With the development of blockchain for more than ten years, the extended technology and application innovation have brought earth-shaking changes to the traditional technology system. The new encryption technology authentication and decentralization mechanism has brought solutions to the historical problems for all industries.After ten years of research and development, the block chain technology utilizes four innovative technologies, distributed ledger, asymmetric encryption algorithm, intelligent contract and consensus mechanism to combine with various fields to create new application patterns, such as the current fire IEO, ICO, DeFi, etc.
In addition to the above technical highlights, DAO is also one of the most anticipated applications of blockchain technology.After all, this is the first time in history that we have the ability to coordinate and collectively make decisions about something in a faithless and anonymous way.This decentralized model of community governance has a profound impact on the promotion of national governance, corporate governance and even the communication and coordination of the entire human community.
Next, let me add MOSDAO, the world's first token DAO publishing platform, on the basis of the articles on DAO popularization written by Vu Gaba Vineb, the technical development leader of Digix. There are 10 well-known daos in total, to give you the development of DAO popularization.In this article, I'll try to analyze well-known daos that exist or will be rolled out in the near future.When discussing daos, I will classify them according to three main attributes:
1. The nature of the decision
2. Incentives for participation
3. Degree of decentralization
I will also discuss my views on DAO and my concerns about existing mechanisms.
Before I formally write this article, I need to explain my definition of DAO: In my opinion, DAO is a way for people to make collective decisions on an issue by organizations that operate in coordination with each other through trustless protocols.
(1) Bitcoin-Original DAO
In my opinion, Bitcoin is the first DAO ever. In essence, it is an organization operated by miners and complete nodes. They coordinate with each other through the Bitcoin protocol to make collective decisions on which transactions are included in the main chain of the Bitcoin blockchain and these transaction orders. The principle of this organization is simple: protect the Bitcoin network and facilitate transactions on its chain.
The decision of "Bitcoin DAO" is to carry out on the block and transaction of the blockchain itself at a relatively low level of the blockchain infrastructure. Then we can say that most other blockchains, such as Ethereum or Zcash, are also basically DAOs. However, in this article, I will mainly discuss DAOs that exist on the blockchain, which have more discussion value. I call these projects "meaningful DAO". These "meaningful DAOs" inherit the decentralized and trustless properties of their underlying blockchain protocols, and build additional logic on top to provide more "meaningful" technical implementations.
The motivation for participating in the "Bitcoin DAO" is mainly mining rewards. If the miner acts normally and diligently produces a valid block, it will receive a contribution reward for participation and contribute to "Bitcoin DAO". In my opinion, the motivation for participating in DAO is the key to its success. Rationally speaking, participants will only actively contribute to the DAO if they are fully motivated. Bitcoin has proven the way to enable participants to continue to contribute to the community. It is worth noting that the motivation to contribute to "Bitcoin DAO" is immediate, without delay, and instant gratification.
Bitcoin has a high level of decentralization. The protocol itself is completely decentralized, and it can run as long as there are participants in the network. However, in practice, we cannot say that it is completely decentralized. At the time of writing, the top 4 mining pools have more than 50% of the hash power, which means that they can collude and perform 51% attacks to block specific transactions or double spend attacks, and new upgrades to the Bitcoin protocol are also focused Minority hands.
It may already be obvious to some people, but it is difficult to achieve 100% decentralization in practice. Even if the ability to create blocks is highly decentralized in some way, or protocol upgrades are done through a highly decentralized voting mechanism, security holes in major clients / operating systems, etc., can still seriously damage the network. As with everything else, reality will never be as perfect as theory, because assumptions do not hold. Taking a step back, should we fight for full decentralization? This is another issue that I will discuss in detail in a later section.
In any case, Bitcoin remains one of the greatest inventions of mankind. Since the days when we all live in tribal families based on family trust, humans have come up with many concepts and built many complex systems to try to coordinate among ourselves. However, Bitcoin has created a whole new way of coordination, with rules written and executed by immutable logic. Bitcoin is the mother of all DAOs.
(2) DashDAO-the first "meaningful" DAO
DASH was originally a fork of Bitcoin and introduced additional DAO elements on top of the core blockchain protocol in August 2015: 10% of block rewards went into the pool to fund the development of the Dash network / ecosystem.
