Editor’s note: It looks like The DAO is no longer with us. However, the future development of decentralized communities may again lead to a creation of new blockchain-based DAOs. In the article below the author shows the existing mechanisms for decentralized management in yet another popular blockchain-project called Dash.The DAO is known to nearly everyone: the project has cracked a record in terms of raised funds by raising 150 million dollars.The decentralized autonomous organization implies such a form of organization when multiple investor shareholders who own the project’s tokens acting as shares control it. The DAO was created on Ethereum, the most popular infrastructure for smart contracts, which are self-executing contracts where some programmed conditions, once fulfilled, result in real-life consequences. Thus, according to the authors, the raised funds are invested.We all know what happened later: The DAO’s code error, theft of millions of dollars, changes in the code that undermine the basic principle of ‘the code is the law’, etc. The story isn’t over yet, but we know for sure that the basic principles of The DAO have been violated by its own creators, who acted as benevolent dictators.The fuss around the project attracted new users, who earlier possibly didn’t know a thing about cryptocurrencies and decentralized systems. Most of them possibly have no idea that projects working on DAO principles have existed for a while. On the one hand, it demonstrates successfulness of DAO’s concept. On the other hand, it shows how vulnerable and manipulation-prone each of DAO’s is, especially at the dawn of its existence.But there is at least one project actively using DAO principles in its work: it’s Dash.
45% TO THE MINERS
Dash, created by Evan Duffield in 2014 under the name of Darkcoin, has rapidly grown from just a platform for anonymous transactions into a full-fledged payments network incorporating lots of services, self-funding, and blockchain-based decentralized governance.Thanks to decentralized governance by blockchain, anyone may propose changes to make Dash better. Owners of masternodes, i.e. full nodes of Dash’s decentralized network with specific functions and rewards, vote on such proposals on a regular basis. Those proposals may vary from marketing issues to direct changes of Dash protocol.The very mechanism of proposing and voting is very straightforward, so important decisions may be made right away. For instance, the decision on increasing Dash’s block size from 1 to 2 MB was made in 24 hours, in contrast with endless debates on the same matter in bitcoin.Dash is funded by 10% of mining reward. While in Bitcoin miners have the entire 100% of mining reward, in Dash it’s only 45%. Other 45% are distributed among masternodes, while the rest goes to fund the project’s development initiatives (nearly $60k a month).Theoretically, Dash could invest in manufacturing bicycles or making video games, if masternode owners would like to do so. As opening a masternode requires 1,000 Dash, no wonder masternode owners are primarily interested in enhancing Dash’s attractiveness as a cryptocurrency.This funding method reinforces the entire system by creating positive feedback with the market cap. The spent money returns to the system in the form of improvements of both currency and its corresponding ecosystem. As opposed to the DAO, Dash finances all its projects with its own money, i.e. by money produced my miners and controlled by masternodes.
DASH EVOLUTION
The process of self-financing and self-governance is enhancing over time. The participants’ professionalism and confidence of investors increase as projects get successfully implemented. Thus, Dash 2.0 is soon to be launched under the name of Dash Evolution (version 12.1).The update will make the system more efficient by adding eligible project managers to the system’s architecture. They will focus on particular areas like marketing, jurisprudence, technology, and so on. They will be entitled to hire ’employees’ so that the projects with positive voting history could be implemented. They will have to report to the community, which may take measures against them in case their actions contradict the network’s interests, or they inappropriately spend the budget.Additionally, masternode owners won’t be as actively engaged in projects aside from voting, which would enable them to increase resource efficiency. Thus, decentralized management will use the world’s best practices in commercial enterprise management.Duffield says that once version 12.1 is released, the developers will dedicate their time to create gateways for fiat currencies, which he described as more liquid and high-quality services for exchanging fiat for Dash. Dash is already integrated with Deginner, Coinapult, and Crypto Capital. Duffield believes those gateways would enable Dash to enter its next development phase.The emergence of ‘real world’ projects may prove Dash’s resiliency as a decentralized autonomous organization.
MASTERNODES AT A GLANCE
Masternodes not only take their part in the governance but also have functions crucial for the entire system. First, they anonymize Dash coins, making them totally similar regardless of their history (the function is called PrivateSend), thus increasing resemblance between Dash and cash. Second, masternodes support instant transactions (so-called InstantSend). This makes Dash a viable solution for retail purchases when there’s no time to wait until a transaction has been confirmed. Masternodes get their reward for that job to the extent of 45% from each generated block.No wonder such scheme for passive income generation attracts lots of investors. Each masternode generates nearly 10.7% of annual revenue. Detailed statistics in this regard are available here.Notably, each masternode is a full node containing the entire blockchain with all transactions dating back to the first one. This, apart from other things, maintains the network’s reliability and stability. Thanks to the masternode rewarding scheme, their total number is outranked only by that of bitcoin with 5,750 full nodes. In Dash, there are currently more than 3,900 master nodes. If we use masternode quantity to currency market cap ratio, Dash is the first. Dash’s value is maintained by full nodes way better than in any other cryptocurrency.With a market cap of $45 million, Dash is currently the world’s sixth cryptocurrency.As a conclusion, I would like to wish all the luck to all DAO’s. Learning from pre-existing successful DAO’s could enhance those yet to come
THere was popular support for the hard fork,so there was no dictatorship. And laws change,thankfully,so code as law also will change,when it is glitchy.
But I support your main point,lets support more DAOs.