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VI KNIFE in crypto is currently a concept that attracts a lot of attention and has become one of the current trends. This article will help you learn more KNIFE What is it, how does it work, what is the potential for development, as well as suggestions for system coins? KNIFE most prominent today.
The constant development of new trends in the space blockchain, especially Defi has brought many promising investment opportunities. However, the coins Defi sometimes encounter problems with governance, which is still quite centralized, depending on the creators of the project. Therefore, the DAO was born to make everything that is already "decentralized" "more decentralized". So what exactly is DAO, and what are the most potential DAO coins? Let's find out more details in the content of the article below
What is DAO in crypto?
Knife in crypto stands for “Decentralized Autonomous Organization“, which means decentralized autonomous organization. Unlike traditional organizations such as Facebook, Google, etc., it still needs to be managed through an agency or organization. With Dao, they have a set of coded rules that can operate independently without human intervention.
For ease of use, an autonomous, driverless vehicle is like a DAO.
Being programmed, the car knows exactly what to do, given the variables it needs to deal with. It finds passengers, transports them, and accepts payments for its transportation services.
The topic of DAO is very broad and it can be applied in many fields, from blockchain, DeFi protocols apply an on-chain governance model... However, they have a common feature that members in the DAO can easily access and verify the organization's proposals and actions and can participate in decision of the DAO.
How does DAO work?
The Knives use smart contracts to establish rules fundamental to their operation, these rules cannot be changed without the votes of core community members.
So how do members exercise their voting rights in DAO projects?
It requires members to purchase the native token of the DAO, or more simply, the cryptocurrency associated with the project. After that, all token holders have voting rights in the community according to their holdings.
Many people think that the DAO is a way to “guarantee democracy" more rigorously. Stakeholders can vote on adding new rules, changing rules, or removing a member. In addition, it also possesses the following features:
- No hierarchy: The organization that governs the DAO will have no manager or head, but all members of the DAO will be equal and make decisions together, instead of leaders or managers.
- Always be transparent: The DAO is open source, which means anyone can look at it. On the blockchain, anyone can scan through history to see how decisions were made.
- Open Access: Anyone with Internet access can hold or buy DAO tokens, thus giving them decision-making power in the DAO.
- Democracy in Change: Investors can change the rules of a DAO by voting on new proposals.
What are the advantages and disadvantages of DAO in crypto?
Advantages
- Thanks to blockchain, organizations can create an environment for peer-to-peer collaboration among members without having to rely on a centralized organization.
- At the DAO, the code is the only thing needed to create trust, so it's completely transparent and public.
- All members of the DAO are equal to each other. It allows people to collaborate globally, regardless of location, race, social status.
- Proposals that help develop the DAO are by vote, so those proposals are often made to the benefit of the majority.
Defect
- Everything being transparent is also not entirely a good thing, because competitors can know the future direction of the project.
- An entity, organization with higher voting power than other members also creates a feeling of "centralization" in the voting of the protocol.
- Once DAOs have been deployed (deployed), it is very difficult to change, operations must take place exactly as specified in smart contract.
- Since every decision requires a community vote, if there is an urgent issue that needs to be resolved soon, the DAO will reveal its shortcomings.
Top potential DAO coins
If you want to invest in coins KNIFE, then I will list for you some of the most prominent DAO coins today for your reference.
Should I invest in DAO coins?
The DAO ecosystem has witnessed spectacular growth in the past time, marked by the appearance of hundreds of new DAO projects, with a full range of different fields, enough to see how potential DAO adoption can be. .
If only in DeFi, among the top projects with TVL at the highest level, almost all of which are governed by the community (DAO). It can be affirmed that DAO has become one of the most important things if you want a Defi protocol project to develop.
At this point, most are still applying DAO 1.0. If to distinguish, it will be divided:
- Current DAO (Dao 1.0): difficult to clutter and not clearly divided from work to benefits, so it did not receive much positive feedback.
- Knife 2.0: everything is arranged and nested smoothly for each other, dividing everything clearly, transparently, quickly, overcoming most of the disadvantages of the current DAO.
In short, the current DAOs are still relatively new, in their early stages, but their development speed is very rapid. In the future, with the great benefits brought by the platform itself, along with the gradual improvement of the DAO governance model, it will be a factor driving the price of these potential DAO-system coins to increase. And this will be a great investment opportunity for you.