In DashDAO, anyone can pay 5 Dash to create a proposal for selection. Dash Masternodes (need to lock at least 1000 Dash as collateral) vote to decide which proposals can be funded.
The decision made at DashDAO is about how Dash circulates in real life and ultimately promotes Dash adoption.
The motivation for Dash Masternodes to participate in DashDAO voting is the long-term appreciation of the value of the Dash they hold because they vote for valid proposals and block bad ones, thus saving money for better proposals.
DashDAO has a high level of decentralization. Anyone can join or leave the community as Dash Masternodes, as long as they get a vote from Dash Masternodes, anyone's proposal is likely to pass.
As the first DAO to make a clear decision on the blockchain consensus layer, DashDAO is one of the most active and successful DAOs. To date, DashDAO has passed hundreds of proposals, from funding development work to marketing and community awareness work. At the time of writing, 31 valid proposals voted in favor of the next funding release of 5735.52 Dash in May 2019. With the support of DashDAO, Dash has built a great ecosystem, has an active community in multiple countries, and supports multiple types of services such as VPN, mobile recharge, and even buying fried chicken!
(3) The DAO-the most failed DAO
The DAO is by far one of the most exciting projects in the blockchain. It began to try to create a new decentralized business model in May 2016. The DAO-its token holders jointly run smart contracts to contribute to their token sales. Token holders voted for proposals that should have rewarded The DAO. The DAO project raised 1.27 million Ethereum funds during the ICO, which was almost 14% of the ether supply at the time.
The decision made in The DAO is similar to DashDAO: how to allocate a pool of funds for real-life proposals and ultimately return to The DAO.
The motivation of The DAO participants to participate in their voting is the return of the project's success and the rise in the price of tokens in the secondary market to achieve value enhancement. It is undeniable that there are some problems with The DAO's incentive structure. First, there is no guarantee that projects funded by the DAO will eventually reward token holders. Second, funded projects need to sell Ethereum in cash, which will temporarily reduce the value of Ethers. The second issue is shared with any The DAO, in which DAOs are funded for tokens that support the economic interests of The DAO participants. There are other problems with The DAO's structure, but this is beyond the scope of this article.
The DAO is quite scattered. There is a curator who checks the identity of the person who submitted the proposal and ensures that the proposal is legal before the address is whitelisted. This process, and how to choose the initial curator, is not completely decentralized at this point. However, one can vote as a curator, and anyone who is dissatisfied with the way the DAO works can be separated from The DAO while retaining their share of funds and rewards.
All in all, The DAO is an interesting and novel concept, no matter how it ends, it should be a cool experiment. Unfortunately, instead of letting us see more of its glory, it ended in a rather early and ruthless way. A flaw in DAO's code caused the most famous hack in history, which directly caused the Ethereum fork.
(4) MakerDAO-Administrative DAO
MakerDAO was launched on the Ethereum mainnet on December 17, 2017, and was created as a DAO to manage the operation of its stablecoin DAI, whose value is anchored to the US dollar. Dais are generated by locking some Ethereum (or other assets) into a mortgage debt position (CDP). In short, the stability of DAI is maintained by many feedback mechanisms and implemented as a smart contract system on the blockchain.
The decision made in MakerDAO is basically to adjust the configuration of the entire system and trigger an emergency shutdown state if necessary. The configuration to be decided includes the parameters of the CDP type, the CDP type to be added, and the Oracles collection of the price feed of the mortgage type. The emergency shutdown mentioned above is a global solution for the entire system, which is triggered when there is a Black Swan incident that threatens the normal operation of the entire system.
MakerDAO participation is the holder of MKR tokens. The main motivation for participating in its governance process is the appreciation of the value of MKR tokens when the DAI stablecoin system runs well and grows over time. In the Dai stablecoin system, the creators of CDP will have to pay the stability fees in MKR (or multilateral mortgage DAI to maintain the DAI savings rate), and these mortgage tokens will be burned, which indirectly increases the value of MKR. It is undeniable that this incentive mechanism is more like a long-term process, it is not like the instant gratification of Bitcoin. In addition, there is a hitchhiking problem, lazy MKR token holders can still enjoy all the benefits of the appreciation of MKR value without spending any time or energy in the governance process. This problem is also very common in most DAOs.
