One of the most promising use cases that blockchain technology has brought forth is the concept of DAOs (decentralized autonomous organizations).
The idea of a DAO came into existence not long after Bitcoin (BTC) was released in 2009. By design, a DAO is an entity with no central leadership. Unlike traditional companies, where most of the decisions are made behind closed doors by only a few individuals, a DAO shifts the entire process of decision-making and treasury management over to blockchain technology and the user community. Open-source smart contract codes power a DAO from a technical perspective, making any organization’s management structure autonomous, transparent, open, and fair.
With the Web3 movement gaining significant momentum, DAOs are positioned as an internet and blockchain-native solution that deliver noteworthy advantages over traditional business structures. Currently, there are different types of DAOs in the blockchain ecosystem, including operating systems like Colony and Orca, protocol DAOs like Uniswap and Maker, investment DAOs like BitDAO, grants DAOs like MolochDAO, collector DAOs like Flamingo, service DAOs like MetaverseDAO, social DAOs like Seed Club, and media DAOs like Mirror.
Even prominent centralized exchanges are getting behind DAOs. Take, for instance, Bybit, one of the largest global exchanges, which recently made a $134 million contribution in $ETH, $USDT, and $USDC to the BitDAO Official Treasury, one of the world’s largest token-governed community-run treasuries empowering the next wave of Web3 projects. This amount was equivalent to 2.5 basis points of the exchange’s futures trading volume between November 1st and December 31st, 2021.
The Rise of the DAO of DAOs
Along those lines, renowned software programmer and co-founder of Bitshares (the first-ever DEX), Steem (the first-ever decentralized social media platform), and EOS Network, Dan Larimer, has launched his new initiative, Fractally, to bring into life the original vision of the EOS Network. Fractally will effectively blend a DEX (decentralized exchange), decentralized social media platform, a smart contracts network, and a fully decentralized governance process.
Larimer first invented the concept of a DAC (Decentralized Autonomous Company) back in 2013; it is now popularly referred to as a Decentralized Autonomous Organization (DAO). Based on his previous experiences, Larimer notes that Fractally will offer an EOS-based application that endeavors to become the DAO of DAOs.
The newest initiative of the EOS Network, Fractally, will be built upon the updated model of Steem’s existing social reward model to enable incentivized blogging on EOS while working to eradicate potential avenues for abuse. This promising project will also integrate the principles of decentralized governance mentioned in Larimer’s book, “More Equal Animals – the Subtle Art of True Democracy.”
Fractally addresses many of the downsides of Steem’s token-weighted voting system by introducing a powerful and intuitive governance mechanism while also incorporating more recent advancements in automated market makers (AMMs).
Earlier in 2021, Larimer and his team successfully tested the process of fractal governance on the EdenOS ecosystem by conducting three individual elections involving hundreds of participants. EOS-based blogging application Violet.garden has already leveraged this model to implement its universal basic income (UBI) solution on the EOS Network.
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