{"id":440685,"date":"2022-05-02T16:01:00","date_gmt":"2022-05-02T13:01:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/daos-a-blockchain-based-replacement-for-traditional-crowdfunding\/"},"modified":"2022-05-02T16:01:00","modified_gmt":"2022-05-02T13:01:00","slug":"daos-a-blockchain-based-replacement-for-traditional-crowdfunding","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/daos-a-blockchain-based-replacement-for-traditional-crowdfunding\/","title":{"rendered":"# DAOs: A blockchain-based replacement for traditional crowdfunding"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2a39d328657\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2a39d328657\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/daos-a-blockchain-based-replacement-for-traditional-crowdfunding\/#%E2%80%9D_DAOs_A_blockchain-based_replacement_for_traditional_crowdfunding_%E2%80%9C\" >&#8221; DAOs: A blockchain-based replacement for traditional crowdfunding  &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/daos-a-blockchain-based-replacement-for-traditional-crowdfunding\/#DAOs_are_next_on_the_ladder_of_modern_crowdfunding\" >DAOs are next on the ladder of modern crowdfunding<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/daos-a-blockchain-based-replacement-for-traditional-crowdfunding\/#Blockchain_technology_allows_for_more_reach\" >Blockchain technology allows for more reach<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/daos-a-blockchain-based-replacement-for-traditional-crowdfunding\/#High_flexibility_and_low_regulation\" >High flexibility and low regulation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/daos-a-blockchain-based-replacement-for-traditional-crowdfunding\/#Its_feeless_mostly_and_leaderless\" >It\u2019s feeless (mostly) and leaderless<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/daos-a-blockchain-based-replacement-for-traditional-crowdfunding\/#More_work_to_be_done\" >More work to be done<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_DAOs_A_blockchain-based_replacement_for_traditional_crowdfunding_%E2%80%9C\"><\/span>&#8221; DAOs: A blockchain-based replacement for traditional crowdfunding  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>The crypto space witnessed phenomenal growth in 2021. Buzzwords like nonfungible tokens (NFTs), decentralized finance (DeFi) and the Metaverse broke through to the mainstream and culminated in the crypto market peaking at over $3 trillion in November of 2021.\u00a0<\/p>\n<p>NFTs redefined arts and how they are acquired. DeFi revolutionized how we lend and borrow. The Metaverse birthed an alternate universe that we could all live and work in virtually. Play-to-earn (P2E) <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>s paid gamers to do what they love.\u00a0<\/p>\n<p>Decentralized autonomous organizations, or DAOs, also had their moment to shine.\u00a0<\/p>\n<p>One of the most out-of-the-blue crypto headlines of 2021 is probably ConstitutionDAO. A hurriedly assembled group of United States constitution-loving crypto believers. The group raised more than $47 million in Ether (ETH) to purchase an original copy of the United States constitution at auction. The group ultimately fell short in its bid but the audacity of that endeavor brought DAOs power to crowdfund to mainstream attention.<\/p>\n<p>The ingenuity of that move and what it nearly accomplished provides a template for how traditional crowdfunding could be better managed. ConstitutionDAO got tens of thousands of addresses to donate $47 million without a marketing team or a dedicated growth director.<\/p>\n<p>Beat that GoFundMe.<\/p>\n<p>DAOs currently have over $10.5 billion locked in different treasuries with over 1.7 million token holders, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/deepdao.io\/organizations\">according<\/a> to data from DeepDAO. But, what exactly are they?<\/p>\n<p>DAOs are a system of hard-coded rules that define which actions a decentralized organization will take. They are leaderless member-owned communities. A DAO is essentially a co-op that governs itself using votes tallied through blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>. Smart contracts run the entire group. A native token is usually developed for a DAO and used by members to vote on proposals.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"DAOs_are_next_on_the_ladder_of_modern_crowdfunding\"><\/span>DAOs are next on the ladder of modern crowdfunding<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Digital crowdfunding platforms like GoFundMe, Patreon and Kickstarter have enjoyed massive patronage over the past 10 years. This growth can be attributed primarily to the nature of crowdfunding which is set up with minimal risk. This risk is spread across all contributors of a particular idea or startup.\u00a0<\/p>\n<p>Start-ups with financial needs will find that getting funding from traditional institutions is no easy feat. These institutions take on quite a lot of the risk involved in financing business ideas that could end badly. With a global economy still reeling from the pandemic, the accessibility and much less bureaucratic nature of DAOs as a tool for crowdfunding have been a primal factor in its growth.<\/p>\n<p>Digitalized crowdfunding in the form of DAOs has eliminated some traditional limits of the financing form. The simplicity makes it a disruptive force to traditional crowdfunding methods.<\/p>\n<p>Emmet Halm dropped out of Harvard to found DAOHQ. DAOHQ bills itself as the first marketplace for DAOs where users can find information about any DAO. The startup recently <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.forbes.com\/sites\/frederickdaso\/2022\/04\/25\/daqhq-raises-12m-to-build-the-new-york-stock-exchange-for-web3\/?sh=6d4861ec64b5\">secured<\/a> over $1 million in funding to develop the project. <\/p>\n<p>Halm told Cointelegraph that the centralization of traditional crowdfunding sites like Gofundme will make DAOs a better alternative for investors. \u201cI don\u2019t think DAOs are going to replace crowdfunding sites, I think they have replaced them already,\u201d he said, adding, \u201cIf you look at the kind of political pressure that sites like GoFundMe get for certain types of fundraisers, it makes them less attractive for raising funds.