The Current Function Of DAOs

By Aventurine | Crypto Aventurine | 2 Apr 2023

Web3 DAO In Its Current State Is Dysfunctional For The Good Of Projects!

I have been in crypto since 2020 and seen the development of DAO on various blockchains.

I have noticed major flaws.

Please note: this is my personal opinion and you might not agree to what I am going to say here!

1. Gas Fees

Most DAOs are structured in a way that charge gas fees to make proposals and vote.

This is flawed way to do things for a very simple reason - charging fees to have your say limits the actual input of information as not everybody is willing to pay just to propose something or vote on something!

Instead, the token or NFT should serve only as a gateway to participate in DAO.

2. Voting Power Based On Amount Held.

Another major flaw is voting based on amount held - this makes DAO so centralized on parties who hold the most tokens or NFTs. That does not mean they have the best interest in the project itself, they might choose to sabotage for one or another reason, or decide to vote in favor of their own interest!

Proper DAO would treat voting as a guideline for further discussion and consideration to decide if voted proposal is actually good for the projects future!

3. Not Implementing DAO

Loads of projects advertise their DAO, but in fact what they advertise has nothing to do with actual DAO. eg. Saying that you can test features and provide feedback, but you can’t really make impactful decisions is not DAO! Companies pay to test features and give valuable feedback, but what some projects in web3 do, is asking you to buy their token or NFT so you can join DAO to be a tester and provide feedback - absolutely ridiculous!

Conclusion

I think a properly structured DAO has many layers that deal with complex decision making during the development process. Healthy DAO should also reward all of its participants.

Voting power based on how much somebody holds? This should not have place in a successfully functioning DAO!

Thanks for reading!

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