Next Big Trend in Crypto? DAO Powered By NFTs
One of the compelling ways in which crypto communities have chosen to structure themselves is through the concept and creation of a Decentralized Autonomous Organization, or DAO. When something is decentralized, it means that it is not controlled by a central institution or sole entity.
It was in 2016 that a group of developers found their initial inspiration for a DAO from cryptocurrencies, which are generally decentralized. Rather than being controlled from one location, a DAO is divided over an array of computers, nodes and networks spread out around the world. Therefore, decentralization aids in the security and privatisation of any data being held on blockchain technology. In one sense, a DAO operates as a type of computer-automated venture capital fund, only without the presence of more traditional management structures such as having a board of directors. These directors need to have mutual trust to work together, which is not always possible.
In essence, the removal of flawed human behaviour in governance makes a DAO the ultimate goal of decentralization. The funds which investors would have raised for a project are automatically managed and allocated through smart contracts on the blockchain, effectively reducing human error or monetary manipulation. Then, the DAO gives the investors cryptographic tokens in exchange for their investment, which gives them relative voting rights in decisions relating to the way the DAO will be run throughout various projects.
Established DAO Projects
Phantasma is an example of a blockchain offering a variety of decentralized services, including buying and staking tokens, blockchain enabled gaming, NFT minting and sales, as well as facilitating the building of dApps. Phantasma also has a DAO running through it, based around its governance token, $SOUL. The fuel token of Phantasma’s ecosystem is called $KCAL, which is used for any action performed on chain, such as transactions and cross chain swaps. $KCAL can be earned simply by staking $SOUL. Besides generating the fuel token, staking $SOUL brings DAO-centric benefits such as giving its holders voting power relative to their amount of $SOUL that has been staked, also taking into consideration the duration of their staking. By factoring in duration, the DAO prevents those with the most money from immediately seizing massive amounts of influence over Phantasma. Rather, those who have shown loyalty to the DAO by being staked token holders for longer amounts of time carry more weight than affluent newcomers.
Pillar is a DeFi multi-chain smart wallet that is run by its community via a DAO. As a potential one-stop solution for dApps, NFTs, tokens and more, Pillar is compatible with Ethereum, Binance Smart Chain and Polygon as well as others. Pillar’s native token, $PLR, gives its holders decision making rights over Pillar’s roadmap, treasury and future funding.
Introducing Loot NFT
Loot NFT is a new project that has been working on creating a decentralized experience that goes further than just a metaverse or alternate reality. Rather, Loot NFT aims to create an entire gamified arcade in which the user is the protagonist of a parallel fantasy world that will eventually become a self-running, self sufficient DAO. Containing 4,880 plots of virtual land, owners of these plots will tell the story of their land through immersive NFTs, showing different vantage points, styles and time periods. 4 NFTs will be minted in each plot, therefore the end result will be a total of 19,520 NFTs in the form of pages in a multimedia book of NFT visuals, each contributing toward the grand story of Lootverse.
More so, the parallel world offers very real avenues of generating revenue. Soon land owners will be able to build unique properties on their land, rent them out and run businesses. For example, Lootnance, will be the first business in the universe coming soon. Founded by Aya Curators, Lootnance will be the first LTT/Credits Exchange, which will allow Lootizens to purchase LTT and not be limited to just mining them.
By joining Loot NFT as a member of The Parliament, users will be able to decide on matters that affect Loot NFT ecosystem and DAO. Each type of Parliament member carries an individual voting weight. Users can join the Cabinet, Upper House, Lower House, as a Councillor or a Law Lord. Matters to vote upon can pertain to varying mining ratios, joining fees, and more. In order for a motion to pass, it must have at least 25% of all sitting parliamentary voting and 51% of all voting weights.
Loot NFT is also planning to introduce The Government in the near future, which will act as the official gateway into Lootverse. Lootizens will be able to buy Credits with USDC at The Government, and apply for Lootversian passports that grant citizenship in the Metaverse. The Parliament, mentioned above, will soon move to The Government too.
Loot NFT is building an entire ecosystem from scratch where each component showcases a unique creation. Loot NFT’s founders and developers intend to gradually release their control of this project to the DAO, where members, a foundation and the blockchain will control the future of Loot NFT. However, even once maximum decentralization has been achieved, Loot NFT’s founders will remain as plot owners in Lootverse, enabling them to receive royalties from activities within the ecosystem. For example, this will be partially due to Lootverse’s real-estate and business fund, which allows plot owners to manage and lease their land as well as administer rights, earnings and rewards. Lootizens will soon be able to upgrade their plots of lands by tagging buildings (residential or corporate) as NFTs to their plots. A handpicked number of architects will create a limited number of buildings, each with a unique design and layout, that will be available for purchase.
An Innovative Staggered Approach Towards Decentralization
By operating without a hierarchy, DAOs can have an assortment of objectives beyond simply raising and fairly distributing investor’s funds. Rather than being run as a project merely seeking to raise capital, Loot NFT is a self-funded experimental business with an innovative exit strategy. The currently centralized Loot NFT was built in a highly modular fashion from the onset, in order for its architecture to be adequately dismantled to the point where Loot NFT will be predominantly governed by a series of smart contracts.
Before the arrival of DAOs, governance over business capital was harder to manage. However, the world of blockchain has seen many DeFi projects deployed through a DAO as an effective strategy to attain decentralization, and it will most likely continue to do so going forward.