On the other hand, there is a case where it is not necessary to motivate so many votes. After all, voters with a small amount of right to know may be better than voters with more tokens but less knowledge.
MakerDAO is quite decentralized. In theory, all decisions in MakerDAO are done purely through MKR voting. However, the distribution of MKR is not the most dispersed. Moreover, it is difficult to configure such a complex system through decentralized decision making. Many configuration changes, such as stabilization fee adjustments, need to be studied and proposed by the Maker Foundation. If everyone was free to choose all configuration values and the result would be a weighted average, that might be crazy.
This leads us to a point put forward by Vitalik, which includes that completely decentralized, tightly coupled chain governance is overrated. Through our culture, the current human coordination mechanism has been developed for hundreds of thousands of years. In contrast, the new method of decentralized personnel coordination through blockchain technology and DAO is not even new. Although DAO and decentralized voting are exciting breakthroughs, I think it may be too early to rely on them 100%. This combination of inputs from chain voting, informal offline consensus, and core development teams may be more ideal, at least for now.
(5) DigixDAO-Gold DAO
The purpose of DigixDAO is to promote the adoption of DGX. Digix Gold Token is supported by 99.99% gold 1: 1. DigixDAO currently raises 395,000 Ethereum to fund projects in the DGX ecosystem.
The decision made in DigixDAO is similar to DashDAO: how to allocate a pool of funds for real-world projects to promote DGX adoption.
The motivation for participating in DigixDAO is slightly different from other DAOs: DigixDAO participants holding DGD tokens receive a reward every quarter from the fees of DGX transactions. These rewards depend not only on how much DGD you have, but also how actively you contribute to DigixDAO by voting or executing a project. As a result, participants are relatively more directly motivated and satisfied, and can suppress less active participants.
DigixDAO is definitely not one of the most decentralized DAOs. Proposers must be verified by Know-Your-Customer (KYC) from the Digix team. For policy, regulatory or legal reasons, the Digix team can also stop funding for certain projects. It can be said that by operating blockchain gold products, Digix and DigixDAO need more central decision-making processes in the real world.
(6) MolochDAO-Incentive Balance DAO
MolochDAO was launched in February 2019 to address common Moloch issues. This is what happens when individual incentives are at odds with global best results. A direct example of what MolochDAO aims to address is the current Eth 2.0 development state: although some people have spent a great deal of money and effort to contribute to Eth 2.0, the benefits of their work are disproportionately Shared with all other projects, and they don't have to devote all their time to contributing to infrastructure development. The effort is not proportional to the harvest will consume the enthusiasm of developers.
In MolochDAO, new members need to bring ethereum into the capital pool to join and receive a corresponding number of shares. These bets are used to vote on proposals that further advance MolochDAO's cause and should increase its value.
There are two types of decisions in MolochDAO: first, who can enter the guild. This is to better align the interests of new entrants with those of the guild. Second, how to allocate the new money (essentially diluting the pool) to proposals that should increase the value of the whole guild.
MolochDAO members can liquidate their funds at any time to obtain a corresponding amount of funds from the guild. Therefore, participants can increase the value of the union by providing good proposals, or increase the number of shares they own in the company by executing the proposals themselves. For example, a proposal to require 1 per cent of the guild's value to be spent on upgrading core infrastructure, which is thought to increase the value of Ethernet by more than 1 per cent, should always be funded. Admittedly, people outside of MolochDAO can still use these infrastructure upgrades for free. One neat thing, however: for the big ethereum owners, he might do better to contribute their idle ethereum to MolochDAO and help fund system upgrades, which could significantly increase the value of his net ethereum blockchain. If you want your Ethernet storage value to grow, instead of complaining about the direction and speed of blockchain development, it's best to do it yourself. It will be interesting to see how MolochDAO behaves in practice.
