A Guide to Decentralized Autonomous Organizations

7 Jan 2022 | Cryptocurrency news


The world as we know it is changing. More and more people have started to look at the crypto market and as the industry is getting more attention, we are steadily progressing further and further into completely transitioning to a functional virtual world. 

But in order to properly convey the ideals behind this virtual world we need to actually understand everything about it, including one of the most important parts about it that many newcomers tend to gloss over, aka the DAOs.

So, if you’re interested in reading more about this strange new concept then keep on reading because it will definitely help you better understand the inner machinations of the blockchain technology in the process. 



What Are Decentralized Autonomous Organizations?

Decentralized Autonomous Organizations, or DAOs for short, are entities that work in their entirety without any central leadership to reign them in and make decisions for them. 

But without any actual leadership in charge, how can one such entity exist? After all, someone’s got to be at the very top of the food chain, right? Wrong, that’s the beauty of DAOs. 

Instead of there being an overarching individual or group of people at the top, the entity is actually controlled and managed from the bottom-up, with the most important part of the community being the actual decision makers themself. 

This community is in charge of the project while also always working directly under the blockchain itself. 

The DAO system works without any hierarchical management and it can be used to cater for a plethora of different purposes depending on the goal of the community. For example, if the community is made up of freelancers, these individuals now have to put their funds together for the sake of paying for all of their expenses. 

Another example of this is the case of charitable organizations working as DAOs. These communities need to approve every single payment and make sure that they venture with the capital firms in order to make the process safer and smoother as well. 

DAOs work through smart contracts, which are deployed directly on the blockchains. The smart contracts actually work as a series of rules that everybody in the community must abide by. 

So, in a way, it is similar to owning shares in a company, as in order for a decision to be made, the majority of the stakeholders need to approve it for it to take action. Similarly, everyone can make a proposal, as long as they are a stakeholder themselves. 

It should also be mentioned that there is a huge difference between DAOs and the DAO. So far, we only really talked about DAOs, these being Decentralized Autonomous Organizations as a whole. 

The DAO however is actually one of the very first organizations of this archetype that was ever launched. The sad part about it is that it was successfully founded back in 2016 but it eventually failed as a whole because of the Ethereum network split. 

So, just for reference’s sake, we need to clarify that throughout this guide we will be talking about DAOs not the DAO. As separate entities, although they share a similar nickname, they are different from one another in many ways.. 

But alas, now that we know what DAOs are, we need to discuss why this information is important to us and most importantly, how we can take advantage of it in the near future. 



How DAOs may be of interest to you

DAOs start off simple enough, all that you need is for a developer or the team of developers to create the blueprint behind the DAOs, which is the smart contract we mentioned before. These smart contracts can be changed at any time through the voting system, but usually they remain as the blueprint behind the community for the whole duration of the program. 

The second step is determining how much funding gets put into every aspect of the project. Funding can be raised through the selling of tokens and whatnot. 

Last but not least, once everything else is done we can finally deploy the DAOs on the blockchain. From this point on, the community controls the DAOs, not the developers. 

So why is all of this important to know? Because as an internet-native organization type, the DAOs make it a lot easier to coexist in the same company because your vote matters as much as anyone else’s. You don’t need to trust in anyone, in particular you can instead put your trust directly in the smart contract. 

On top of that everyone’s wishes are listened to and put to a vote, no one gets more of a say in a discussion, which means that as long as you are a shareholder you hold the power as much as anyone else. 

Plus, everybody gets to share the risk in case something goes wrong, no one will be held accountable as everybody will have to chime in to fix the problem which helps eradicate the fear of being blamed and ostracized by the group. 



Notable DAO Crypto Projects to Look Out For 

If you like the idea of becoming a shareholder in a DAOs project then you should know that we here at Guardarian have quite a few options for you to go for. As mentioned, to be an actual part of a certain DAO community, you’d have to own the native token of the platform. Here are some of them to get you started: 

  • The DAO Maker (DAO) – The DAO Maker platform works as an incubator for cryptocurrency startups and helps them get the funding they need to launch their project. With growth technologies and financing schemes, it makes it easier and safer for investors.
  • Dash (DASH) – One of the reasons the Dash coin has become so popular is the great anonymity of the transactions of the aforementioned PrivateSend feature. While all transactions are still kept in the ledger, it is not as easy for people to analyse and try to trace the origin of funds to specific user portfolios.
  • Maker (MKR) – Maker is the governance token of the MakerDAO and Maker Protocol. The ecosystem is one of the earliest projects on the decentralized finance scene that seeks to build decentralized financial products on top of smart-contract-enabled blockchains.
  • 0x (ZRX) – The ZRX system essentially works solely based on the 0x protocol. This protocol was built in a way that it would propagate the trading of Ethereum tokens on the open market at a much lower cost by coming directly from your wallet.
  • Decred (DCR) – Decred is a project that bets on blockchain’s decentralized nature to prevent monopoly over voting status in the project itself. One of the main goals of the Decred protocol is to ensure that all DCR holders have the same amount of decision-making power and that large institutions cannot swing the votes in their favor.
  • Stratis (STRAX) – The Stratis platform is designed for financial service providers and other enterprises to test, develop and deploy blockchain-based applications in a way that avoids the overhead and security concerns of operating their own networks. 
  • Keeper (ROOK) – KeeperDAO provides the infrastructure to make DeFi more secure, profitable and egalitarian through coordinating, capturing, and redistributing on-chain profit (MEV) back to users, protocols and Keepers.

All that you need to do in order to be a part of those communities is you will need to purchase the tokens and just like that you’ll be a shareholder with a say in the matter as anyone else in the group. 




So, just to reiterate, Decentralized Autonomous Organizations are entities that work without an overarching authority controlling their funds. Instead, the power is given to the shareholders and is then used through a voting system to which anyone that owns a token has an equally viable say in. 

While not a perfect system, it has a ton of advantages over the traditional hierarchical system, which is why many developers are opting for it when starting up their crypto projects. Then again, it’s a concept that’s just gaining momentum and all the shortcomings, as with anything new, will be polished accordingly as it evolves.

As always, Guardarian offers you a wide variety of cryptocurrencies to buy and sell securely directly with fiat money. Get your coins effortlessly, without needing to register an account.