Decentralisation is one of the most important characteristics of digital currencies. This implies they are distributed over a multitude of computers, networks, and nodes rather than being controlled by a single organisation like a government or central bank. Virtual currencies, in many circumstances, take advantage of their decentralised state to achieve levels of anonymity and security that are normally unattainable to traditional currencies and transactions.
In 2016, a group of developers were inspired by the decentralisation of cryptocurrencies and came up with the concept of a decentralised autonomous organisation, or DAO.
What are DAOs?
A decentralised autonomous organisation (DAO) is a blockchain-based programme that provides users with a built-in paradigm for collaborative code management.
Traditional companies with boards, committees and executives are not DAOs. DAOs are governed by a set of rules defined in code and enforced by a network of computers running shared software, rather than by a small number of people. Users must first join a DAO by purchasing its cryptocurrency in order to become a member. Having the asset offers users the ability to vote on proposals and modifications proportionally to the amount they own.
BitShares, a virtual e-commerce network that connected merchants and customers without a central authority, was the first successful DAO. Bitshares was dubbed as a decentralised autonomous corporation (DAC) at the time, a term invented by the company’s founder, Dan Larimer.
How do DAOs work?
DAOs are designed to resemble a company structure in which rules and regulations are created with open-source code and enforced with smart contracts. DAOs, unlike traditional companies, do not have a hierarchy. DAOs, on the other hand, reward a dispersed network of users to achieve their purpose in order to match the organisation’s interests with those of its members.
Internal capital is one of the most important elements of a DAO because it is utilised to incentivise these users and keep the organisation running properly. DAOs typically enter a fundraising phase after the initial set of rules has been developed and encoded into smart contracts, which anyone interested in participating in can do.
The DAO is considered live and functioning at the completion of the funding process, and all critical decisions about the organisation are made by users achieving an agreement on ideas. Users get the capacity to vote on proposals by owning and locking cryptocurrencies into a voting contract, with the voting weight proportional to the amount of cryptocurrency locked. The request is then implemented based on the predetermined network consensus rules, and participants are rewarded with additional crypto.
DAOs have a more democratic structure than regular corporations. Any modifications to a DAO must be voted on by all members, rather than being enacted by a single party (depending on the company’s structure). The majority of DAO funding comes from token-based crowdsourcing. DAOs are governed by the community, whereas traditional firms are governed by executives, Boards of Directors, activist investors, and so forth. Traditional companies’ operations are private, with only the organisation knowing what is going on, and they are not always global, but DAOs’ operations are totally transparent and global.
GameStar is releasing a fully functional DAO soon, with the details and guidelines coming out by the end of 2021. The GameStar management team plans to eventually give up their rights to manage the platform over time and transfer all legal titles and ownership to the DAO and its community for decision making.
Another important point to note is that GameStar Exchange doesn’t operate in the USA or OFAC countries which means that governmental or federal laws won’t interfere with the workings of the organisation and believes that these policies set by the platform are to continue indefinitely.
With a goal to empower individuals and to provide them with a safe and fun place to exchange value, the DAO will be based on GameStar’s ownership and participation in the community.
Building out this ecosystem will be a top priority with the possibility of reinvesting in the market being significant. At the end of the day, GameStar wishes to empower individuals to make their own economic decisions and be in complete control over their funds and portfolios while interacting with a safe and efficient system.