MolochDAO is not overly decentralized in the way it boots the first member, and restricts access to new members. Initially, the upgrade plan was to replace the old DAO by exiting it and redeploying the new contract. As described in the MolochDAO white paper, these de-linking and centralization mechanisms are features, not defects.
(7) DAO stack and holographic consensus
This section introduces DAO Stack, the framework to create DAO, and the concept of holographic consensus introduced by DAO Stack.
The first DAO built using DAO Stack will include the Genesis DAO created by DAO Stack itself;
DxDAO, PolkaDAO created by Gnosis, funds Polkadot's community projects. At startup, all of these daos are accessible through Alchemy, the UI framework for daos that use DAO Stack.
For the sake of discussion, let's talk about SampleDAO created using DAO Stack. There will be two main tags in SampleDAO's work: untransferable reputation and predictor tags. The reputation will be used to vote for the proposal in SampleDAO. You can suggest upgrading the logic of SampleDAO itself to make it a self-evolving DAO.
Now comes the problem DaoStack's holographic consensus is trying to solve: as SampleDAO grows into a large DAO, there are many proposals to track. The DAO's focus should be on the more recommended proposals, not the garbage proposals. To summarize DAO Stack's holographic consensus: if they think A might pass, people can put certain Predictor Tokens into A project a. if A gets enough Predictor Tokens, it will be promoted to A pool where more people will watch it and adjust the required voter turnout. If A does pass, the person who puts the token into A will receive some rewards in terms of tokens and grades. So there is a prediction market that will motivate people to filter out better proposals.
This seems to be a clever way to solve the problem of scalability and elasticity. In addition, DAO Stack envisions that different daos using its framework will use the same Predictor Tokens GEN created by DAO Stack itself. This creates a network of "predictors" around different daos and helps filter out better proposals.
After reading about DAO Stack, my first concern is this: A person bidding for A bet X will only vote for A, whether A is eligible for bidding or not, because X wants to get the right prediction reward.
The second question is: what incentives can reputation holders take to vote for promoted projects? Without enough incentive, the only active voters may become Stakers themselves, thanks to the first question. I'll talk more about this in DxDAO.
A third problem is that, since "correct prediction" is defined only by voting results, forecasters may be more concerned with the public opinion of the proposal than with the actual quality of the proposal. It might be something like: "oh, I know proposition B is a terrible proposal, but I also think it's popular, so I'll never pay the price because I've already voted for it."
I know that these concerns have not been addressed. It is not impossible but it is still difficult to have a sound mechanism.
(8) DxDAO - anarchist DAO
DxDAO, which will be launched in April 2019, is a fully decentralized DAO created by Gnosis using DAO Stack. Gnosis exits and does not retain any controlled or pre-set assets in the DxDAO after deployment.
The primary purpose of DxDAO is to manage the parameters of the DutchX protocol. DutchX is a novel and completely decentralized transaction protocol using Dutch auction principles. By trading on DutchX, you gain the prestige of DxDAO. Reputation is basically a bet to vote in DxDAO. You can gain prestige by locking Ethernet or other ERC20 tokens traded on DutchX.
While managing the DutchX protocol was the original purpose of DxDAO, DxDAO could evolve into any possibility in the ethereum blockchain because its participants could vote to upgrade the logic of DxDAO itself.
The motivation for participating in DxDAO is to gain more prestige. However, I have not found a good link between the success of the DutchX protocol and the reputational value of DxDAO. This is basically my second question about DAO Stack. Indeed, predictors do a good job of motivating people to use GEN and filtering out proposals. But if there is little correlation between the reputation value in voter accounts and the success of the DutchX deal, the only people who are motivated to vote may be the forecasters themselves, who will only vote for their proposal.
As for the degree of decentralization, DxDAO is clearly highly decentralized across the spectrum. Anyone can participate, no one has special rights.
DutchX will become one of the most important daos using the DAO Stack framework, with a holographic consensus mechanism. This is a new concept, and it will be interesting to see how this "anarchist DAO" becomes. As Gnosis says:
"DxDAO will develop independently of Gnosis and live or die on its own" - Gnosis
(9) Polkadot - meta-protocol DAO
Like bitcoin, most blockchains are already daos that make decisions about blocks and transaction levels. However, the blockchain protocol remains largely unchanged. If the protocol is to be changed, it will be through offline and traditional human coordination methods (e.g., through opinion leader debates and community support).
