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What Makes a DAO a Powerful Tool in the Virtual Assets Industry?

We have the invention and evolution of technology to thank for some of humanity’s most significant advances. The invention of the telephone in 1876, the aeroplane in 1903, the computer in 1937, and the internet in 1974 all completely changed how we live our everyday lives. As technology advances, how can the likes of web3, the metaverse, blockchain and DeFi change the future of fintech? 

This week, our coverage focuses on decentralised finance (DeFi), virtual assets and blockchain. Today, we hear from Custonomy, Async Labs, ShapeShift DAO, World Mobile Group as well as Injective Labs on what makes a decentralised autonomous organisation (DAO) a powerful tool in the virtual assets industry.

“Its unique features and benefits”
Annie Hui, COO and Co-Founder of Custonomy
Annie Hui, COO and Co-Founder of Custonomy

Annie Hui, COO and co-founder of Custonomy, a crypto-asset key management solution, explains that a DAO is a powerful tool in the virtual assets industry because it is decentralised, community-driven, efficient, open, and innovative.

“By leveraging the unique features of a DAO, virtual asset projects can create more transparent, secure, and inclusive financial systems that better meet the needs of users,” says Hui. “As the virtual assets industry continues to grow and evolve, the use of DAOs is likely to become even more prevalent and impactful in driving innovation and growth.”

Hui also dives further into key factors that she suggests make a DAO such a powerful tool:

Decentralisation

“Decentralisation characterises a DAO as it is not subject to control by any individual or organisation. Rather, smart contracts on a blockchain encode a set of rules and regulations that govern it. “This can help to ensure that decision-making is transparent and fair, and can prevent any one individual or organisation from having too much control over the network.”

Community-driven

“A DAO is typically driven by a community of users who share a common interest in the platform or project. This can help to ensure that decisions are made in the best interest of the community, and that the platform or project is more responsive to the needs and desires of its users.”

Efficient

“Because a DAO is based on smart contracts, it can be more efficient and cost-effective than traditional organisations. This can help to reduce overhead costs and improve overall efficiency, while also enabling more transparent and secure transactions.”

Openness

“A DAO is typically open to anyone who wants to participate, regardless of their geographic
location or financial status. This can help to democratise access to financial services and enable more
people to participate in the virtual assets industry.”

Innovation

“A DAO can be a powerful tool for driving innovation in the virtual assets industry, as it enables the community to collaborate and develop new ideas and products. This can lead to the creation of new financial products and services that are more tailored to the needs of users.”

‘Can increase efficiency’
Luka Klancir
Luka Klancir, co-founder of Async Labs

For Luka Klancir, co-founder of a Croatian digital agency Async Labs and Croatian Bitcoin website, DAO is an extremely powerful tool because it backs up the whole idea of blockchain and cryptoverse which is decentralisation as well as transparency.

“DAO allows for decentralised decision-making and governance, which increases transparency, efficiency, and security,” says Klancir. “It enables participants to collectively manage and govern digital assets and platforms, without the need for traditional intermediaries.

“This can create a more inclusive and democratic system for managing assets, and allows for greater community involvement and ownership. Additionally, the use of smart contracts in DAOs can help automate various processes and reduce the need for human intervention, further increasing efficiency and reducing costs.”

‘Opens up access to anyone’
Willy Ogorzaly
Willy Ogorzaly, head of decentralisation for ShapeShift DAO

The ability to give a community direct control over a treasury is a powerful tool in any industry, suggests Willy Ogorzaly, head of decentralisation for ShapeShift DAO, a decentralised, non-custodial cryptocurrency platform.

“In the virtual assets industry, that power is amplified by the ability to open up access to anyone with a wallet, distribute ownership/control in the form of governance tokens based on on-chain actions, and tap into the unique composability, transparency, and immutability that make blockchains powerful.

“Furthermore, DAOs offer an alternative means for communities to organise and manage virtual assets that don’t require legal entities, corporate directors or officers, or bank accounts.”

‘More resistant to censorship’
Eric Chen, CEO and co-founder of Injective Labs
Eric Chen, CEO and co-founder of Injective Labs

In today’s marketplace, DAOs provide a democratic and inclusive way for each stakeholder to participate in decision-making. Whether that’s for fund management or governance of open-sourced protocols as well, says Eric Chen, CEO of DeFi research and development company Injective Labs.

“DAOs are a powerful tool in the virtual asset industry as their autonomous, decentralised nature make them more resistant to censorship, corruption and external control.

“As DAOs are governed by a set of rules encoded in smart contracts, they can provide a more secure and transparent way to govern an organisation.”

‘Transparency and efficiency’
Mike Blake-Crawford, Marketing Director at World Mobile Group
Mike Blake-Crawford, marketing director at World Mobile Group

Mike Blake-Crawford holds the position of marketing director at World Mobile Group. World Mobile Group is a blockchain-based mobile network operator and the largest project on Cardano. According to him, DAOs are a powerful tool in the virtual assets industry. This is because they offer transparency as well as efficiency.

“Given the transactional nature of the industry, it’s essential to provide transparency to build trust. The web has historically suffered due to concerns around fraud risk and while large organisations have created solutions to protect against this, they are often complex and inflexible.

“With a DAO’s governance being encoded within smart-contracts, anyone can verify and inspect the foundations of an organisation. These smart-contracts also remove the need for operational oversight, which reduces the cost of managing an organisation and leads to benefits in the speed of operations – a win-win outcome.”

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