accountability- Providing equal opportunity to every individual creates a sense of responsibility for the individual to make an impact on all matters. It encourages token holders to utilize their tokens in the best possible way for the entity.

Transparency – The votes are done via blockchain while maintaining transparency in DAO. This will encourage people to take action that will keep up their reputation.

Diversity – The principle of DAO is to motivate people from all backgrounds to join and envision the same goal. Their only connection is the internet, but they can easily communicate and create an impact on the entity.

How To Create DAO

Step 1- Create a Server

  • To create a Decentralized autonomous organization, the first step is to make an account. For example, sign up with Moralis and create a personal server.
  • This will further lead to three alternatives. For the time being, let’s choose the Testnet server. Then, in the window that appeared, fill in the basic information like name and address. Finally, select the preferred chain. At the bottom right of the window, click the “Add Instance” option. Wait for a couple of minutes till the server loads.
  • Now that the server is ready, one can begin exploring and gathering more information about the server. Also, it restricts users from voting twice in the same poll in the future, as their previous data will be saved in the dashboard. 

Step 2- Create a Clone

  • The next step is to clone the Moralis poll. It will help in creating the Decentralized application or d-app efficiently. To accomplish this step, visit the GitHub repository.
  • Then copy the URL for the “git” repository. This will be used to clone the project to the local directory. With this link, the holder can navigate their integrated development environment. You can use any code editor you are familiar with. Now, clone the project by ordering the following command “REPO LINK.” 
  • After that, to ensure the installation of all dependencies for the project, input the following command- npm i

So far, the following goals have been accomplished-

  1. A clone is added to the local development environment of the holder
  2. All dependencies are installed

Subsequently, link the Decentralized application or project to the previously created Moralis server.

Step 3- Initiate The Application

  • The foundation for initializing Moralis is laid out now that both server and project are accessible. Now, locate the file “.env.example” in the repository. 
  • After opening the file, the application ID and server URL are required. This you can find on the Moralis admin panel. 
  • Now, the final step is to initiate the application by the commanding-npm start

What Is the Purpose of a DAO?

DAO’s motive is to improve the structure of the traditional management of the companies. 

Instead of one person making all the decisions or a small group of people guiding the direction of an entity, the DAO shares equal power with every individual. 

It provides an equal opportunity for everyone to suggest initiatives. The DAO seeks strict governance, which is dictated by code that runs on blockchain.

Star Apple- A Decentralized Autonomous Organization helping in a seamless M&A process

Star Apple Labs Limited is a DAO (decentralized autonomous organization) that helps companies conduct easy merger and acquisition processes with Blockchain technology. 

With the disruptive power of Blockchain technology, we solve the problems of M&A deals such as information symmetry, transaction accessibility, and inefficiency. 

To know more about our company, feel free to check out our social media channels:

Facebook- https://www.facebook.com/StarappleMnA-110428775065535

Instagram- https://www.instagram.com/starapple.mna/

Twitter- https://twitter.com/StarappleM

LinkedIn- https://www.linkedin.com/company/star-apple-labs-limited/

Telegram- https://t.me/Starapple_MNA

Medium- https://medium.com/@starapple.mna

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