The notion of a decentralized autonomous organization (DAO) has gained traction lately in the wake of the headlines surrounding ConstitutionDAO, a group that attempted to buy an original copy of the United States Constitution.
The group of over 17,000 contributors donated nearly $47 million in Ether (ETH) for this goal, but they were defeated by a bid of $43.2 million at the Sotheby’s auction. Although the auction did not proceed as planned, the topic of DAOs remained on the table.
DAOs are forming in a variety of industries.
A decentralized autonomous organization is a collection of individuals who utilize different technologies on the internet to make governance choices. DAOs are seen as a speedier means to set up networks for many reasons, all of which are tied to cryptocurrencies in some manner. Furthermore, the DAO model was extended to media enterprises.
Dirt, a DAO founded by journalists Daisy Alioto and Kyle Chayka, and Uniswap DAO for users and other DAOs like as FWB and PleasrDAO, are among the most important well-known DAOs to emerge lately.
People who manage DAO initiatives are hoping that this new notion will attract more cryptocurrency consumers. That’s something Li Jin, an FWB DAO investor, told The New York Times, suggesting that DAOs provide a way for individuals to enter crypto.
Dealing With DAOs Has Legal Consequences
However, when new fronts emerge in the cryptocurrency space, authorities may get interested in these new ideas since DAOs deal with cryptos eventually transformed into fiat in highly regulated nations. Nonetheless, some companies create their tokens.
Still, regulators like the Securities and Exchange Commission (SEC) in the United States are attacking businesses like Ripple, accusing XRP tokens of being “securities” rather than assets.
Shannon Li, the creator of WECrypto DAO, argues that certain DAO tokens should be regulated as securities, even though legality and lawyer expenses remain important problems in the nascent decentralized autonomous organizations.