In the past few years, blockchain technology has evolved significantly. Blockchain technology has revolutionized several industries, including the financial and creative industries. In addition to GameFi, DeFi, and NFTs becoming more mainstream, other blockchain technologies are increasing in popularity, including Decentralized Autonomous Organizations (DAOs).
Overview of DAO
Decentralized Autonomous Organizations are community-led groups governed by tokens or network-based tokens that grant the holders voting-rights. Decentralized Autonomous Organization uses smart contracts that allow them to execute a command automatically if certain conditions are met. The impact of DAO or decentralized autonomous organization impact will ensure that decision-making processes will be fairer and more transparent. In a DAO, the rules reside on an open-source blockchain, so anyone can access it and look at the records of transactions. A DAO does not have a central authority; members vote on proposals shared with the project community.
DAOs, in a sense, operate similarly to corporations, except for the fact that they don’t have hierarchical structures and the fact that they strive to provide a new and democratic process through the use of decentralized governance. In addition, there is no formal contract binding the members of a DAO in any way, as opposed to those of a traditional organization. The two sides are instead bound together by several common goals or incentives outlined in their rules, which tie them together.
Overview of NFT
NFT is a unique cryptographic token that exists on a blockchain and is impossible to replicate the NFT. Blockchain records NFT ownership and the ability to transfer ownership among owners, allowing NFTs to be traded and sold among individuals. Anyone can create an NFT, requiring very little or no coding knowledge. An NFT is a file that contains references to digital files such as photos, videos, and audio files.
Several use cases can be derived from NFTs. Using them to represent physical assets, such as real estate and artwork in a digital form, has many benefits. In addition to the fact that NFTs are based on blockchain technology, they can also be used to remove intermediaries, connect artists with audiences or manage identity.
DAOs and NFTs: How are They Interconnected?
There is a close connection between NFTs and DAOs in the form of collector DAOs. The collector DAO is an organization that gathers funds to acquire and issue NFTs. In the case of NFT projects, especially those that are more popular, investing in them can sometimes be quite challenging.
It may require significant capital that other traders may not be able to afford, especially smaller players. In a collector DAO, a fragment of an NFT can be owned by multiple individuals simultaneously. NFTs can also be viewed as a form of DAOs, and the connection between them is not solely limited to collector DAOs. In addition to this, DAOs can also assist in the creation of NFT projects through community governance.
It is a valuable opportunity for community members and creators to collaborate on decisions and contribute ideas to the future direction of the NFT project in a collaborative way. In addition, DAOs can help smaller projects or creators create a dedicated community if they are well set up. It is important to note, however, that, unlike some celebrities and well-known artists who already have an established following, not every emerging creator will be able to build a dedicated following right from the start. Similar to crowdfunding platforms, collector DAOs can be used to raise funds for various NFT projects. They can help create engaged communities by allowing users to vote on the projects they feel are most likely to succeed.
Impact of NFT and DAO
Decentralized autonomous organizations (DAOs) exist to accomplish a common mission through community governance rather than through the control of a single authority. Many DAOs exist, including investor and protocol DAOs, philanthropy and service, and DeFi DAOs. There is no doubt that NFTs are one of the strongest pillars of Web3 and non fungible token impact will play an essential role in the development of all kinds of DAOs as they continue to play a crucial role in the realization of the vision of a decentralized future.
NFTs and DAOs for Collectors
It is not uncommon for NFTs from well-known collections to be extremely expensive. As a result, collector DAOs manage these exclusive NFT assets. In this capacity, they sometimes become involved in collecting art, monetizing it, supporting the blockchain art ecosystem, and offering exciting investment opportunities in the art field.
It is worth mentioning that the DAO has an extensive collection of generative art NFT pieces, including various labs. As a member of DAO, you will have a voice in deciding how to use the DAO’s treasury to expand the art collection. A member must hold a minimum of 5,000 PRINT tokens, which constitutes the DAO’s governance token.
The Flamingo DAO is another well-known decentralized art organization that integrates NFT art with investment opportunities. For NFT assets to fractionalize, it is necessary to allow collective ownership. There are 215 CryptoPunks in Flamingo DAO’s portfolio, along with 22 Bored Apes NFTS, worth $1 Billion.
Real-Life Events, NFTs, and DAOs
The social elements of some DAOs are powerful because they host a range of events in real life and use digital gatherings. In addition to managing an art gallery, the DAO organizes real-life events, such as the Paris event, to foster collaborations within the NFT community. The Bright Moments art collective, an NFT art collective, focuses on real-life NFT minting as part of their work.
NFT Marketplace Governance
The Impact of NFT marketplace is another area where we see a collaboration between DAOs and NFTs. There are usually a few marketplaces that issue their governance tokens. There are many web3 projects built on the Rarible Protocol, and the RARI grants its holders voting power. The governance token of the SuperRare DAO is the RARE token. As a result, holders can submit SuperRare Improvement Proposals (SIPs) that can serve as a soft consensus among the community before the official voting process begins.
There are two ERC-20 tokens available, RARE and RARI, and both are fungible tokens. In addition, there is another NFT marketplace called Mintable, which takes a slightly different approach from the first. Instead of using ERC-20 tokens, it uses NFT tokens to vote for the DAO. A unique NFT belongs to every user who buys a vote. NFT owners will then have the opportunity to vote on future upgrades, choose which collections and artists to include on the platform, and decide on the platform’s fee structure.
The DAO concept has been around for some time and has many exciting use cases. The space of NFT is set to continue to grow in the future, and more projects will likely include decentralized autonomous organizations. However, it is just a tiny sample of how DAOs and NFTs work together to shape the future of web 3. As decentralized finance, different NFTs, and new token formats merge, we will see many more applications where DAOs and NFTs can take advantage of each other’s best features.