Decentralized Autonomous Organizations are communities that employ blockchain technology for specific functions – usually to raise funds for an initiative or to engage in smart contract services. More than half of the virtual tokens in the cryptocurrency world today are due to a DAO funding attempt or two. To a well-rounded understanding, the section below examines the meaning and purposes of DAOs.
What are Decentralized Autonomous Organizations
The meaning of DAOs is apparent in the term itself. Decentralized Autonomous Organizations are organizations whose operations are not controlled by a central authority. These organizations make decisions without interference and control by a central authority or outsiders not within the organization. To make decisions, the members of DAOs undertake a voting system of democratic selection. These organizations can range from investment groups to charitable foundations. For the functionality of the voting system in DAOs, members are issued a customized token of the organization, enabling them to participate in the decision-making within the organizations.Â
DAOs often run virtually and are self-executory in that they possess programs specially geared to automate the execution of an agreement in the form of a smart contract. Obviously, the possibility of that is courtesy of blockchain technology.Â
DAOs have ventured into raising funds to achieve a specific goal of the organization or for a project. These funds can be raised by issuing ownership and voting tokens to members who buy such tokens for a price, and there are also periodic community fundraising initiatives for specific projects.
Fundraising Projects by DAOs
Ukraine DAO
The Ukraine DAO fundraising project was specifically initiated to raise funds for those who may have been affected by the Russia-Ukraine conflict. The DAO single-handedly raised $6 million with an auction of a Ukraine flag NFT, and the proceeds were given to charitable organizations that sought to provide some relief to those affected by the war.
Pleasr DAO
Pleasr DAO is a project on cultural NFTs. This decentralized organization collects culturally significant NFTs and auctions within the community. Their mission is to buy and fund culturally significant pieces of NFTs, which means that they team up with some crypto investors to buy such types of art, after which ownership is distributed among the community members.
FWC DAO
The FWC DAO is an organization created to support filmmakers, particularly a group of filmmakers called Flickto Collective. The organization is to raise funds to support the group’s film productions, after which profit is to be shared collectively by all members of the community.
Conclusion
These funds can be used for charitable projects, as seen above, or to fund the accounts of the DAO and its activities. It is also a great way to build community engagement and bonding.