Polkadot takes the protocol upgrade mechanism to another level by moving it across the chain. This means that Polkadot stakeholders can vote hard forks in a chain of votes, which can smoothly evolve Polkadot into anything through protocol upgrades. Therefore, Polkadot can be said to be a meta-protocol, a protocol to change its own protocol.
Polkadot's decisions are taken in a referendum and can be submitted publicly or by the "council". The committee consists of a number of seats that have been increased or decreased through the electoral process. The council may propose referendums and prevent malicious or dangerous referendums. Ultimately, the referendum must pass a share-based vote before its proposed changes can be implemented.
The motivation for stakeholders to participate in the Polkadot DAO, or Polkadot governance process, is that they are rewarded with Dot tokens for the success of the Polkadot network.
Polkadot apparently has a high degree of devolution, and even hard bifurcations are decided by votes. Admittedly, the original council's selection may not be fully decentralized, a requirement that many may agree on. Yet, at least in theory, the rotation mechanism for council seats should become more decentralised over time.
Polkadot will become one of the most famous blockchains implementing the chain governance of protocol upgrades. It will be interesting to see how far Polkadot goes. As Gavin says, he would like to see Polkadot develop itself into an entity, a powerful concept that could change the way society and humanity coordinate in the future.
(10) MOSDAO -- the world's first token currency issue DAO
MOSDAO is the first token DAO issuing platform in the world. Compared with the traditional centralized token issuing platform, behind the platform operation of MOSDAO is not a centralized institution or company, but a decentralized community, a DAO.
The launch of MOSDAO is mainly aimed at solving the problems of opaque operation of the current centralized token issuing platform, incomplete information disclosure, fraud caused by the lack of voice of community members, and the cluster of air COINS, helping the project party issue tokens in the form of DAO to raise funds, and providing investors with high-quality investment opportunities of cryptographic assets. Initially, MOSDAO ran on the smart contract of the ethereum chain. After the MOS public link is online, it will run on the MOS public link intelligent contract.
MOSDAO designed a new organizational structure including roles of community members, jury, community leaders, development teams, etc. These roles are interconnected and motivated by distributed rules, avoiding the lack of traditional DAO architecture The disadvantages of automatic execution mechanism, lack of effective incentives, and the community dominated by some people have laid a solid foundation for the operation of various distributed financial applications, thus forming a new DAO 2.0.
Community members will also receive tokens for participation. For example, I participated in the DAO issue of MOS token and got MOS token reward. Through the DAO to raise process becomes transparent, make project disclosure information complete, true, through the intelligent distribution incentive contract, let the distribution of reward becomes transparent, through the DAO will be tokens distribution completely below to the community, the circulation of the token is determined by the community to buy how many consensus, tokens, price is determined by the community is willing to buy the price agreement. By issuing and raising money through token DAO, the price consensus formed by token is decentralized, reliable, long-term and free, rather than centralized, speculative, short-term and locked-in. The first and second markets are linked to each other immediately after the issuance, which has a certain restraining effect on the collapse of tokens in the second market due to excessive speculation, information shortage and incomplete consensus.
MOSDAO is a completely decentralized DAO. Anyone can participate, no one has special rights. In DAO 2.0 architecture for the jury selection process, adopted based on type VRF (variable refrigerant flowrate) (Verifiable Random Function, can verify the Random Function) Random mechanism, which issues in every decision, project, submit the voting process, add some Random factors, avoid too dependent on specific members, and stakeholders to known members of the possibility of bribery, truly realize the "decentralization".
With the introduction of MOSDAO, MolochDAO, DigixDAO, GenesisDAO, DxDAO, WBTC DAO and PolkaDAO, 2019 can be said to be the year of DAO. It's nice to see the diversity of concepts among these new members of the DAO world. In practice, some of these concepts may succeed and some may fail. In any case, witnessing early experiments with a new way of human coordination through the DAO will be an exciting and interesting journey. As you know, we may see the direction of human organization in the future.