\u201d <\/p>\n<p><strong><em>Recent:\u00a0Blockchain and crypto can be a boon for tracking financial crimes<\/em><\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Blockchain_technology_allows_for_more_reach\"><\/span>Blockchain technology allows for more reach<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>One perk of blockchain technology is that it is censorship-proof. This makes all <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lications built on blockchains censorship-proof as well. This removes restrictions that traditional crowdfunding sites might otherwise impose on individuals or businesses. In the United States, businesses are <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/education\/smallbusiness\/exemptofferings\/regcrowdfunding\">not allowed<\/a> to raise more than $5 million in a year from crowdfunding websites. <\/p>\n<p>GoFundMe does not process payments from China, Nigeria, Russia, Lebanon, Iran and a host of other countries. Nigeria is Africa\u2019s largest economy while China is the world\u2019s second-largest economy, yet residents of both economies can\u2019t access the largest crowdfunding platform in the world. With blockchain technology, investors or donors from these countries can easily contribute to a DAO.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"High_flexibility_and_low_regulation\"><\/span>High flexibility and low regulation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The main goal of crowdfunding, being to raise capital to support a cause, can be hampered by stringent regulations. These regulations seek to ensure that all persons involved in a project are indemnified of the risk involved in funding a start-up. These measures are mainly counterproductive to startups due to the unstable nature of economies worldwide. New business policies and economic sanctions arise every minute that might weigh down heavily on startups.\u00a0<\/p>\n<p>DAOs are highly flexible and so far have minimal regulations from authorities. Every member that joins the DAO shares the risk among themselves (depending on their financial contributions) should the purpose of the DAO fail to materialize. The members of the aforementioned ConstitutionDAO who requested refunds <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.theverge.com\/2021\/11\/24\/22800995\/constitutiondao-refund-progress-steep-gas-fees-cryptocurrency\">received<\/a> their money back, although gas fees were lost.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-05\/4d68143b-6302-4ef3-a11e-ee9055a21e63.jpeg\"><figcaption style=\"text-align: center;\"><em>The first page of the United States constitution.<\/em><\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"Its_feeless_mostly_and_leaderless\"><\/span>It\u2019s feeless (mostly) and leaderless<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Most crowdfunding platforms are profit-seeking companies in their own right. You do not raise funds on their platform for free. Using conventional crowdfunding platforms exposes you to fees that vary by platform and can be a fraction of whatever amount you submit for a project. With a modern ecosystem and cryptocurrency protocols, you can send money across borders without paying neck-breaking transaction fees.\u00a0<\/p>\n<p>DAOs also encourage public participation in a project as it leaves all decision-making processes to be made by all participants. This allows participants to have a sense of noteworthiness and let them be in charge of making their own decision based on popular support, or voting with the DAO\u2019s token in this.<\/p>\n<p>Furthermore, different crowdfunding platforms have restrictions on the type of marketing you can run to finance your cause. In February 2022, GoFundMe <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/world\/2022\/02\/07\/canada-protesters-fundraising-platform\/\">froze<\/a> nearly $8 million in an account dedicated to Canadian truckers\u2019 protests against COVID-19 vaccine mandates. With DAOs, such a restriction is virtually impossible. No third party sets the rule except the members of the DAO itself.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"More_work_to_be_done\"><\/span>More work to be done<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Crowdfunding is a tool for societal development, and DAOs are raising the bar, gaining legitimacy by the day and exploring different possibilities and breaking boundaries. As crypto adoption continues to grow, investors will look to explore hitherto unexplored niches in the industry. DAOs are an innovation whose time has come.<\/p>\n<p>The decentralized nature of crowdfunding has made DAOs more popular over the years. As of April 2022, there were over 6,000 DAOs with a valuation of $10 billion in liquidity.<\/p>\n<p>However, DAOs are far from perfect. Decisions can often take several rounds of discussions before they are concluded. The anonymity of members of a DAO platform also presents security risks of its own.<\/p>\n<p>Last year, investors poured nearly $57 million worth of Ether into the dog-themed OlympusDAO fork, AnubisDAO, only for their funds to be rug-pulled.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-05\/55cfc765-3852-4cba-95cb-710785cfd92c.jpeg\"><figcaption style=\"text-align: center;\"><em>AnubisDAO was named after the jackal-headed god of the Ancient Egyptian pantheon.<\/em><\/figcaption><\/figure>\n<p><em><strong>Related:\u00a0Investors rug-pulled after pouring $57M into dog-themed OlympusDAO fork<\/strong><\/em><\/p>\n<p>The aforementioned concerns have led some to ask: Are all DAOs going to make it?<\/p>\n<p>With thousands of DAOs already in existence and more launching every day, many wonder when\/if the DAO bubble will burst. For Emmet, the so-called \u201c80-20\u201d rule will come into play:<\/p>\n<blockquote><p>\u201cI think DAOs are here to stay, but we may have an 80-20 situation where 20% of the DAOs get 80% of the result, leaving the remaining 80% to fizzle out and maybe die.\u201d<\/p><\/blockquote>\n<p><template data-name=\"subscription_form\" data-type=\"defi_newsletter\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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Buzzwords like nonfungible tokens (NFTs), decentralized finance (DeFi) and the Metaverse broke through to the mainstream and culminated in the crypto market peaking at over $3 trillion in November of 2021.\u00a0 NFTs redefined arts and how they are&#8230;<\/p>\n","protected":false},"author":1,"featured_media":440686,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDQvMzdiZjI5YzUtNjk2Ni00ZGEyLWJhMDUtZjk5NDYwYmU4ODRjLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,87262,74868,75719,74355,117],"class_list":["post-440685","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-crowdfunding","tag-defi","tag-funding","tag-adoption","tag-business"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/440685","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=440685"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/440685\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/440686"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=440685"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=440685"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=440685"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}