DeFi is currently on a one way trip to the moon right now as the entire sector lifts off at a very aggressive pace. It only took a short 3-weeks for the total USD value to be locked up in DeFi smart contracts to jump from $2 billion to $3 billion in July 2020;
Money keeps flooding into the DeFi realm attracted mainly because of the high yield returns DeFi platforms offer these days. This growth is impeccable and I doubt many have seen this coming this just a few months ago.
However, when a specific sector starts to grow at such an extraordinary rate, it is time to take a step back and think.
Where is this going? What’s coming next?
Whilst everybody is stumbling to get their ETH into some form of DeFi farming program, we have the perfect opportunity to spot something that is currently sitting behind the curtains, gearing up for a great show stopper.
The thing behind the curtain that I see is the incoming wave of Decentralized Autonomous Organizations (DAOs).
The Rise Of Governance
You see, the rapid growth of DeFi can pretty much be nailed down with one initial driving catalyst - the introduction of the $COMP token from Compound Finance. Prior to the distribution of $COMP, the governance of the platform was entirely in the hands of the Compound team.
However, the release of $COMP allows the community to vote on governance proposals - putting the control of the platform into the hands of the people.
And I can guarantee you that it will not stop there…
Maker was one of the first projects that gave control over the project to the people, then, many more followed:
Kyber Network…Synthetix Network...Aave...UMA...REN...Bancor...bZx…ZRX...Nexus Mutal...Numerai...Loopring......Balancer...
And these are just the tip of the iceberg of what's coming up after the DeFi craze.
You see, all of these mentioned DeFi projects are intended to be fully decentralized which would mean that the governance for the protocol should be entirely in the hands of the community. The release of the governance pretty much DAOs to materialize.
This is just the start of the DeFi wave and we can expect a swarm of other projects that all release their own governance tokens leading to creation of more DAOs.
However, the communities for these DeFi projects will most certainly need somewhere to manage their governance proposals in a secure and democratic manner. They need to be able to gather somewhere together to vote on the future direction of the project.
Now, here is the problem…
Not every DeFi project will have the time or resources to create their own voting dashboard and places for the people to discuss the proposals. It takes a great deal of time and funds for a platform to be able to design its own dashboard that they can be confident is secure and reliable. Of course, the big players within the sector such as Compound Finance does have its own dashboard but it is unlikely that every other DeFi project will be able to do the same.
There needs to be a common platform that all of these DeFi projects can integrate to create a seamless experience everyone involved in their DAOs.
> Aragon Network Enters the Chat
Aragon saw the wave of DAOs coming years ago. Created by Luis Cuende and Jorge Izquierdo in May 2017, a Platform for DAOs came alive.
Imagine Asana or Slack type of service, but for DAOs.
The project was lightyears ahead of its time as it foresaw the need for a platform to allow projects to easily come and conduct their governance.
In fact, the prominent venture capitalist, Tim Draper, invest $1 million into Aragon in February 2020 which allowed him to purchase up to 2.5% of the entire ANT supply. You can actually find all of the details about Draper’s investment (and his other invested projects) in my prior article here.
Aragon is a place for the DAOs to be
Here's the problem with the current governance platforms. Today, people have to sign up into each of these in a different way, vote in a different way and discuss proposals on separate forums.
If someone is following one or two DAOs it’s pretty easy to manage. However, when a person is tracking a handful of different DAOs, it can become cumbersome to track them all.
Remember the list of DeFi Communities releasing their own governance tokens above? This list will be 100x bigger in no time what-so-ever.
Over time, I am 100% sure that people will grow tired of having to get familiar with different DAO dashboards and voting processes for each individual project.
This is where Aragon can step in and streamline the entire process.
There is a long list of features that each DAO can streamline with Aragon, such as:
- Conviction Voting - allocate funds based on the conviction of all members
- Dot Voting - Create and participate in multi-option dot votes
- Fundraising - Accountability can be tracked through the platform
- Finance - Manage all organization finance
- Payroll - Pay members of the organization
In fact, the platform is extremely user friendly and intuitive to use;
It is designed in a way that requires zero prior knowledge of blockchains eliminating the need for DAOs to hire specialist developers as all of the platform features are slated to be ready “out of the box”.
All of the features of the platform are easily accessible in the sidebar of the dashboard;
As the platform is modular, each individual organization can choose which modules they would like to plug-in to their dashboard depending on the needs of the DAO.
In addition to this, Aragon also has its own juror system to handle disputes within the DAO. Known as “Aragon Court” this feature is the first digital court and acts as a dispute resolution protocol.
It works through the drafting of human jurors to review disputes democratically. The system is set up to incentivize jurors to act honestly as penalties are placed if they do not adjudicate well.
This adds an entirely new dimension to a platform that will be able to streamline every single process needed for a DAO.
Aragon Arises From Ashes
Looking at Aragon from the start of 2020, we clearly see that ANT was flat-chested as it traded sideways beneath the $1.50 level.
However, all of a sudden, we can see that today it spiked by 40% which allowed it to break above $1.50 and create a fresh 2020 high at around $1.90.
Why is this happening? What caused this spike?
Well, Aragon actually took a page out of Ampleforth’s diary and introduced its own liquidity incentive program;
This liquidity rewards program is designed to deepen the liquidity pool for ANT. The liquidity program started on July 22 and will last for a period of 30-days. Over the course of the program, 50,000 ANT will be distributed as rewards for liquidity providers for the ANT/ETH pool on Uniswap V2.
To stake, first, you will need to add liquidity to the ANT/ETH pool over at Uniswap V2. After depositing liquidity you will receive UNI-v2 (UNI) tokens which are then deposited into the Aragon liquidity dashboard at liquidity.aragon.org.
This is the day when Aragon will be back on people’s radars as it catches the DeFi wave and it'll remind people that a place for DAOs is will be massively in demand in the near future.
As of today, there is no better bet in town for a platform that can gather DAOs and give them tools to develop their projects.